August 10, 2020

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Vietnam taking steps to boost digital economy

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The Ministry of Information and Communications in a press release said that Vietnam has taken steps to seize opportunities from digital conversion, which has become a major development trend around the world.

Owing to technological innovation, digital conversion is forecast to change most forms of traditional production and trade and could reshape the world’s economy.

Vietnam’s digital economy is growing rapidly, bringing important contributions to the country’s economy. According to a study, Vietnam’s digital economy was valued at about US $3 billion in 2015, rising to US $9 billion in 2018, and is expected to reach US $30 billion by 2025.

Over the past few years, Vietnam has seen an increase in online shopping. The boom of e-commerce and the emergence of new business models on the Internet, such as a platform or a sharing economy, have changed the consumption habits of many citizens.

E-commerce is the fastest-developed field, growing at about 30% a year, with revenue in 2018 at about US $8 billion and estimated to reach at least US $10 billion by 2020.

Telecommunications enterprises in Vietnam have also grown with a turnover of about US $6.1 billion, creating more than 851,000 jobs. In the digital content business, the online advertising industry is growing rapidly, with forecast revenue of more than US $1 billion by 2020, three times higher than the figure in 2016.

According to an assessment from the Central Institute for Economic Management (CIEM), over the past 10 years, Vietnam’s digital economy has been developing constantly in both infrastructure and business market.

However, the explosion of a digital economy has also come with multiple challenges. In addition to institutional and legal issues, network security is a major risk. According to statistics from the National Cyber Security Centre, in 2018, the country witnessed over 10,000 cyberattacks.

The head of the Computer Emergency Response Team said that Vietnam is among the top three countries (after India and China) at red alert with a large number of botnets (networks of computers infected with malicious software and remotely commanded by cybercriminals) that illegally control local computers.

Another remarkable challenge lies in the integration process. Vietnam is a part of some of the most developed trade agreements in the world, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Vietnam-EU Free Trade Agreement.

Many countries have identified digital conversion as a vital path to their development. Integration creates competitive pressure from other countries; however, it is also an opportunity for Vietnam to gain access to knowledge and emerging technology.

For the sustainable growth of the economy, these issues require synchronous support solutions and efforts from both the private and public sectors.

An expert in digital conversion suggested the creation of favourable legal corridors with normative documents that are appropriate for a digital economy.

Governments and the private sector need to upgrade digital infrastructure and equip modern digital technology solutions to deploy smart connected digital apps, accelerate cashless payment methods, and improve the effectiveness of e-governance.

It is also necessary to have tax incentives for investment activities when developing digital infrastructure and information security. Experts have recommended the deployment of 5G services as it will create a good basis for connectivity.

IT human resources also play an important role. The country’s human resource training programmes should aim to accelerate the socialisation of IT education, especially updating training curricula associated with new technology trends, such as IoT and AI, and provide students with access to this field as soon as possible.

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