Vietnam is a breeding ground for digital businesses.

Present in Vietnam when the platform economy is still quite new, Ms. Dang Thuy Trang, Director of External Relations of Grab Vietnam, commented: in the past 10 years, Vietnam has witnessed strong progress in the digital transformation roadmap and development of the platform economy in Vietnam. The Party and Government have had a very open and supportive approach to new technology, innovation, and digital economy, from which there have been orientations and strategies concretized by appropriate policies to promote innovation, application of technology in all aspects of the economy as well as life. Along with that, Vietnam possesses advantages to develop the digital economy even faster, including people who are quick to adapt to technology, open to new technology products and services, and a strong entrepreneurial spirit among young people.

Platform businesses contribute about 10% to GDP

NHAT THINH

"Thanks to these combined factors, Vietnam's digital economy has become one of the fastest growing economies in Southeast Asia, thereby creating conditions for many digital platforms like Grab to develop and bring the benefits of the digital economy to more and more people," said Ms. Dang Thuy Trang.

Grab is just one of the successful digital technology enterprises in Vietnam. In the past year, the image of NVIDIA Corporation Chairman Jensen Huang and Prime Minister Pham Minh Chinh sitting and drinking beer on the night streets of Hanoi after signing an agreement showed that the "big eagle" - bigtech has chosen Vietnam to "nest". In fact, there has been a wave of startups in the field of information technology in general or digital economy, digital enterprises, fintech... in Vietnam. According to a survey, by 2024, Vietnam will have more than 750 artificial intelligence (AI) startups, ranking second in Southeast Asia after Singapore; raising capital of about 43 million USD, an average of more than 60,000 USD/startup. Data from the Ministry of Information and Communications shows that there are currently about 50,350 digital technology enterprises operating nationwide, more than the Government's target of 48,000 enterprises. The rapid growth of digital technology enterprises creates a foundation for expanding and developing digital business services, including platform services.

The development of digital enterprises has accelerated the digital economy in Vietnam. E-commerce, ride-hailing, online hotel booking, etc. have become popular with people. A report from the Central Institute for Economic Management (CIEM) on Grab - a pioneer in technology application in Vietnam, shows that the participation of this platform has promoted the growth of the transportation industry as well as other business sectors based on the platform, thereby making a meaningful contribution to Vietnam's economic development. Specifically, in 2022, Grab contributed 7.8% in added value to the transportation platform industry; 1.31% in added value of the platform industry and 0.13% in GDP of the economy. Vietnam aims to have the proportion of the digital economy in GDP reach 20% by 2025. Total revenue of the digital platform economy sector reached 52 billion USD, an increase of 30% compared to the estimated implementation in 2024 (40 billion USD). Accordingly, the proportion of digital economy in each industry and field will reach at least 10% by 2025, doubling by 2030...

Civil servants of District 5 People's Committee scan QR code on CCCD to look up information when handling administrative procedures

NHAT THINH

A report from CIEM shows that in the past two years, Vietnam has been continuously assessed by international organizations as the country with the fastest digital economic growth rate in Southeast Asia, about 28% in 2022, 19% in 2023 and 22% in the first 6 months of 2024. The rapid growth of digital technology enterprises has created a foundation for the expansion and development of digital business services, including platform services - contributing about 10% to GDP. The development of platform businesses will lead to the growth of supply industries. The final product of the platform industry spreads to the added value and income of the economy at 1,230 and 1,294 respectively, higher than the average of the economy. Accordingly, every additional 1 billion USD in final products of the platform industry will increase the output of the entire economy by more than 2.75 billion USD, stimulate the added value of the economy by nearly 1.2 billion USD, creating 93,700 opportunities.

job

and increase income of

worker

in the economy by 0.73 billion USD.

Sharing his own experience and witnessing the potential of digital technology over the past 5 years, Dr. Nguyen Quang Dong, Director of the Institute for Policy Research and Media Development (Vietnam Digital Communications Association), affirmed: With the goal of turning Vietnam into a developed, high-income country and a middle-class power by 2045, digital technology and AI need to be turned into new growth drivers. The biggest benefit is to solve the productivity problem for the economy, focusing on two main aspects: productivity

labor

and the efficiency and effectiveness of existing economic sectors. With appropriate application strategies, digital technology is also the key to contributing to solving Vietnam's three biggest strategic challenges in the next two decades, which are urbanization management, population aging, and climate change response.

Vietnam's digital economy is growing strongly

JADE PEACH

Assessing that Vietnam currently has many advantages in the development of the digital economy, Mr. Dong cited, first of all, strong resources. Vietnam's population structure has exceeded the milestone of more than 100 million people, of which the proportion of young people is up to 21% between the ages of 10 and 24, the highest in the history of the country. In economics, the most important thing is the demand side, so the young population loves technology, the rate of openness to the Internet

society

very high is a huge natural advantage of Vietnam on the path of digital transformation. The second advantage of Vietnam and other economies that come after is that they are not too attached to old infrastructure. Comparing the speed of digital transformation of Western countries and China, this can be clearly seen. Western countries are slower at digital transformation because of their aging population and heavy financial systems tied to credit cards. Vietnam has the advantage of being a latecomer, not too dependent on legacy infrastructure and businesses operating in traditional fields. Along with that, the National Assembly and the Government have also passed many laws and policies that prioritize and target AI, data, digital transformation, semiconductors, etc. Natural conditions combined with an open environment will create "land" for technology businesses to have an environment to develop.

