Vietnam Aims To Become ASEAN’s Leading Digital Economy
Investvine, A Company of Inside Investor, Ltd.
Jul 15, 2019

Vietnam aims to become the leading digital economy in the Association of Southeast Asian Nations (ASEAN) by 2030 as a result of the national digital transformation strategy by Vietnam’s Authority of Information Technology Application (AITA) under the country’s Ministry of Information and Communications.

The ministry has assigned AITA to develop the strategy and submit it for approval in November. In a nutshell, the project aims to develop and transform the Vietnamese economy based on digital and smart technologies.

AITA director Nguyen Thanh Phuc said that “all people” would be able to participate in the digital economy. He noted that the main targets would include improving the competitiveness of Vietnam’s economy, with the average growth rate of the digital economy reaching 20 per cent a year, and labour productivity growth of seven to ten per cent annually by 2030.

The project also aims to take Vietnam into the global top 20 and ASEAN top three in terms of the global competitiveness index, as well as building a transparent and effective government to be in the world’s top 50 in terms of e-government. The project also plans to have everyone using mobile payment services by 2030.

“Electronic identification will be widely used by the state to promote not only transactions between people and governmental agencies, but also other transactions in the digital economy,” Phuc added.

The AITA has proposed that the digital transformation road map in Vietnam would be implemented in three phases.

Firstly, the country would digitalise industrial sectors and start the digital transformation of the economy, society and state agencies from 2020-22.

Secondly, it would focus on digital transformation to improve labour productivity, creating new growth momentum and competitiveness from 2023-25.

Thirdly, it would move towards the development of a comprehensive digital economy and society from 2026-30.

The ministry said that Vietnam also needed to develop a safe network security ecosystem. Each organisation and business should allocate at least ten per cent of total spending to IT to ensure network security. They should prioritise local products and services.

The strategy further postulates that “all Vietnamese people” would be equipped with skills to be safe in cyberspace.

Eventually, there would be some 100 network security businesses being launched in the next two years, while 50 network security products and services by Vietnamese firms would be deployed. The number of specialists in the sector would reach some 1,000 people and bring the market size of this sector to up to $2 billion by 2020.

Vietnam’s strategy outstrips Thailand’s 20-year roadmap set up in 2017 to establish a digital economy called “Thailand 4.0” which includes supporting the creation of 500,000 digital entrepreneurs and startups and increasing online accessibility to 24,700 communities in 77 provinces.

However, analysts say that the Thai government’s digital strategy remains vague and amorphous and will likely hit a wall owing to a lack of skilled personnel despite efforts to double the number of currently 20,000 digital workers in the country in the next couple of years.

In terms of digital leadership in ASEAN, Vietnam will likely have to compete more with Singapore where the government heavily invests in transforming the nation to a smart city-state and establish a digital economy through 5G technology, with a specific focus on cyber security.

Company Investvine, A Company of Inside Investor, Ltd.
Contact Imran Saddique