Since its appearance, the digital economy in Vietnam has offered various services to serve people’s needs.
Using an e-wallet to pay for transport services.
Domestic information technology (IT) enterprises, therefore, have excitingly jumped in to use state-of-the-art technologies to create new platforms, utility applications, and services, bringing impressive profits to business owners and the government at the same time.
Reports from Google and Temasek from Singapore show that the digital economy in Vietnam reached US$3 billion in 2015, increased to $9 billion after three years, and is expected to stay at $30 billion in 2025.
According to another report by the leading digital research network Data61 from Australia, GDP of Vietnam could rise by $162 billion in the next 20 years if the national digital economy transformation is successful.
Yet to reach this encouraging number, it is necessary to clearly identify the value of technology enterprises as well as units to implement technological products in this important transformation.
The business result for the first 6 months in 2019 of Viettel, one of the domestic leading enterprises in telecoms, illustrates the income from telecommunications in the nation grew by 2.9 percent compared to this time last year, reaching VND70,000 billion (approx. $3.01 billion).
The main reason for this growth was the revenue from 4G data services, one of the highly sought ones in the digital economy transformation, with the rise of 17.5 percent compared to the same time last year.
Similarly, VNG Corporation reported that its income in this second quarter stood VND1,302 billion, an impressive increase of 31 percent compared to this time last year.
This net profit rise came mostly from online game business as well as online advertisements.
This year, VNG is planning to continue focusing on online games, connection platforms, online payment methods, and cloud services, especially the strategic product ZaloPay, an e-wallet with 100 million members.
At the moment, VNG’s Zalo is effectively answering the communication as well as daily needs of the public while being an excellent platform for state authorities to establish Government 4.0.
Another successful example of technology enterprises is MoMo e-wallet, with nearly 10 million members.
MoMo contributes to the promotion of an economy using virtual money thanks to its thousands of payment and shopping methods.
In order to do this, MoMo has to closely cooperate with 10,000 business partners, 15 international and 50 domestic banks via Napas gate.
Modern banks do not stay out of this game. Orient Commercial Bank (OCB), for example, successfully collaborated with IBM to launch the first IBM Integrated Analytic System (IIAS) in Vietnam.
This will become the foundation for OCB to further develop digital products and increase the quality of current services, creating larger values from the digital platform.
These active transformations of technology businesses and those implementing technologies signal a need of introducing more comprehensive concepts for legitimation purposes and the building of a suitable management mechanism.
According to Deputy Minister of Science and Technology Bui The Duy, it is essential to thoroughly understand the concept of digital economy.
This part of the national economy consists of business models that can create digital products and services, or deliver support for digital services.
The most remarkable feature of the digital economy is that it is the gathering place of a series of cutting edge technologies such as cloud computing, artificial intelligence, big data in the Industry 4.0 era. These advanced technologies have allowed businesses to handle a huge amount of workload while reaching smarter decisions.
Deputy Minister of Information and Communications Nguyen Thanh Hung commented that the development of digital economy means the use of digital technologies and data to form new business models, greatly enhancing working performance.
It is expected that in this digital economy, companies will establish ecosystems for manufacturing and trading products. Certain novel products or services like Grab, Uber, or Airbnb are forecast to appear more.
In the recent conference ‘Perfecting Institutions and Founding Conditions for Digital Economy Development in Vietnam’, Deputy Minister of Planning and Investment Vu Dai Thang cited statistics of the research by Google and Temasek as a proof for a promising future for the national economy.
Yet, it is critical to clearly and formally define the concept ‘digital economy’ in Vietnam.
Answering the question about possible challenges in Vietnam in the digital economy transformation, Mr. Bui Quang Ngoc, Vice President of FPT Group, identified them as the gap between planning and policy implementation in the reality.
Mr. Nguyen Trung Chinh, President of CMC Corporation, said that the policies for digital economy development in Vietnam cannot keep up with those in other nations in the region or in the world.
The outdated digital infrastructure of Vietnam would severely affect economic growth in the Industry 4.0 era, he added. This requires a comprehensive and thorough solution soon.
These are the scenarios forecast by the report ‘the Future of Digital Economy in Vietnam to 2030, 2045’.
_The traditional scenario: until 2045, digital technology is expected to contribute $196 billion to GDP, according to the price in 2020 and the Purchasing Power Parity (PPP) - $61 billion according to the price in 2005 and the exchange rate average. The digitalization will be quite low, and the information and communications technology (ICT) industry will witness a slow rise.
_The digital export scenario: until 2045, digital technology is expected to contribute $331 billion to GDP, according to the price in 2020 and PPP ($103 billion according to the price in 2005 and the exchange rate average). The ICT industry will grow fast, mainly focusing on exporting products; but domestic digital implementation will be still limited.
_The digital consumer scenario: until 2045, digital technology is expected to contribute $216 billion to GDP, according to the price in 2020 and PPP ($67 billion according to the price in 2005 and the exchange rate average). Digitalization will happen at full force in domestic industries; yet most ICT products are imported, and the ICT industry will witness a slow rise.
_The digitalization scenario: until 2045, digital technology is expected to contribute $544 billion to GDP, according to the price in 2020 and PPP ($169 billion according to the price in 2005 and the exchange rate average). Digital technology is highly applied in the whole national economy and the ICT industry will witness a significant growth. SGGP