Grappling with digital evolution

Amid the pandemic, with countries imposing social distancing and lockdown orders, digital transformation has become quite the buzzword, being mentioned more often than ever as people and businesses find themselves more reliant on technology. 

Improvements in telecommunication infrastructure like 4G and 5G increased internet access and smartphone penetration, and growing income levels from the burgeoning middle-class are enabling factors to create new opportunities for Vietnam’s digital transforma

1494p4 grappling with digital evolution
Lam Nguyen - Head of enterprise engagement, ASEAN, Industry Platform

According to a report by Google, smartphone penetration in Vietnam has doubled since 2014 and there are now 51 million smartphones, representing over 80 per cent of the population aged 15 years old and above. In their continuous efforts to promote digital transformation in Vietnam, the country’s leaders have been working to create a favourable institutional environment for digital transformation to take off. While the Ministry of Information and Communications is working on the National Digital Transformation Project draft, the Ministry of Planning and Investment is awaiting the prime minister’s approval for the National Industry 4.0 plan, which follows closely the Politburo’s Resolution No.52-NQ/TW dated September 27 on a number of guidelines and policies to proactively participate in Industry 4.0 to ensure active participation in Industry 4.0.

These strategic moves align with the country’s vision in strengthening its digital economy which is expected to top $43 billion by 2025. Moreover, last year the Government Office launched the National e-Document Exchange Platform, a move towards building a foundation for integration and sharing of national digital data. Vietnam’s provincial governments are also ramping up efforts with new action plans to realise their smart city dreams. While this trend is heartening and signals a stronger and more robust Internet of Things (IoT) and ICT market in Vietnam, it begs the question of whether these cities are ready to embark on projects that require not only crucial infrastructure to be in place but also expertise to see them through from the conception to maintenance.

Private sector involvement

Within the private sector, Vietnam’s banking industry has been at the forefront of the Fourth Industrial Revolution. Specifically, local commercial banks have quickly adapted to and applied fintech to banking operations, such as mobile and QR code payments, electronic wallets, tokenisation, and payments via chip cards for domestic cards. Those strong transformations have helped Vietnam’s banking sector improve competitiveness and increase access to banking services for all, especially those in rural and remote areas.

Still, Vietnamese enterprises, especially small- and medium-sized enterprises (SMEs), are still struggling with the concept of digital transformation. According to a 2019 survey conducted by Asia IoT Business Platform, 13.2 per cent of local enterprises surveyed claimed that digital transformation is not present within the organisation, as compared to only 8.4 per cent and 8.8 per cent of those in Indonesia and Thailand respectively. Furthermore, a report by the Vietnam Chamber of Commerce (VCCI) states that SMEs account for 97 per cent of the total number of enterprises in Vietnam. Around 80-90 per cent of the machines used in their operations are imported and nearly 80 per cent are obsolete technologies from the 1980s and 1990s.

Even the biggest players in the manufacturing industry are still considering automation, which is the most rudimentary form of digitalisation in smart factories, as the priority focus in their digitalisation pipeline.

There are a few reasons that could possibly account for the slow rate of digital transformation in Vietnam. These are also challenges enterprise end-users and technology solution providers have to work collaboratively to overcome to derive the best win-win situation for both parties.

Ingrained culture

Why do companies cling on to old systems and ways of working five, or even ten years back? A reluctance to change, and therefore unwillingness to take the tech leap, is an oft-cited reason. It is also worth noting that companies with long-established history find it more difficult to apply technologies into their existing systems.

For example, some big manufacturing firms in Vietnam find it challenging to implement new technologies in their existing factories which have been in operation for a long time. Two of their biggest concerns are the incompatibility between new and old systems and the operational disruptions caused by the change. They further claim that technology or IoT adoption is something they would consider for smart factories being built from scratch.

Lack of understanding

 

Though IoT technologies, including big data, AI, and blockchain, and their capabilities have been hyped in recent years, local enterprises can little know nor grasp what digital transformation actually entails. In the same report by the VCCI, 86 per cent of enterprises surveyed did not know how they can go about embarking on digital transformation. Local enterprises should carefully navigate digital adoption and not just aimlessly jump onto the bandwagon. Setting clear business goals could help filter the solutions that they can adopt, allowing them to achieve more concrete and valuable returns for their investments. For smaller operations, they can start with implementing less complex digital tools that deliver immediate and observable efficiencies.

