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The digital technology sector in Vietnam is experiencing a significant surge, marked by a remarkable 30% increase in the number of digital technology businesses and a substantial 32% growth in industry revenue, according to data from the Ministry of Information and Communications. Notably, the ‘Make in Vietnam’ proportion of digital industrial products has risen from 21% to 29%, underscoring the sector’s contribution to the country’s technological landscape.
The remarkable growth in software production for foreign countries, soaring by 43%, showcases Vietnam’s prowess in catering to global technology demands. With over 1,400 digital technology businesses generating a total revenue of nearly 10 billion USD, the sector has emerged as a crucial player in the nation’s economic development.
Despite these achievements, the digital technology industry faces challenges that demand attention. One major hurdle is the low added value of digital technology products and services, coupled with a limited capacity for innovation and research and development of new technologies.
Businesses in this domain also need to focus more on enhancing the quality and brand of their offerings, fostering technology orientation, and establishing robust technology ecosystems. Additionally, a shortage of quality data resources and effective platforms for data sharing and exploitation further impedes the industry’s progress.
A significant portion of digital technology businesses in Vietnam is comprised of small and medium enterprises, struggling with financial limitations that hinder investments in new products, technology platforms, and digital solutions. The reliance on foreign investment places domestic businesses at a disadvantage, potentially impacting the sustainable development of Vietnam’s technology industry.
A key concern is the heavy reliance on foreign markets, especially in the production of hardware, software, and digital content primarily for export. The industry faces stiff competition with foreign enterprises, necessitating strategic initiatives to bolster domestic capabilities and reduce dependency.
Recognising the pivotal role of the digital technology sector, the Party and State have issued guidelines and policies to enhance the industry’s development. Resolution No. 23-NQ/TW outlines the national industrial development policy until 2030, with a vision to 2045.
Emphasis is placed on developing the information technology and electronics industry, with a focus on smart manufacturing and green industry. By 2030, Vietnam aims to prioritise industries such as information technology, telecommunications, and electronics to meet the requirements of Industry 4.0.
Moving forward, specific policies and regulations are essential for building, operating, and maintaining a database on the quality of ‘Make in Vietnam’ digital technology products and services. Preferential policies, including corporate income tax incentives, import tax relief, and loan incentives, should be extended to support digital technology businesses.
Policies are required to ensure the quality of ‘Make in Vietnam’ technology products, advocating for standardised criteria on national digital platforms and limitations on foreign ownership. The digital technology sector in Vietnam is urged to prioritise quality to strengthen the ‘Make in Vietnam’ brand and enhance its foundation.
This involves not only the development of cutting-edge products and applications but also a concentrated effort to enhance the skill set of the workforce. Investing in the training of high-quality human resources will not only elevate the industry’s technological capabilities but also position Vietnam as a hub for skilled professionals in the digital domain.
Furthermore, for sectoral growth, the government needs to proactively allocate budgets for digital products and services, supported by implementing policies and economic packages.
Additionally, the sector’s expansion requires a focus on strengthening international connections, fostering cooperation, and a collective effort to regulate and share the country’s data resources.
The future success of Vietnam’s digital technology sector is contingent upon a strategic focus on enhancing digital infrastructure, services, and content, establishing the nation as a formidable player in the global digital landscape.
