Mr. Nguyen Chanh Phuong, Vice President and General Secretary of the Ho Chi Minh City Woodworking and Handicraft Association, said that during this time Vietnamese wood and furniture firms still kept in touch with customers through online virtual showrooms and available information technology. If the Covid-19 pandemic had occurred five years ago, Phuong believed that it would have caused double damage: disrupting the market and contact with customers.

Dr. Can Van Luc said that although 2021 was a difficult year, 45% of Vietnam's small businesses still reported growth. As a result of the government's dual goal of "containing the pandemic and promoting socio-economic recovery", foreign direct investment inflows steadily increased, reaching a growth rate of 9.2% in 2021. The recovery of domestic and foreign demand and the government’s support policy helped boost the operation of small businesses and accelerated digital transformation.

CPA Australia's 13th 'Small Businesses in Asia Pacific' survey shows that after the challenging 2021, Vietnam's small businesses are expected to rebound strongly this year, with 7 out of 10 of small enterprises to grow in 2022. Strong investment in technology and government support could be the main drivers of this transformation.

Vietnam was negatively impacted the most by the pandemic last year, with 78% of small businesses seeing this as the biggest barrier to their growth in the year. In response, many small businesses have stepped up investment in improving business operations, with 44% investing more in technology and 42% promoting online business. These are the highest rates among the surveyed markets. Up to 82% of respondents said that investing in technology in 2021 made a big step in their profitability. This was the highest result in the Asia Pacific region.

Big investment in technology and online sales create momentum for the future of small businesses. The survey shows that the more digitized small businesses are, the more potential there is for growth.

According to CPA Australia’s survey, Vietnamese small businesses still held the top position for potential for investment in technology in the Asia-Pacific region in 2021.

Taking advantage of opportunities

Vietnam has about 870,000 enterprises, of which small and medium enterprises (SMEs) account for more than 98%. The report "Digital Development Index of Small and Medium Enterprises in Asia - Pacific" by Cisco shows that the digitalization of small and medium enterprises in Vietnam can contribute US$24 -30 billion to gross domestic product (GDP) in 2024 and a post-Covid-19 economic recovery.

According to Cisco, businesses are facing barriers in digital transformation, such as a lack of vision, challenges in corporate culture, and lack of essential technologies and insight into customer and operation data.

Moreover, digital transformation in small and medium-sized enterprises poses risks related to information security because these firms are the subjects of hackers. As information security capacity has not been invested in heavily, the fear of ensuring network security and information safety has made these enterprises falter, losing the benefits of digitalization.

According to the 2022 plan, the Ministry of Information and Communications will evaluate the digital transformation of 100,000 Vietnamese businesses. The assessment results will be the basis for completing specific action programs, and promoting digital transformation and the digital economy in Vietnam.

Businesses will receive financial support for digital transformation from the state budget. According to Decree 80/2021/ND-CP guiding the implementation of a number of articles of the law on supporting small and medium-sized enterprises, SMEs will receive 50% of financial support if they rent or buy a platform, and digital transformation solutions certified and announced by the Ministry of Information and Communications.

After nearly one year of implementation, SMEdx has selected 23 "made in Vietnam" digital platforms to introduce to Vietnamese businesses through the website Smedx.vn. Last year, more than 16,000 small and medium-sized businesses used the platforms and solutions offered by the program.

Duy Anh