Digital transformation gives boost to development

February 17, 2021 | 09:30 am GMT+7

Vietnam's digital economic outlook has been seeded on a fertile and potential land with a high rate of Internet usage and a developing technological infrastructure.


 According to the Vietnam Internet Network Information Center, the number of domain names has reached 500,000; the ".vn" topped the national domain names registered in Southeast Asia, and was among the top 10 in Asia. - Pacific.

The Asia-Pacific IP address management organization, APNIC, said that Vietnam's IPv6 application rate is about 40%, ranking 2nd in ASEAN, 8th globally, with more than 21 million Internet users.
Vietnam’s digital economic growth rate was the second fastest in Southeast Asia (38% in 2019, behind only Indonesia); the value of e-commerce transactions increased 81% per year in the period 2015-2019, according to Google, Temasek and Bain & Company.
Vietnam has actively approached opportunities from digital economy, built and completed legal corridors, and successfully deployed many applications of technology such as e-commerce floors, online travel, ride-hailing apps or e-wallets linked to domestic banks. 
The Covid-19 pandemic has affected many economic activities that are based on traditional platforms, forcing agencies and enterprises to be bolder in research and application of digital platforms in management activities, production - business, powerful application of e-forms such as online delivery, electronic payment, online teaching...
The government and businesses have generally adapted well to new economic models and activities; application of digital economy, and building of e-government, which developed robustly in recent years.
Before the Covid-19 epidemic, about 40 ministries and provinces were connected to the national data sharing and integration platform, official sources said. This figure is now about 70. About 50% of ministries, central agencies and localities have built their own platforms for data integration and sharing, higher than the rate of 27% in 2019.
Challenges for digital transformation
The shortage of high-quality human resources, especially human resources meeting the new requirements and skills in the context of the industrial revolution 4.0, is a problem for Vietnam.
According to the World Bank, the quality of human resources in Vietnam is 3.79/10 points, ranking 11th out of 12 countries surveyed in Asia. Meanwhile, South Korea was 6.91 points; India 5.76 points; Malaysia 5.59 points.
According to the report on "human capital" of the World Economic Forum in 2017, Vietnam's ranking of skilled workers was in the low average group, at the bottom for intermediate skilled workers (128th/130), and 99th out of 130 countries for skilled workers at a high level.
The 2019 Global Competitiveness Index also showed limitations of businesses in terms of science, technology and innovation indicators. For example, technology cooperation and development between business and university ranked 67th/141; and the number of patent applications ranked 91st/141.
According to the General Statistics Office, in 2018, up to 76% of equipment, machinery and technology lines that Vietnamese businesses used were manufactured in the 1960s-1970s; 75% of the equipment were fully depreciated; and 50% of the equipment were refurbished.
The rate of modern machinery and equipment used in Vietnamese enterprises was only 10%, 38% was average and 52% obsolete and very out of date. The rate of using high technology was only 20%, while the criterion for industrialization and modernization is over 60% of new technology (It is 31% in Thailand, 51% in Malaysia and 73% in Singapore).
According to the Central Institute for Economic Management, investment in research and development (R&D) in Vietnamese enterprises is still low, only about 0.4% of GDP compared with 2.2% in Australia and Singapore, 2.1% in China and 1.3% in Malaysia.
The number of patents granted in Vietnam is the lowest compared to the number of patent applications. Self-reported innovation appears to be well below the normal level for Vietnam’s level of development, particularly in terms of product innovation.
Obviously, these shortcomings affect the development of the digital economy, although the opportunities are huge. To make a breakthrough, Vietnam has no choice but to accelerate science and technology, innovation and digital transformation.
Both the State and enterprises must proactively seize and take advantage of the opportunities of the 4th industrial revolution to develop the digital economy and digital society because this is a decisive factor to improve productivity, quality and competitiveness of the country.