High investment costs

Companies in Vietnam are grappling with the initial cost pressure of investment and implementation. Those looking to introduce digital transformation measures are often put off by the perceived associated costs.

It is pivotal that solution providers sit down and have conversations with these companies to understand their pain points and budgetary constraints. Interestingly, this issue is being resolved by the evolution of partnerships between connectivity providers, technology vendors, and enterprises.

Security issues

Security (both physical and virtual) continues to be a major concern for enterprises looking to adopt digital solutions. However, security policy issues like data retention are not on the top of the mind of these business leaders yet. The biggest concern to them is still the ability of competitors to glean valuable insights into their operations if a security breach is allowed.

Catching up with ASEAN counterparts

It is undeniable that Vietnam is trying to leapfrog and close the gap with other ASEAN countries by leveraging on advanced technologies to boost its economy.

As mentioned above, a foundation for a favourable institutional environment created by the government is a good start, which is comparable with “Industry4WRD” of Malaysia, Inclusive Industrial Strategy (i3s) in the Philippines or the roadmap of Thailand 4.0 by the Thai government.

Hopefully, a more detailed action plan for the Fourth Industrial Revolution will follow while local enterprises can grasp the biggest opportunity created by the COVID-19 pandemic to bring business activities into the digital space, accelerating digital transformation and making their way into the new normal. VIR

Lam Nguyen

Vietnam aims to become a digital society by 2030

Vietnam aims to become a digital society by 2030

Prime Minister Nguyen Xuan Phuc has approved to a national digital transformation programme that will run until 2025, with a vision extending to 2030, 

Asia's fishermen and farmers go digital during virus

Asia's fishermen and farmers go digital during virus

Farming communities in South East Asia are embracing online selling for the first time during lockdown.

 
 

Other News

.
Ministry of Information and Communications issues 2nd set of postage stamps on Covid-19 prevention
Ministry of Information and Communications issues 2nd set of postage stamps on Covid-19 prevention
SCI-TECH & ENVIRONMENTicon  05/05/2021 

The Ministry of Information and Communications (MIC) has released a second set of stamps on Covid-19 prevention to raise awareness, spirit and responsibility of each individual and community in prevention, combat and readiness to cope with epidemics.

One more Vietnamese carrier provides 5G for iPhone users
One more Vietnamese carrier provides 5G for iPhone users
SCI-TECH & ENVIRONMENTicon  05/05/2021 

IPhone 12 users in Vietnam are now able to experience 5G. Previously, 5G mobile networks only adapted to high-end phone products from Samsung and some Chinese manufacturers.

Hue to pilot public bike-sharing scheme
Hue to pilot public bike-sharing scheme
SCI-TECH & ENVIRONMENTicon  03/05/2021 

An innovative public bike-sharing scheme has been launched to develop a bicycle transportation plan for 2021-2026 in Hue City that mobilises private investment for bike-sharing.

People eager to exchange plastic bottles for socks in HCM City
People eager to exchange plastic bottles for socks in HCM City
SCI-TECH & ENVIRONMENTicon  02/05/2021 

A project in HCM City is creating pairs of socks from recycled plastic bottles. And anyone who donated bottles to the scheme last week were given a pair of socks in exchange.

Natural disaster preparedness should be long-term: minister
Natural disaster preparedness should be long-term: minister
SCI-TECH & ENVIRONMENTicon  02/05/2021 

Disaster prevention should be a radical, long-term strategy, based on new technology such as forecasting and remote sensing to minimise damage.

USAID launches environmental conservation projects in Vietnam
USAID launches environmental conservation projects in Vietnam
SCI-TECH & ENVIRONMENTicon  01/05/2021 

The US Agency for International Development (USAID) is launching two new projects to facilitate Vietnam to contribute climate-positive actions to helping address the global climate crisis.

"Made in Vietnam" sea-observation satellite Nanodragon
"Made in Vietnam" sea-observation satellite Nanodragon
SCI-TECH & ENVIRONMENTicon  01/05/2021 

Micro-satellite NanoDragon, developed and built by the Vietnam National Space Center (VNSC), will go through a final test this month before it is put into orbit this September.

