In this webinar, Mr Nguyen Hoa Cuong reviewed the achievements and challenges in Vietnam’s digitalization drive. He also discussed the opportunities and prospects of the country’s digital transformation in the coming years.
VIETNAM STUDIES PROGRAMME WEBINAR
Wednesday, 24 August 2022 – ISEAS – Yusof Ishak Institute hosted a webinar on “Toward a Robust ‘Digital Vietnam’: Strategies, Achievements and Prospects” presented by Mr Nguyen Hoa Cuong, Vice President of the Central Institute for Economic Management (CIEM) under the Vietnamese Ministry of Planning and Investment (MPI).
Over the past decade, the Vietnamese government has been promoting digital transformation to support the country’s long-term socio-economic development. In terms of strategy, facing declining productivity and fierce competition in the global value chain, Vietnam has acknowledged the need to boost investment in science, technology and innovation to drive business-centric innovation, especially among small and medium-sized enterprises (SMEs). In 2017, the SME Support Law was passed. In 2020, the Vietnamese Prime Minister issued Decision 749 on National Digital Transformation Program and Decision 2289 on National Strategy on Industrial Revolution 4.0 (IR4.0). In May 2022, the Prime Minister also issued Decision 569 on Strategy for Science, Technology and Innovation.
To improve human resources for digital transformation, the government issued in 2017 Decision 1665 on Supporting Students & Pupils to Start Up and Decision 939 on Supporting Women Start-up. In early 2022, it also issued Decision 146 on human resource development for digital transformation. In addition, the Ministry of Planning and Investment is working on a new comprehensive human resource development strategy.
To strengthen digital infrastructure, three key documents have been adopted: Prime Minister’s Decision 941 on Development Strategy for E-government, the National Assembly’s Resolution 31 on Economy Restructuring Plan, and Prime Minister’s Decision 411 on National Strategies for Digital Economy and Digital Society. Two other documents, one on industrialization and modernization and the other on productivity, are expected to be released later this year.
Mr Cuong then outlined Vietnam’s achievements in three pillars: digital government, digital economy, and digital society. In promoting digital government, Vietnam has raised public perception through national and provincial digital transformation days, achieved a high implementation rate for digital transformation action plans, established 18 new digital government platforms, and witnessed growing usage of national public services portals.
Vietnam’s fast-growing digital economy has seen impressive figures. Around 67,000 out of 871,000 operating enterprises in Vietnam are digital tech firms. In the first five months of 2022, Vietnam recorded the highest growth in cashless payments with a year-on-year increase of 76 per cent in number and 30.6 per cent in volume. The percentage of transactions via mobile payment and QR code payment also spiked. Digital payment platforms, such as those of Vietcombank, MB Bank, BIDV and Zalo Pay, have also seen a considerable increase in users. On e-commerce platforms, four million households sold 146.610 agricultural products worth US$80 million in the first six months of 2022.
Vietnam’s digital society is also thriving. In the first half of 2022, Vietnam saw 200 million downloads of new apps—the 7th highest globally. There are more than 100 million monthly users across all mobile platforms. Vietnamese used digital platforms for online conferences, travel, transport, and e-learning, with average daily Internet usage of 6 hours and 38 minutes.
As for the prospects of Vietnam’s digital transformation, Mr Cuong noted the high potential growth in the digital economy, the rapid development of digital infrastructure, the increased popularity of national digital platforms, and the cross-cutting nature of digital transformation. He stressed that the future success of Vietnam’s digital transformation depends on the level of digital skills in the population and the country’s digital business environment.
Mr Cuong listed six major challenges to Vietnam’s digital transformation. First, the level of digital skills in Vietnam is still low, and there is a shortage of IT and digital transformation professionals. Second, the digital economy and digital society pillars are relatively underdeveloped compared to the digital government pillar. Third, public investment in digital transformation has been modest. Fourth, the government has been slow to update national databases. Fifth, Vietnam lacks efficient monitoring and evaluation mechanisms for digital transformation. Finally, while public services have increased in numbers, their efficiency and quality remain low.
At the end of his presentation, Mr Cuong briefly discussed the cyber security and data privacy challenges. He also talked about Decree 53 which was issued by the Vietnamese government in early August to guide the implementation of the 2019 Cybersecurity Law. The Decree, among other things, requires foreign firms to store Vietnamese user data locally and set up local offices. He saw this as part of the government’s plan to strengthen personal information security following incidents of user data leaks from major companies.
In the Q&A session, Mr Cuong answered 12 questions from the audience on various issues, including the practice of Vietnamese tech startups setting up their companies in Singapore rather than Vietnam; the Vietnamese government’s budget allocation for digital transformation; the progress of Vietnam’s IR4.0 strategy; the Vietnamese government’s cooperation with big tech companies to develop digital infrastructure; and how to address the shortage of high-skilled IT professionals and job displacement due to technology adoption.
