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Vietnam Aims for 10 Digital Technology Firms with Revenue over US$1 Billion

Vietnam, which is pursuing a policy on the development of digital technologies, has set the goal of having ten technology firms with annual revenue of over $1 billion by 2025. Last year was an eventful one for the information and communication technologies (ICT) industry as Vietnam began building a legal framework to promote digital technology. The total revenue of Vietnam’s ICT segment was estimated at an all-time high of VND3,462 trillion (US$151 billion), growing 9% year on year. The ICT segment alone contributes over US$136 billion to the sum, increasing by some US$11.5 billion from last year, according to data from the Ministry of Information and Communications (MIC).

Under a plan, MIC in 2022 will draft a Law on Digital Technology to institutionalise guidelines and policies of the Party and the State on digital technology development. Other tasks for 2022 are building and protecting the growth space and developing a digital economy based on research, creation, production, supply, and indigenously-developed technology products and services. It’s expected that by 2025, the ICT industry will shift from outsourcing and assembling to designing and manufacturing technology products locally. The Ministry aims for the sector to master or invent technologies with local content of over 45%. Vietnam plans to have 100,000 digital technology firms by 2025 and have at least 10 firms compete in global markets with revenues of over US$1 billion. It also wants to have 10 localities with revenues of over US$1 billion from ICT and 10-12 IT zones.

Though it has gained achievements, the ICT industry faces several challenges. The robust development of digital technology requires regular adjustment of the legal framework to create favourable conditions for digital technology firms to grow. Over 90% of digital firms in Vietnam are small and medium enterprises. Therefore, they have limited resources to invest in research and development for new products and services. They are also facing a shortage of highly skilled IT workers. Moreover, some localities lack the capital to support digital businesses and develop their information and communications industries.

However, the COVID-19 pandemic sped up digital transformation, helping the ICT industry grow steadily. Vietnam currently has some 64,000 digital businesses, a 10% increase from 2020. Further, the number of labourers in the industry grew 8% year on year to over 1.4 million people. With their revenues totalling US$18.8 billion, Vietnamese ICT companies account for 13.8% of the information and communications industry’s total revenue.

Vietnam is expected to be the fastest-growing e-commerce market in Southeast Asia by 2026, with e-commerce gross merchandise value (GMV) reaching US$56 billion by 2026, 4.5 times the estimated value of 2021. Vietnam is at the forefront of driving change and seizing opportunities to thrive based on digital transformation in a post-pandemic future. A study surveyed about 16,700 digital consumers and more than 20 C-level employees in six Southeast Asian countries, including 3,579 survey participants from Vietnam. The report described Southeast Asia as a leader of digital transformation in the Asia-Pacific region and Vietnam as one of the best performers. In Vietnam, seven out of ten consumers have digital access, and the country will have 53 million digital consumers by the end of 2021.

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