Vietnamese businesses urged to be more active in digitalization

In a rapidly-changing world where digitalization has now become an irreversible trend, a more active approach in pursuing digitalization remains essential for local businesses to stay competitive and eventually allow the Vietnamese economy to reach regional advanced countries.

Overview of the event.

Experts shared the view in a recent business forum held by the Enternews under the Vietnam Chamber of Commerce and Industry (VCCI), discussing the role of businesses in Vietnam’s ongoing economic restructuring efforts during the 2021-2025 period.

A report from the World Economic Forum (WEF) revealed the effects from the Covid-19 pandemic and Industry 4.0 would result in 80% of businesses opting for remote working and accelerating the digital transformation by 2025, as well as around 50% applying a greater level of automation in working procedures.

In this context, Vice Chairman of the VCCI Hoang Quang Phong noted there should be breakthroughs in the economic restructuring process for Vietnam to realize its long-term development goals.

Among key priorities, Phong expected the average productivity to expand by at least 6.5% per year, higher than the 5.8% rate recorded in the 2016-2020 period, and digitalization is a key tool to address the issue.

VCCI Vice Chairman Hoang Quang Phong.

“This is essential for Vietnam to become an upper-middle-income country by 2030, and eventually a high income one in 2045,” Phong added.

Expert Nguyen Binh Minh from the Vietnam E-Commerce Association (VECOM) noted that Industry 4.0 has significantly transformed the world in recent years, in turn bringing both challenges and opportunities for local businesses.

Minh also warned a widening gap in digitalization between Vietnam and advanced countries could further leave Vietnam behind in its quest for prosperity.

He pointed out the fact that the majority of Vietnamese enterprises which are small and medium-sized are still struggling to switch to a digital business model, with limited understanding and financial resources as among the main reasons.

However, a delay in digitalization would put them at the risk of losing customers. “The majority of customers are now turning to smartphones to shop online and meet their daily needs,” Minh said.

Expert Nguyen Binh Minh from the Vietnam E-Commerce Association (VECOM).

Risks for low-skilled laborers

With the human factor considered vital for businesses to embark on digital transformation, Director General of Directorate of Vocational Education and Training (DVET) Truong Anh Dung said local businesses are still lacking preparation in this regard.

While nearly 80% of businesses are aware of benefits from Industry 4.0, up to 42% have not set up appropriate preparation in terms of human training.

In addition, only 11.8% have already had plans in this regard, and 6% are putting them into motion, Dung said.

According to Dung, Vietnam is having an advantage of a  demographic dividend, in which over 55 million people are of the working-age, but the quality remains an issue with just 24.5% having the required certificates, significantly lower compared to other countries in ASEAN and East Asia.

Dung said this remains a concern as there has been a sharp rise in market demand for high-skilled laborers and fewer job opportunities for those with basic skills.

“This trend would be clearer in the future, which means there is an urgent need for workers to be trained and equipped with new knowledge to adapt to a digital economy,” Dung added.

“A high-quality workforce is the core part for Vietnam to ensure speedy economic recovery and sustainable development,” he continued.

 Along with the short-term goal of speeding up vaccination to resume economic activities, Dung called for the Government to allocate a  sizable part of the upcoming stimulus package to develop the labor market and help businesses improve human resources.