Digital Economic Development: An irreversible process

That is a statement made by the Party Central Committee member, Minister of Information and Communications Nguyen Manh Hung at the Vietnam Economic Forum 2019.

Global trend

Digital technology, digital transformation, digital economy, digital era are a multi-decade process. Creation, production and business processes are taking place more and more on the internet. With the emergence of the Industrial Revolution (CMCN) 4.0, the world is at a breaking point in the digital transformation process. This is the opportunity for Vietnam to realize its mighty Vietnamese aspiration.

Digital economy is economic activities that use digital information and digital knowledge as the main production factor; using the Internet and information networks as space for operations; and using ICT, that is, telecommunications and IT, to increase labor productivity, and to optimize the economy. In simple terms, the economy is related to digital technology.

Digital economy uses the Internet and information networks as space for operations; using telecommunications and IT to increase labor productivity

In a narrow sense, digital economy is only related to the ICT sector. In a broad sense these are the areas closer to digital technology, such as digital platforms. In the broadest sense are all of the domains where digital is used.

Digital economy helps increase labor productivity, helps economic growth. Digital economy also helps sustainable growth, inclusive growth, because it uses knowledge rather than resources. The lower cost of participation in the digital economy creates the opportunity for more people. Digital technology is borderless, thus reducing the rural and urban gaps. Digital technology also gives us new approaches, new solutions to effectively solve human long-standing problems, such as: environmental pollution, increasing gap between rich and poor, and measuring mood. society, people’s participation in policy making …

In Vietnam, the digital economy has appeared since the existence of computers, especially when there were personal computers, in the late 1980s; The strong start was with the Internet, in the late 1990s; popularity is when the smartphone density is above 50%, by the end of the 2000s; and was strongly promoted when the appearance of Industry 4.0, in the late 2010s.

The digitization of the economy is a revolution in policy

Vietnam’s digital economy over the past time has basically developed spontaneously, but has grown quite quickly. The fastest way to accelerate the digital economy is to use digital technology to change the way we are manufacturing, working. For example, using cameras to reduce guardians, that’s digital economy. Automatic watering when the soil dries, that’s digital economy. Using electronic documents instead of paper is also digitizing the economy. The revolution of all-people digital start-ups and digital technology universalization will help Vietnam digitize its economy very quickly.

Digital technology will spawn new business models, challenge new or replace old business models.

Digital Economic Development: An irreversible process
Digital economy helps increase labor productivity, helps economic growth

Many say, digitizing the economy is more of a policy revolution than a technological revolution. The first is adopting new business models, adopting new technologies that fundamentally change industries, called X-tech. These X-tech (Fintech, EdTech, AgriTech …) are often the creation that destroys the old. If we accept the new, the world’s new technology will come, global talent will come, and a new industry will emerge. At that time, the cradle of Vietnam will create digital technology products for export.

5 fundamental factors to support digital economic development

The traditional policy approach is usually: Governance is open, wherever management is opened, then it is closed. A new approach that many countries apply, called the Sandbox approach: What does not know how to manage, let self-development, but in a certain space, in a certain time, to the the problem comes out clearly, which is usually not as much as the managers initially predicted. After that, a new policy has been formed and a regulation to be managed. This is one of the policy approaches consistent with the Industry 4.0.

The fundamental factors to support Vietnam’s digital economic development include:

Firstly, modern telecommunications – IT – digital technology infrastructure is on a world level. At that time, broadband and high speed plus the fact that each citizen had a smartphone, then 5G technology appeared in Vietnam, which would bring our country to pace with developed countries;

Second, the Government’s policies related to digital economy, digital technology and the Internet must be globally competitive so that Vietnamese people do not have to go abroad to start digital technology but also bring foreigners and talents to global capabilities in technology development Vietnam;

Third, the Government spends a lot on digital technology products, leads the digital economy through building e-Government, in order to create the initial market to develop technology enterprises, the whole population starts up industrial digital technology; Fourth is human resource training, along with bringing English and IT training into mandatory training programs.

Three steps to converting numbers

For digital transformation, Vietnam can choose a 3-step strategy: Step one, accelerate the digitization of fields and industries, accelerate the digital transformation of the Government, transform the number of enterprises, and transform digital in society, to increase operational efficiency, increase labor productivity and create new growth opportunities. Step two, use digitization as a competitive advantage domestically and globally. Step three, towards a comprehensive digital economy, all sectors are digitized, forming new generation digital industries, these new industries will be the growth engine for the economy.

And finally, when the digital revolution, Industry 4.0 happens, the future is not on the long line of the past. In countries like Vietnam we have a chance to make a breakthrough. But it must be a new, non-traditional, non-sequential thinking. Both state management, both enterprises, need a breakthrough in thinking, in policy, in approach.


You are invited to watch the entire content of the speech of Minister of Information and Communications Nguyen Manh Hung at the Vietnam Economic Forum 2019 HERE


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