Vietnam takes a leap in digital transformation with foreign participation

Many technology-related sectors in Vietnam are expected to develop strongly in the time to come as the country’s rapid digital transformation is attracting big interest from foreign tech giants.

Ministry of Information and Communications (MIC) reported that more multinationals are seeking to co-operate with MIC in the switchover.

Vietnam’s digital economy is expected to value at US$43 billion in 2025.

Statistics from Vietnam’s Ministry of Planning and Investment also showed that some US$1.3 billion worth of FDI in Vietnam was spent on sci-tech last year, ranking fourth among the most attractive sectors.

Experts said as Vietnamese businesses’ awareness about the importance of technology has much improved, they are rushing to apply advanced technologies, thus creating new opportunities for multinationals.

Seeing the growth potential ahead, many tech giants, such as Lenovo, Ericsson, Qualcomm, and Huawei, are targeting the Vietnamese market.

Ken Wong, senior vice president of Lenovo Group, said that Lenovo Group considers Vietnam among the most interesting markets to promote its new products as an emerging market, along with many others in Asia Pacific, have both an appetite for innovation and the growing industrial base that make Lenovo’s strategy possible.

Other technology giants are also following this trend. Americans Qualcomm, one of the world’s biggest chip designers and suppliers, has recently also announced the launch of the Qualcomm Vietnam Innovation Challenge in 2020 to support the development of Vietnam’s rising technology ecosystem. It targets innovative SMEs by supporting and encouraging them to design new products related to 5G, IoT, machine learning, smart cities, and multimedia utilizing Qualcomm’s mobile platforms and technologies.

According to Nam Thieu, country manager of Qualcomm Vietnam, Laos and Cambodia, by virtue of Vietnam’s policies to actively join Industry 4.0, Qualcomm has been expanding its presence in the country, with a plan to build new international-standard laboratories in Vietnam in 2020.

Similarly, Huawei, the world’s leading provider of ICT infrastructure and smart devices, is seeking co-operation with Vietnamese Commission for the Management of State Capital at Enterprises (CMSC) on digital transformation and the digital economy. The CMSC is now the representative of the state holding 19 state-owned corporations, such as PetroVietnam, Vietnam Electricity, Vinacomin, VNPT and MobiFone, which are powerful locomotives in vital economic sectors.

Ambitious plans

According to the e-Conomy Southeast Asia report 2019 released by Google, Temasek and US-based global management consultancy Bain, Vietnam is evolving into one of the most digital of all economies in the ASEAN. As the second fastest-growing digital economy in the region after Indonesia, its value is expected to almost quadruple from US$12 billion currently to US$43 billion in 2025.

Vietnam is also the third most-funded economy in the ASEAN after Indonesia and Singapore, raising almost US$1 billion in digital economy funding since 2015.

These developments have given Vietnam confidence to set highly ambitious targets for itself. The national strategy for Industry 4.0 expects the internet economy to contribute 20 per cent to GDP by 2025, while creating jobs and attracting high-quality foreign direct investment.

The National Digital Transformation Plan also envisions Vietnam among the top-four digitalized ASEAN economies and among the world’s top 40 in the National Competitiveness Index – both by 2025. These ambitions are important for driving government, business, and consumer transformation.

However, to meet the ambitious targets, Jeff Paine, managing director of Asia Internet Coalition, suggested that a stable and predictable regulatory and policy landscape, in line with international best practices, is needed to enable digital platforms, products, and services to actively contribute to and support the digital economy goals of Vietnam.