Digital transformation has been at the epicentre of economic progress throughout the world. In the Asia-Pacific region specifically, places like Singapore have earned the badge of being the area’s ‘Silicon Valley’ due to the sheer increase in tech innovations coming from there. The digital transformation in Vietnam, however, has seen the most significant developments. Between 2016 and 2019, the Vietnam digital progress pace outran other regional economies.
The digital society index tracks the performance of any given area. According to recent research, Vietnam reached 49 points in 2019 -an increase of 12 points from three years previously. This advancement has given Vietnam a new level of overall connectivity and digitization compared to many other parts of the world.
A transitioning nation on the precipice of change
The digital index score takes five specific categories into account; digital identity, digital citizenship, digital lifestyle, digital commerce, and connectivity. Vietnam managed to increase its score mostly through the connectivity aspect, but also saw vast improvements in lifestyle, citizenship, and identity. The launch of a data portal to help connect and share information with the public set this change in motion.
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The region has also shown significant improvement in mobile internet usage, with close to half the population subscribing to mobile internet from 2010 to 2019. This increase in internet subscription marked Vietnam as the leader of the pack in the region, with neighbours Thailand and Malaysia seeing a 44% increase. Vietnam has also adopted the digitization of its national identity system for all citizens.
The COVID-19 pandemic has pushed the digital world even further into existence. Due to social distancing measures and the need for less contact to help curb the spread of the viral outbreak, the demand for tech solutions has been amplified. Looking at Vietnam, their ability to deal with the pandemic without the devastation that many other, sometimes more digitally advanced, countries suffered, provides an inspirational catalyst to continue its level of sustained growth even throughout the breakdown of economies across the world.
The National Digital Transformation Roadmap and what it means for Vietnam
In June 2020, Nguyen Xuan Phuc, the Prime Minister of Vietnam, decided to further expand new technology opportunities and advancements by approving the National Digital Transformation Programme. The programme will be used to help update everything from government operations to business processes, and improve the lifestyles of citizens.
The goal is to create a digital environment that expands and enhances the lives of those living in Vietnam safely and humanely. The press release issued stated that the region aims to see the improvement and coexistence of a digital economy, society, and government by 2025.
Trends in Vietnam’s digital economy
Currently, the digital economy in Vietnam is lacking when compared to other areas of APAC. However, the latest digitalization program launched by the country’s government aims to see it increase to 20% of the region’s total GDP.
The growth in the digital progress in the region has also garnered some impressive projections. It is now likely that Vietnam will take its place in the top 50 countries on the following indexes: information and communication technology development, global competitiveness, and global innovation.
The IT sector in the country has also seen steady growth, and a recent press release showed that the revenue from IT, telecommunications, and electronics reached an impressive $112.5 billion USD in 2019. This revenue doubled in just four years from where it was in 2015. The products that led to the most prominent revenue increases were mobile phones and computers, which shows the population’s willingness to jump onto the digital train.
Tech companies have also been encouraged to get in on the ground floor of the advancement of the digital landscape in Vietnam, and in 2019, the country held its first national forum dedicated to the advancement of Vietnamese tech startups.
Challenges to progression
Although progression is on the incline in Vietnam, there are still some aspects to take into consideration if it wishes to make it to the digital economy party with the big players. For example, digital commerce, innovation, and startup policies are not entirely up to par with the rest of the APAC region yet. Updating networks to facilitate 5G mobile technology will also pose some challenges, and likely to make up only 6% of the total connections in the country. The Asia-Pacific region sees a total average of 23%, meaning Vietnam will be significantly lower in this regard.
Putting aside the challenges that could slow the Vietnam digital progress pace, the region is seeing significant advancement in all areas of the digital index. The digital transformation in Vietnam isn’t poised to be an ‘if’ situation, but rather a ‘when’, because of governmental commitment to taking their country to new digital heights and increased funding finding its way into the country’s technology and innovation sectors.