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Official Gazette

Monday, August 26, 2019

Digital economy: new driving force for VN’s development

Updated: 16:19’ - 18/01/2019
Living life in a digital age is a key component for the future growth of Vietnam.

That was the message from Prime Minister Nguyen Xuan Phuc who was speaking at the Vietnam Economic Forum (VEF) held by the Central Economic Commission on January 17 in Hanoi.

He said the digital economy would be a new driving force for Vietnam to achieve the goal of rapid and sustainable growth.

“The internet economy of Vietnam is booming,” Phuc said. “It is forecast that the internet economy of Vietnam will reach a value of $33 billion by 2025.”

With 70 percent of mobile subscribers were using 3G and 4G network and each person owning on average 1.7 smartphones per person, Phuc believes the country can benefit hugely from the digital age.

Prime Minister Nguyen Xuan Phuc at a kiosk showcasing energy technology on the sideline of the Vietnam Economic Forum on Thursday in Hanoi__Photo: Thong Nhat/VNA

Access to e-commerce sites via smartphones accounted for 72 percent and online shopping conducted via smartphones made up for 53 percent.

These impressive figures indicated that Vietnam could be confident of a successful transition from a traditional to a digital economy, Phuc said.

Phuc cited findings of Google and Temasek’s report that Vietnam’s internet economy grew at an impressive rate of 35 percent in 2015-18 period to reach a size of US$9 billion, or 4 percent of gross domestic product (GDP) - the highest among ASEAN countries. E-commerce transactions nearly doubled in 2018 compared to the previous year.

The PM said the Vietnamese Government would focus on promoting entrepreneurship and encouraging innovation.
This year, the Government would prioritize policies to encourage investment in high-quality human capital and infrastructure, especially for Industry 4.0.

More incentives would be given to investment in science and technology, research and development (R&D) capacity and infrastructure development to grasp the opportunities arising from the Industry 4.0, Phuc stressed, adding that Vietnam’s spending for R&D remained modest in comparison with the rest of the world.

Other solutions would be ensuring macro-stability to enhance the resilience against the global shock and improving business climate and national competitiveness which would continue to create competitive advantages in the face of global uncertainties, Phuc said.

“Vietnam should achieve rapid and sustainable economic growth at the same time without any trade-off between growth quality and speed,” Phuc stressed.

According to Nguyen Manh Hung, Minister of Information and Communication, increasing the use of digital technology would be a solution to promote digital economy, in which, enterprises played a significant role.

The problem was if the Government accepted new business models of the digital economy and how the Government reacts.

“Digitalizing the economy is a policy revolution rather than a technology revolution,” Hung said, adding that Government’s reaction of accepting new business models early would be critical.

In fact, the digital transformation already took place and the Industry 4.0 came up as a turning point to accelerate the speed of the process.

Hung said to promote digital economy, it was necessary for Vietnam to improve the information, communication and technology infrastructures.

The Government should raise policies to build up the market for digital economy, adding that Government should be the first using digital technologies.

Focus should also be placed on building the human resources for the Industry 4.0, Hung said.

Truong Gia Binh, Chairman of FPT Group, said it is important to pay attention to potential job losses during Industry 4.0 due to automation procedures.

Binh said that developing digital economy should create opportunities for all, especially workers and small and medium –sized enterprises.

Vietnam’s economic growth was expected to maintain momentum in 2019, projecting the growth rate for this year at 6.8 per cent, according to Eric Sidgwick, Country Director of the Asian Development Bank in Vietnam.

He said the Vietnamese Government should continue to maintain macro-economic stability while accelerating economic transformation through embracing Industry 4.0 as well as deepening the economic integration.-(VNS/VLLF)

 

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