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Vietnam ranks 55th in digital transformation

Vietnam jumped two places to 55th  out of 79 in digital transformation with 41 points in Huawei’s Global Connectivity Index (GCI 2020).

Vietnam had an average score of 41 out of 120 based on the four pillars: levels of supply of information and communications technology (ICT) products and services, demand for connectivity, connectivity experience, and potential for the future development of the digital economy.

As per a news report, the country witnessed significant growth in mobile broadband subscriptions, mobile broadband affordability, and internet participation. As of September last year, there were 88 million smartphone users in Vietnam, up 14% year-on-year; 83 million of them 4G capable.

Since 2015, the GCI has tracked the progress of 79 economies in deploying digital infrastructure and capabilities. This year’s index benchmarks 79 countries according to their performance in 40 indicators that track the impact of ICT on a nation’s economy, digital competitiveness, and future growth. Combined, these countries account for 95% of the global GDP.

The index, which identifies several inflection points in a country like ICT laws, telecom investment, cloud investment, 4G connections, ICT investment, and international internet bandwidth, grouped nations into three clusters: starters (ranked 58 to 79), adopters (21 to 57), and frontrunners (1 to 20).

The average scores of frontrunner, adopter, and starter economies have all increased since 2015. According to a press release, starters are proactively catching up with the other clusters. The average scores of all three clusters have improved since 2015, with starters showing the highest compound annual growth rate (CAGR) with 4.95%, followed by adopters (4.58%) and frontrunners (3.38%).

Starters improved in broadband performance faster than the other clusters. Over the last five years, they have increased mobile broadband adoption by over 2.5 times, with several countries achieving close to 100% coverage.

Their 4G subscriptions rose from an average of 1% in 2015 to an average of 19% in 2019. In some countries, 30% of the population has high-speed 4G mobile broadband coverage. Mobile broadband affordability, as measured by the cost of mobile broadband divided by GNI per capita, has improved by 25%.

Increased Internet access has opened up new economic opportunities, causing annual spending on e-commerce to almost double since 2014 to more than US$2,000 per person in 2019. Some starters were moving up the GCI cluster, increased their GCI scores by up to 17%, and managed to raise GDP to a level that was 22% higher than some peers. The digital transformation of economic sectors will help economies develop “higher-order” productivity to spur economic recovery and future competitiveness.

Vietnam was one of the countries that became an adopter economy last year. Economies with higher ICT maturity could drive digital transformation to respond quicker to the COVID-19 pandemic, mitigating the negative impact on GDP per capita by 50%, the report explained.

Organisations in economies with higher GCI scores are able to react faster to the COVID-19 pandemic and use digital tools and services to mitigate the impact of lockdowns and social distancing. Due to the availability of high-speed broadband, cloud services, AI, and IoT solutions, they could quickly implement distributed workforce models, migrate to e-commerce platforms, and digitally transform their operations to maintain business continuity, the report said.

A media report mentioned that ICT needs to be at the forefront of any organisation’s strategy now and after the pandemic. The dependence on high-speed broadband for remote working and education is increasing. Cloud computing and scalable infrastructure, AI, and IoT are rolled out among the Forerunner countries and the top nations in the adopter cluster.

While some governments have started to put plans in place to build enabler technologies into their economies, it is important that all national leaders realise the need to review the readiness of their country’s digital infrastructure to develop ICT strategies and plans to facilitate the digital transformation.

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