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Vietnam To Develop ICT Program Focusing on Domestic Firms

Vietnam ICT Program Development
Image credit: Ministry of Information and Communications

The Ministry of Information and Communications (MIC) is developing an ICT industry development program , which is expected to be submitted to the government for issuance within the first quarter of 2020.

The program will focus on measures to encourage Vietnamese firms to engage further in the global ICT industry’s value chain and increase added value.

Speaking at a conference to discuss the ICT development program, the Deputy Minister of MIC said that the ICT industry was seeing a slowdown in revenue.

The industry’s revenue increased by 9.8% in 2019 over the previous year. This was low compared to the average annual growth rate of 31.1% in 2014-2019.

Additionally, the Vietnam ICT industry is still largely dependent on foreign-invested companies. The Minister cited the fact that foreign-invested companies account for more than 90% of the industry’s export revenue.

Domestic ICT firms are mainly involved in only low-value stages of production, such as hardware assembly and software outsourcing. There haven’t been many unique Make-in-Vietnam products, the Minister stated.

It would be important to leverage the development of domestic ICT companies and simultaneously attract foreign direct investment (FDI) into the sector.

The program also aims to build links between domestic and FDI companies as well as with the global market.

According to the Deputy Director of MIC’s IT Department, the program targets improving the value, quality, competitiveness, and creativity of the ICT industry.

The program will prioritise the development of products and services based on technologies such as artificial intelligence, internet-of-things, automation, data analysis, and 5G.

Domestic firms would be the focus. The program intends for domestic ICT firms to grow at a rate two times higher than the country’s gross domestic product growth rate.

By 2025, Vietnam aims to have mastered technologies in producing major ICT products to serve socio-economic development and national security.

The ICT industry is expected to become a key economic sector in the next five years.

Vietnam’s ICT industry has seen significant development in the past five years and grew to reach revenue of US $110 billion this year.

The industry provided jobs for more than one million people and ICT firms contributed VN 53 trillion (US$2.28 billion) to the state budget in 2019.

Information security is an indispensable part of ICT development. The Deputy Minister recently noted that the investment rate for information security only accounts for less than 5% of total investment capital for an ICT project in Vietnam, compared to the global average rate of 15%-20%.

Like many other countries, Vietnam has no choice but to accelerate ICT development and ICT-based sectors, he added.

In spite of its investment capital, the country ranked 50th on the Global Cybersecurity Index (CGI) rankings in 2018, up 50 places from a year earlier, according to a report by the International Telecommunications Union (ITU).

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