Endless resources
Completely mastering Led lighting technology has helped Rang Dong Light Bulb and Vacuum Flask Joint Stock Company maintain a growth rate of 8-10% throughout the 2014-2019 period. However, the market then entered a fierce battle with more than 6,000 enterprises operating in the same field, not to mention the entry of a series of corporations and companies outside the industry, competing fiercely.
In August 2019, Rang Dong unfortunately encountered a major incident when the finished product warehouse caught fire, causing serious damage to both the company's physical and mental health.
“In the context of difficulties piling up on difficulties, the company's leaders determined that only digital transformation could help the business overcome the storm, continue to exist and develop rapidly and sustainably,” said Nguyen Doan Ket, Deputy General Director and Head of Rang Dong’s Digital Transformation Steering Committee, recalling the historic turning point that helped the company recover strongly and achieve the success it has today.
With a clear strategy, the company quickly applied digital technology to build a 4.0 product and service ecosystem; focusing on developing smart manufacturing, using robotization, applying machine learning technology, artificial intelligence (AI), industrial internet of things (IoT) and deploying mass production according to individualised needs.
Thanks to that, Rang Dong has gradually reduced production costs, increased labor productivity by 30% (from 5.5 million Led products to 7.5 million products/month); at the same time, launched many “specialties” which are products combining AI with IoT, forming smart systems, applied in Smart Home, Smart City or Smart Farm, ... These products are well received by the market, quickly appearing in millions of Vietnamese families across the country, in the lighting system of border patrol roads, applied in greenhouses, net houses of many high-tech agricultural farms, ...
After a year of digital transformation, Rang Dong’s high-tech product revenue has increased by 144% compared to the previous year; outstanding breakthrough growth, reaching an average of 15-20% from 2019 to present. In 2024, Rang Dong is expected to achieve revenue of 11 trillion VND, an increase of more than 2.5 times compared to before digital transformation. More ambitiously, the company aims to establish a new growth level of 20-25%/year for the 2025-2030 period; striving to reach VND25 trillion in revenue in 2030, more than double that of 2024.
Rang Dong’s story has clearly demonstrated that digital transformation is a “lever” to help businesses operate effectively. At the macro level, digital transformation is increasingly asserting its important role as a driving force for economic development.
According to the Ministry of Information and Communications, the growth rate of Vietnam’s digital economy is currently about 20%/year, 3 times higher than the GDP growth rate. The proportion of the digital economy in Vietnam’s GDP in 2023 is expected to reach 16.5%; in 2024 it is expected to reach 18.6% and will reach 20% in 2025, achieving the target of the Resolution of the 13th National Party Congress.
Google also assessed that Vietnam’s digital economic growth rate is currently at the top of Southeast Asia. E-commerce alone has maintained an impressive growth rate of 25% per year since 2019. In the first six months of 2024, total online retail sales increased by 80% compared to the same period in 2023, reaching 129 trillion VND.
“In human history, economic development has been intensive and depleted. The digital economy is based on a new resource: data. Data is created by humans and is increasingly abundant. For the first time in human history, instead of depleting, humans have created resources for development,” Minister Nguyen Manh Hung explained about the potential of digital transformation.
 |
Manufacturing industrial automation equipment at Nang Luc Viet Technology Joint Stock Company, Nam Thang Long Industrial Park, Hanoi. (Photo: Tue Nghi) |
Responsibility of the entire people
Professor, Dr. Nguyen Khac Quoc Bao, Deputy Director of Ho Chi Minh City University of Economics analyzed: “Looking back at the development process of Vietnam's economy, there was a period when we maintained a high growth rate thanks to the explosion of consumer demand. However, the aggregate demand factor will no longer be the driving force for growth because with the same economic development momentum, people's lives have improved significantly, there is no longer a shortage; the demand of the economy will not explode and increase naturally like in the previous period”.
Vietnam’s economic development has previously relied heavily on labor and resource-intensiveness. In the current context, these factors have not created the driving force for sustainable growth. The development of a growth model based on depth, science, technology and innovation is an extremely urgent task. The 4.0 industrial revolution and the explosive development of science and technology have promoted innovation, e-commerce, new economic models such as the sharing economy, etc.
Digital transformation is a new opportunity to improve labor productivity, develop the country quickly and sustainably. However, to successfully implement the digital transformation revolution, there is still much to do. Although considered a priority area, resources for digital transformation are still very limited, accounting for only about 1% of the budget, much lower than the world average.
When digital transformation has become a revolutionary cause, it is necessary to allocate more appropriate resources for digital transformation. “If the Government increases spending on digital transformation to 2-3% of the budget, it will be a big boost for digital transformation,” Minister Nguyen Manh Hung affirmed.
In addition, we need to quickly perfect digital institutions to both keep up with and create development for digital transformation. Because when there is a digital institution, digital transformation will be comprehensive, otherwise it will only be a pilot. If the pilot is successful but not popularised, digital transformation will not bring much value. This is the main reason why scholars believe that the digital transformation revolution is mainly an institutional revolution.
According to Deputy Director of the National Digital Transformation Department under the Ministry of Information and Communications Ho Duc Thang, digital transformation is a very new field in Vietnam and the world. A new technology that wants to be legalized needs to be carefully studied and evaluated for its effectiveness as well as its duration, to avoid the case where the law is just enacted when the technology becomes outdated.
For example, among the core technologies of the 4.0 industrial revolution, only AI has recently been legalized by some countries because they “bet” that this technology will last for a long time. Therefore, perfecting digital institutions will be a long-term, continuous process and difficult to complete immediately.
In order not to miss the opportunity from digital transformation, experts recommend expanding the “pilot mechanism”. Although the concept of “sand-box” has been mentioned a lot in Vietnam, its implementation is still limited. According to the experience of many countries, it is very difficult to develop technology while waiting for institutions to lead.
At that time, the role of the Politburo’s Resolutions was extremely important, sending out messages to guide the entire system, allowing for readiness to experiment with new things, creating momentum for technological development. At the highest leadership level of the country, just one message, one article could influence the entire political system.
The article on digital transformation - an important driving force for developing productive forces, perfecting production relations, bringing the country into a new era by General Secretary To Lam expressed very new views on the particularly important role of digital transformation.
In particular, the theoretical system for digital transformation was gradually perfected from the perspective of the basic laws of Marxism-Leninism, which is the premise for adjusting production relations to suit the increasingly high level of new productive forces that are being formed and developing strongly thanks to digital transformation. This message is the “compass” and the orientation for national digital transformation in the coming years.
