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Vietnam eyeing 8% annual growth with digital transformation over 25 years

The country’s development goals for the next period – the aspiration of turning Vietnam into a powerful and prosperous country by 2045 – was shared at the 13th National Party Congress. With ambitions to become a powerhouse in over the next quarter-century, Vietnam aims to have a steady and increasing GDP growth for the next 25 years. This, the nation’s leaders feel will only be possible with a robust digital transformation strategy.

One benchmark for this bold target would be for Vietnam to achieve a minimum average income per capita of $20,000 each year. There are only 37 countries that have this level of average annual income per capita or higher. With the current average income per capita at $3,000 per annum, Vietnam’s has a long way to go. And the only way forward would be to have the nation’s GDP grow by 7.5%-8% annually in the next 25 years.

Minister of Planning and Investment Nguyen Chi Dung said to overcome the current position and exploit all available opportunities, Vietnam must have ‘breakthrough thinking’ and strong determination to take daring steps. It needs to ‘outdistance others’ instead of ‘following’ or ‘going after’ others.

Minister of Information and Communications Nguyen Manh Hung was firm that to become a developed country with high income by 2045, science and technology development, creation and innovation, the 4.0 industry revolution and digital transformation is the only way Vietnam will succeed. In other words, Vietnam must become a country with developed technology.

Data and history show that countries that master technology can grow quickly. Vietnam has successfully controlled the COVID-19 pandemic, returned to the normal situation and maintained a positive GDP growth rate. Digital platforms have made a great contribution to these achievements. Within a short time, nearly 60 digital platforms were created to fight the pandemic, helping control and prevent outbreaks. Vietnam did this because mastered technology and quickly developed products.

Digital transformation offers the opportunity for the poor to escape poverty and for developing countries to become developed ones. The low ratio of physicians per 1,000 people has been a problem in Vietnam. However, with remote examination platforms, people from any region can access thousands of excellent physicians. This cannot be done without digital transformation.

Thanks to digital technology, students in remote areas can also study with good teachers and use the best curricula. Digital technology allows lessons by teachers to reach the remote villages of Vietnam. This means that the poorest people in the most remote areas can access the best services.

With digital technology, people from all over the country can sell their products via e-commerce platforms, bypassing merchants, which allows them to increase their income. Research and development (R&D) plays a very important role, followed by a market approach (service) and outsourcing. Studies show that R&D add 40% of value, service 30-35% and outsourcing just 15-20%.

Vietnam should not rely on doing outsourcing but needs to master technology, design and create products itself. And to do that, Vietnam has to digitise and it has. The nation has been proactively approaching digital transformation. In early June 2020, the Prime Minister signed Decision 749 approving the national digital transformation program by 2025 with the vision until 2030.

Under the program, Vietnam will pioneer in trying new technologies and models, comprehensively renovate government’s management, enterprises’ production and business activities, people’s way of living and working, and develop a safe and humanitarian digital environment. The national digital transformation program aims at the dual goal of both developing the digital government, digital economy and digital economy as well as forming digital technology firms capable of competing globally.

According to information technology experts, Vietnam is a developing country, but this does not automatically imply that it lags in the digital transformation process. In the eyes of the international community, Vietnam is a success story in developing its economy, eliminating hunger and reducing poverty.

After 35 years of carrying out doi moi (renovation), Vietnam, which was one of the poorest countries, has become a middle-income country with the proportion of poor households falling from 60% to below 3%. The international community predicts that Vietnam will become the 20th largest economy in the world and the 10th in Asia by 2050.

Yet, digital transformation in Vietnam has many challenges including unsynchronised digital infrastructure and low connection capability. The legal framework needs refining and better regulations to manage a digital society. More attention needs to be paid to the development of core technologies such as AI, Blockchain and machine learning is also a problem.

However, challenges are creating new opportunities, new missions and new space. From these, new capabilities and new approaches will be created which are the resources for Vietnam to rise.

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