Great potential to help Vietnam realise its digital economy dream

Vietnam’s immense potential in information technology, cloud computing and big smartphone coverage are serving as key propellants for the country to materialise its dream to successfully develop its digital economy. Thu Ha reports.

Vietnam has immense potential to develop its digital economy
Vietnam has immense potential to develop its digital economy

Quint Simon, head of Public Policy in Southeast Asia of Amazon Web Services (AWS), last week flew to Vietnam from the US to discuss the potential for Vietnam to develop its own digital economy in the context of Industry 4.0.

At a workshop themed “Unlocking the full potential of Vietnam’s digital economy” in Hanoi, she surprised hundreds of participants by citing an AWS study which stated that Vietnam is one of the countries in the world that has the highest rise in expenditure for cloud computing, at 64% per year.

AWS is a subsidiary of that provides on-demand cloud computing platforms to individuals, companies and governments.

“I believe that Vietnam will soon become a nation with a digital economy. Cloud computing is a favourite in Vietnam where many enterprises are using cloud for their performance,” Simon said, explaining that using cloud means firms can completely protect their information without being stolen.

“For example, Amanotes, a fast-growing app publisher, currently has hundreds of millions of users. It is typical of Vietnamese firms with cloud computing,” she continued. “In another case, Masan is also using cloud to manage its stores in Vietnam. It has been a big trend that many Vietnamese agencies and enterprises are seeking our support in cloud applications.”

Jake Jennings, executive director of International and Regulatory Affairs of AT&T, an American multinational conglomerate holding company headquartered at Whitacre Tower in the US’ Texas, also said that he saw Vietnam’s great potential in developing a digital economy, because the country’s bright landscape for IT and cloud computing, as well as wide smartphone coverage.

“This will help Vietnam create many new jobs in the near future,” Jennings said.

Since 2007, AT&T has been boosting its presence in Vietnam. Currently it is co-operating with many firms in the country, including VNPT and Viettel. It is now exploring opportunities to expand its partner networks in the country.

Harnessing disruption for further development

According to Vietnam’s Ministry of Information and Communications, as of late June 2018, Vietnam had about 136 million mobile phone subscribers. Some 54.2% of the country’s population are using internet. Still, in terms of digital adoption, Vietnam currently shows both strengths and shortcomings.

The World Bank’s Development Report 2016 on Digital Dividends ranks Vietnam’s Digital Adoption Index at 0.46 on a 1-point scale. While higher than the average of global lower middle-income countries, it is lower than the regional average.

Internet penetration is 54%, and 40% of Vietnam’s population are social media users. These numbers are impressive, according to the World Bank in Vietnam.

Ousmane Dione, World Bank country director for Vietnam, said that in order to forge ahead, or even leapfrog regional peers, Vietnam must upgrade the way its government functions.

“Three types of government relationships are critical: government-to-government, government-to-business, and government-to-citizens. Technologies can help in many ways if we can embrace them strategically to reverse potential disruptions to these relationships.”

Dione expressed his belief that a three-factor formula, or a tripod, is necessary for Industry 4.0 to really help Vietnam achieve its development aspirations: technologies, institutions, and people. Investing in research and development will be critical for Vietnam to join the frontiers of Industry 4.0. “Made in Vietnam” should be replaced with “Researched and developed in Vietnam”, Dione stressed.

According to the European Chamber of Commerce in Vietnam (Eurocham), Vietnam is catching the eyes of the world, with a strong inflow of foreign direct investment. Many foreign investors wish to invest in digital solutions in the country, which is now beginning to develop smart cities amid an expansion of urbanisation.

Currently Vietnam, which is among the top 20 countries in the world having the most stable political climate, is ranked one of the top 10 nations in the world using Facebook the most. In the near future, Vietnam will deploy its 5G internet service and digitise many sectors in the economy.

“ICT and digital technology have been helping Vietnam develop strongly,” said Eurocham’s co-chair Denis Brunetti, who is also president and head of Vietnam and Myanmar at Ericsson.

“For Vietnam, we estimate that 5G addressable revenues for operators can increase by up to US$1.1 billion by the year 2026, depending on where they are in the value chain. It’s no surprise that 18% of this opportunity is coming from manufacturing,” he said.

According to Vietnam’s Ministry of Foreign Affairs, Vietnam is striving for sustainable growth on the basis of improving the quality of growth and taking advantage of the opportunities of the Fourth Industrial Revolution to increase its labour productivity and competitiveness and move up the ladder in the global value chain.

“Vietnam is working to be one of the world’s top 10 biggest software and digital content outsourcing service nations, with about one million employees in the IT field by 2020,” said Deputy Foreign Minister Bui Thanh Son.