Digital transformation may unlock $74 billion for Vietnam’s economy by 2030
The country still faces several obstacles to fully unlocking the benefits of digital technologies.
Digital transformation can unlock VND1.7 trillion (US$74 billion) worth of annual economic value in Vietnam by 2030, equivalent to about 27% of the country’s GDP in 2020.
|An overview of the webinar. Photo: NIC|
It is the predication stated in the latest report “Unlocking Vietnam’s Digital Potential” conducted by AlphaBeta, which was launched on October 18 at a webinar held by the Vietnam National Innovation Center (NIC) under the Ministry of Investment and Planning.
Speaking at the event, Jacques Morisset, World Bank Lead Economist and Program Leader for Vietnam, pointed out the facts that about 60% of businesses use online platforms and tools and over 2,000 administrative procedures have gone online are bright spots in the context of Covid-19 that Vietnam has overcome.
To move towards a contactless economy, Vietnam needs to focus on three priorities to exploit digital transformation including digital upgrading for workers, encouraging businesses to innovate, and enhancing the accessibility and quality of information, Morisset suggested.
Vietnam has a young, educated, and tech-savvy population and is well placed to benefit from the digital economy. It’s reported that the country has 70% of citizens below the age of 35, a high literacy rate of over 98% among those aged 15 to 35 (surpassing the global rate of 91%), and more than a third of the population using smartphones.
The country also has the second-fastest-growing Internet economy in Southeast Asia, and the gross merchandise value of its Internet economy services is expected to grow at 29% per annum between 2020 and 2025.
The report pointed eight key technologies holding transformative potential for businesses and workers in Vietnam. These include the mobile Internet, cloud computing, big data, artificial intelligence (AI), financial technology (Fintech), Internet of Things (IoT) and remote sensing, advanced robotics, and additive manufacturing.
“By allowing for new business models, revenue streams, productivity savings, and GDP increments, these technologies could create significant economic value for both businesses and the government in Vietnam,” AlphaBeta highlighted.
The report also gave three pillars of action that are required for Vietnam to fully capture its digital opportunity which is developing the local technology ecosystem and a conducive environment for digital trade, and digitally upskill workers and students.
The largest projected beneficiaries are the manufacturing, agriculture and food, and education and training sectors.
The agriculture and food sector is projected to be technology’s largest economic beneficiary in Vietnam. With about 17% of the country’s total digital opportunity estimated to be accrued, the sector could experience annual economic benefits of up to VND302 trillion ($13 billion) in 2030.
Other key sector beneficiaries include education and training ($12.1 billion), consumer, retail and hospitality ($11.3 billion), manufacturing ($7.3 billion), and health ($7 billion), according to the study.
Deputy Minister of Planning and Investment Tran Duy Dong said, in the context of the impacts of the pandemic, Vietnam needs to accelerate the development of the digital economy on the basis of science and technology and innovation to improve productivity, efficiency, and competitiveness of the economy.
“The ministry has also coordinated with international organizations and international multinationals to exchange, consult and propose mechanisms and policies to set the direction for the development. Together we are working to optimize resources for startups, innovation activities, and transformation from the traditional to the digital economy,” he said.
Sharing more related activities, Vu Quoc Huy, Director of the NIC said the center has cooperated with partners such as Google and Amazon to organize online programs, training courses to improve capacity in technology, e-commerce application, digital transformation for human resources, and Vietnamese enterprises. Some courses such as Retail University, Developing Human Resources for Businesses in Programmers, Digital Skills (AI, Machine Learning, mobile games) have proven to be effective.
Recently, Vietnamese micro, small and medium-sized enterprises (MSMEs) have received support from Google through digital skills programs like “Accelerate Vietnam Digital 4.0” and “Coding for the Future with Google”. The assistance is aimed to leverage digital technologies to improve productivity and customer outreach.
Google’s products are estimated to have generated total economic benefits worth VND64.9 trillion ($2.8 billion) and VND149.5 trillion ($6.4 billion) to businesses and Internet users in Vietnam, respectively.
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