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Digital economy boosts Vietnam’s economic growth

In a press statement, the Ministry of Information and Communications quoted a recent study that said Vietnam’s digital economy reached US $3 billion in 2015, US $9 billion in 2019, and will reach US $30 billion in 2025.

According to another study, Vietnam’s GDP may add an additional US $162 billion in 20 years if the country’s digital transformation is successful.

Vietnam’s digital economy has grown since 2010 when smartphone coverage surpassed half of the population. It was boosted by the Industrial Revolution 4.0 in the last decade when Vietnam’s infrastructure and business environment developed rapidly.

The Director of the IT Department of the Ministry of Information and Communications said that IT companies have grown rapidly. In the digital economy, creativity, competition, and sharing are implemented on the basis of digital technology, models, and skills.

E-commerce, the most crucial factor of Vietnam’s digital economy, has grown exponentially in terms of revenues and market scale totalling around US $5.2 billion. In 2017, more than US $83 million worth of foreign investment was poured into 21 Vietnamese e-commerce start-ups.

Mergers and Acquisitions (M&A) between e-commerce enterprises in Vietnam increased in value and number of transactions. The innovation start-up ecology also has grown. More than 3,000 innovative start-ups and 40 venture capital funds and angel investors were set up over the last 2 years.

According to the Ministry of Science and Technology, 78 financial technology (fintech) companies have been established in Vietnam. Vietnamese and foreign transport companies have launched several competitive apps like Grab, Uber, FastGo, Be, and VATO. Vietnamese travel start-ups have launched their applications like Mytour and Luxstay to compete with Booking, Agoda, and AirB&B.

Vietnam has essentially completed the connection of the data management of ministries, sectors, and localities with the government office, moving up 10 places in the UN’s e-government rankings.

Minister and Head of the Government said that in the 4th quarter of this year, the government will complete the public service portal connecting public services from the central to local levels. Some public services will be piloted during the initial period to gain experience. It will assign ID codes to enable connection and sharing between organisations and individuals.

The growth of Vietnam’s digital economy has been attributed to Vietnam’s sound IT infrastructure, wide user coverage, and Vietnamese people’s passion for technology. A young and well-trained Vietnamese population of hard-working and quickly adaptable people is the primary factor in the rapid growth of the digital economy.

Vietnam aims to be an industrial country by 2045, expecting over half of the population to be in the middle-class income group by then. This goal may only be achieved through the digitalisation of many of its sectors. It will require ongoing cooperation between the public and private sectors of the country.

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