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Vietnam ‘Breakthrough Scenario’ Could See Digital Economy Boom

Vietnam earlier set an ambitious target for the digital economy to account for 20% of the GDP by 2025. However, the Deputy Director of the Department of Enterprise Management, Nguyen Trong Duong, believes that with a breakthrough scenario, the Vietnamese digital economy could account for 26.2% of the GDP in the next three years.

The official from the department, which is under the Ministry of Information and Communications (MIC), said that under the normal development scenario, the Vietnamese digital economy will only reach 10.5% of GDP by 2025. To achieve this goal, it is necessary to maintain the average annual growth of the digital economy at about 20%, three times higher than the expected GDP growth at 6.5-7% per year, he stated. According to a report, based on the analysis and assessment of digital economy development,  three scenarios have been proposed for the Vietnamese digital economy by 2025.

In the normal scenario, with only average efforts for digital transformation and digital economy development, the digital economy will account for about 10.5% of the GDP by 2025, of which ICT, telecommunications, and the Internet economy will account for about 7.9% of the GDP. In the quicker scenario in which digital transformation and development of the digital economy are strongly promoted, the digital economy will account for about 19.9% of the GDP, of which ICT, telecommunications, and the Internet economy will account for about 13.1%.

In the breakthrough scenario, digital transformation and digital economy development are strongly deployed, accompanied by measures to ensure a market balance between Vietnamese digital enterprises and foreign counterparts. At the same time, with policies to support Vietnamese technology start-ups, the digital economy will account for about 26.2% of the GDP by 2025, of which ICT, telecommunications, and the Internet economy will account for about 16%.

Duong explained that firstly, it is necessary to quickly develop and promulgate national strategies and programmes to support the digital economy. Secondly, the government must urgently review, amend, and supplement legal regulations to improve the legal framework, mechanisms, and policies to develop and further the digital society. Finally, it is crucial to accelerate the implementation of the national digital transformation programme, especially solutions for skills training, digital human resources development, and expanding the domestic digital market.

Earlier this month, OpenGov Asia reported that the country aims to have ten technology firms with annual revenue of over US$1 billion by 2025. It plans to have 100,000 digital technology firms by 2025 and have at least ten firms compete in global markets. It also wants to have 10 localities with revenues of over US$1 billion from ICT and 10-12 IT zones. Last year, 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 MIC data.

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