With the entire ASEAN region hit hard by the global pandemic, the Vietnam Government has set aggressive digital transformation ambitions to become a global powerhouse.

The Ministry of Information and Communications introduced eight core programs for the next five years.

“The ICT industry can create a pair of wings for the country to fly. One wing is digital technology and the other is communication,” said Minister Nguyen Manh Hung, adding that if a country wants to develop and make breakthroughs, it needs spiritual strength.

The core programs look to transform Vietnam’s postal system and telecommunications infrastructure to promote the country’s digital economy. This will include deploying 5G, having one smartphone per person, one fiber-optic line per household as well as cloud infrastructure, artificial intelligence, digital identity platforms and the Internet of Things for industries.

To drive this innovation, Ho Chi Minh City’s Department of Information and Communications has signed an agreement with the US Trade and Development Agency to provide technical assistance for the building of a smart city operations center. 

With a total investment of more than US$1.4 million, this center is among four pillars in a master plan to transform Vietnam’s southern economic hub, which will act as the ‘brain’ of a smart city to collect and analyse real-time data and information to help decision-makers govern, plan, and shape the future development of the city.

The core programs will also focus on transforming Vietnam’s e-government to a digital government where all activities will be performed digitally and create more interaction between the Vietnamese population and the state. To achieve this, Prime Minister Nguyễn Xuân Phúc urged ministries to have 30% of their online public services reach level 4 by the end of this year.

Public service level 4 allows users to fill in and send application forms to committees entirely online, however many ministries and localities have less than 10% of their public services online.

The Ministry of Information and Communications proposed increasing local budget spending on information and technology from the current rate of 0.3% to at least 1% to promote the e-Government.

The said transformation efforts are to be promoted by all as ‘a revolution of the whole nation’ and will go hand in hand with the protection of digital sovereignty by its people and the media.

As digital transformation projects can expose vulnerabilities that can be exploited by hackers and threat actors, the Government intends to turn Vietnam into a cybersecurity powerhouse by mastering the ecosystem of cybersecurity products.

As of 2019, Vietnam ranked 50th in the International Telecommunications Union’s (ITU) global cybersecurity index rankings, rising sharply from 100 in 2017.

‘Make in Vietnam’ to boost digital ambitions

Included in the Ministry’s core programs is the ‘Make in Vietnam’ initiative, which aims to promote the domestic ICT industry where digital products are birthed in the country.

There are currently 50,000 technology businesses in Vietnam, with many solutions being produced by young enterprises and experts. And the country has big ambitions to double this number to 100,000 by 2030, which will account for 20% of the GDP.

Last year, the total revenue of the whole ICT industry was estimated at nearly US$135 billion, more than double compared to 2015. The sector also contributed over US$4.3 billion to the state budget.

In a draft strategy by the Ministry of Information and Communications, the Government has set ambitions to be placed in the top two countries in ASEAN and within the top 50 in the world for technology and innovation by 2030.

The Ministry said hitting these targets would be challenging, given the country’s heavy dependence for core technology on foreign countries, the low added value of IT products and limited innovation capacity and competitiveness, together with increasing competition from international IT companies.

To overcome these challenges, the first solution is to improve the legal framework to create a favourable environment for digital technology companies. The country will also focus on strengthening research and development capacity, developing a robust market for digital technology companies, and building a data industry and digital technology ecosystem.

The second solution is to work with other nations in the ASEAN region to bounce back strongly from the pandemic using digital technologies. For example, Vietnam is seeking experience from Indonesia in digitalisation and how to enact relevant policies.

“With its great potential in IT, Vietnam is sharing experiences and also learning lessons from other regional nations to develop itself into a veritable digital economy and the ASEAN into a big digital economy. This will help the ASEAN address emerging challenges,” said an official from the Ministry of Foreign Affairs.

Vietnam’s efforts to develop a pro-business e-government and a digital economy have received applause from the international community, especially amid a surge in the pandemic hurting economic growth.