Up to six storms to hit mainland this year: meteorologist
Up to six storms to hit mainland this year: meteorologist
SCI-TECH & ENVIRONMENTicon  30/04/2021 

About 12-14 storms could hit the East Sea this year, with around half expected to directly affect Vietnam’s mainland, a meteorologist has said.

Harmful chemical still widely used in fridges, air conditioners
Harmful chemical still widely used in fridges, air conditioners
SCI-TECH & ENVIRONMENTicon  29/04/2021 

A refrigerant chemical that is harmful to the environment and has ozone depletion potential is still being used in many household and industrial air conditioners and refrigerators in Vietnam.

Vietnam’s social networks run race with the world’s technology giants
Vietnam’s social networks run race with the world’s technology giants
FEATUREicon  02/05/2021 

Governments around the world are trying to restrain the power of technology giants, which presents a great opportunity for Vietnam’s social networks to establish their foothold with their own characteristics.

Vietnam’s average temperature increases 0.5-0.7 degrees Celsius annually: report
Vietnam’s average temperature increases 0.5-0.7 degrees Celsius annually: report
SCI-TECH & ENVIRONMENTicon  29/04/2021 

Vietnam’s mean annual temperature has increased by 0.5-0.7 degrees Celsius since 1960, with the rate of increase most rapid in the southern region and the Central Highlands, according to the Climate Risk Country Profile: Vietnam.

Con Dao National Park revives coral reefs
Con Dao National Park revives coral reefs
SCI-TECH & ENVIRONMENTicon  28/04/2021 

The coral reef in the Con Dao National Park is recovering following the implementation of a project since May 2018, according to the board that has been running it.

HCM City unveils ambitious environmental plans
HCM City unveils ambitious environmental plans
SCI-TECH & ENVIRONMENTicon  27/04/2021 

The HCM City People's Committee has approved a programme to reduce environmental pollution over the next decade to improve the city's environment and enable it to adapt to climate change.

Five Vietnamese among top 100 scientists in Asia
Five Vietnamese among top 100 scientists in Asia
SCI-TECH & ENVIRONMENTicon  28/04/2021 

Singapore-based Asian Scientist magazine has included five Vietnamese scientists on the list of 100 Asian scientists who have had outstanding achievements in scientific research.

Hack4Growth launched in Australia
Hack4Growth launched in Australia
VIETNAM & WORLDicon  27/04/2021 

Startup Vietnam Frontier - Australia (SVF-AU) and the Vietnam Australia Innovation Network Inc (NIC-AU) have launched the 2021 Hack4Growth Australia, with the aim of promoting the ecosystem for innovative start-ups.

Start-up grows as trend among college students
Start-up grows as trend among college students
SCI-TECH & ENVIRONMENTicon  27/04/2021 

Start-up has become a trend among youngsters with driving ambition. Some, though still in college, have started their business out of their actual studies.

Attitudes toward privacy: from village culture to modern times
Attitudes toward privacy: from village culture to modern times
FEATUREicon  01/05/2021 

Privacy is an interesting topic of discussion in Vietnam. It has been influenced by village culture, an important component of the Vietnamese cultural identity.

DTS Software Vietnam wins Sao Khue Awards 2021 for new software products
DTS Software Vietnam wins Sao Khue Awards 2021 for new software products
SCI-TECH & ENVIRONMENTicon  26/04/2021 

Passing over 300 solutions and services of 161 companies, Walk-in-home, a design software product developed by DTS Software Vietnam Co., Ltd. has been awarded Sao Khue Award 2021.

Expats join local people to clean up coastal city
Expats join local people to clean up coastal city
SCI-TECH & ENVIRONMENTicon  25/04/2021 

A group of foreigners living in the central coastal city of Da Nang has joined hands with local people to clean up the area around the Son Tra Peninsula, which is considered the city’s “green lungs”.

HCM City to have 80% of waste sorted at source
HCM City to have 80% of waste sorted at source
SCI-TECH & ENVIRONMENTicon  24/04/2021 

The HCM City Department of Natural Resources and Environment has taken steps to ensure that 100% of its domestic solid waste is collected and treated and at least 80 per cent of solid household waste is classified at source by 2025. 

 
 
 
Leave your comment on an article

OR QUICK LOGIN