Mr. Vu Hoang Lien, Chairman of the Vietnam Internet Association, also has an optimistic view that the digital transformation process and the application of technology in industries and fields have greatly contributed to economic growth in recent years. Not only in direct fields such as platform economy, e-commerce, information technology, but also in the spread, thereby creating added value in the economy is very large. For example, e-commerce activities, technology-based ride-hailing, online hotel booking have promoted the increase of cashless payments in Vietnam. This has contributed to the digital transformation process, forming modern digital banks, etc. He emphasized: Science and technology in general is both a creation, an investment, and a foundation for other economic sectors. If we increase investment, promote digital transformation activities, and develop the digital economy, we will contribute to the country's economy achieving the GDP growth target of 8% in 2025. Moreover, investment activities promoting technology in general will promote greater value addition in the next 4-5 years, contributing greatly to the target of double-digit economic growth in the following years.

Call Grab

NHAT THINH

Dr. Nguyen Quang Dong affirmed: With the goal of turning Vietnam into a developed, high-income country and a middle-class power by 2045, digital technology and AI need to be turned into new growth drivers. If there is an appropriate application strategy, digital technology is also the key to contributing to solving Vietnam's three biggest strategic challenges in the next two decades, which are urbanization management, population aging, and climate change response.

However, it is necessary to frankly admit that in terms of technology, Vietnam's foundation is still "thin", not capable enough to research and develop core technology, for example in high-tech fields such as semiconductors and AI. Therefore, the development strategy needs to focus on cooperation with leading countries in terms of technology. Vietnam's young human resources need the opportunity to approach, rub shoulders with and learn from large technology corporations in the world.

world

.

To do that, it is necessary to actively create a good business environment to invite leading technology partners to do business in Vietnam; at the same time, gradually bring domestic enterprises to participate in suitable links in the supply chain, the value chain of the global technology market. Because if you are not in the technology supply chain, you cannot expect anything in learning and receiving technology. The hasty mentality, taking shortcuts, wanting to "Made in Vietnam" leading to administrative solutions such as erecting market barriers, limiting competition will create a series of consequences. This is the crucial point that policy makers need to be realistic and sober to perceive the context of Vietnam in the global game.

This expert analyzed: American enterprises are several decades ahead in terms of technology. They also have the advantage of market scale when providing services globally. The advantage of Vietnamese enterprises is flexibility and agility in product development, the advantage of American enterprises is building digital infrastructure for the world - a competitive advantage that not every time Vietnam wants to do it. Therefore, taking advantage of each other's advantages is necessary. If we close the door and build barriers, Vietnamese enterprises - especially small and medium enterprises - will lose the ability to access such superior global infrastructure. For example, cloud computing is the infrastructure, that is, the "road" of the global technology market. Vietnam does not need to build roads anymore, on the contrary, it just needs to take advantage of the available "road" to go.

Digital business development helps digital economy accelerate (Viettel Operation Center in Hoa Lac - semiconductor technology)

NGOC THANG

"Game companies like Sky Mavis, for example, do not need to build their own roads or wait for Vietnam's roads anymore, but just need to do what they do best, which is making games; then use the "roads" of Amazon, Microsoft... and enter the "global app market" (Apple Store, Google Play...) to "export" their games to players around the world," Mr. Dong analyzed and noted: "Vietnam needs to seriously prioritize reforming the domestic market economy institution. Our market economy institution is still incomplete, the capacity of market regulatory institutions is increasingly left behind compared to the level of development and complexity of business sectors. The business environment, the capacity to investigate unfair competition, and the court institution to resolve civil and economic disputes are still weak. Property ownership rights and business safety of enterprises are still low. The faster and more thoroughly these issues are improved, the more the dream of a prosperous Vietnam in 2045 will come true," this expert proposed.

Sharing the same view, Mr. Vu Hoang Lien said that recent resolutions and policies show that changing the mindset of state leaders on promoting science and technology, digital transformation, and digital economy is the most important. Following that are preferential policies, loosening the constraints on mechanisms or "seed" investment of the state that will spread. When these fields develop, they will inevitably attract individuals, start-up businesses and accelerate investment. However, in addition to incentive policies, it is necessary to continue improving the business environment and developing the private economy. In particular, creating trust for the business community and businesses is extremely important. "Support policies are the driving force to promote business development, accelerate startups, and innovate. However, the issue of policy implementation and deployment is of concern. In particular, we must find a way for the private economy to see a transparent and fair environment. From there, they will be bolder to invest and expand their operations further. This will also attract more world technology enterprises to Vietnam," Mr. Vu Hoang Lien shared.

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Source: https://thanhnien.vn/viet-nam-la-manh-dat-uom-mam-cho-doanh-nghiep-so-185250223062414022.htm