Four Pillars Driving Vietnam's Digital Economy

In 2024, Vietnam's national digital transformation focuses on developing a digital economy built on four key pillars: information technology, economic sector digitalization, digital governance, and digital data. It aims to drive rapid and sustainable socioeconomic development.

5G will play an important role in advancing Vietnam's digital infrastructure development

According to Prime Minister Pham Minh Chinh, this is the third consecutive year that Vietnam celebrated the National Digital Transformation Day as an important event demonstrating the joint efforts for national digital transformation, developing the digital economy, digital society and digital citizens.

The event also conveyed the Government's message of tenacity to pursue the digital transformation revolution in a profound, comprehensive, substantive and effective manner to foster rapid and sustainable socioeconomic development, improve the material and spiritual life of the people, modernize national governance, and bring benefits to all people and the country.

Tremendous progress

Vietnam has made dramatic progress in global digital transformation rankings. Its e-Government Development Index 2024 climbed 15 places to rank 71st out of 193 countries. Its Global Innovation Index 2024 advanced two places to rank 44th out of 133 countries. Its Global Cybersecurity Index 2024 went up eight places to rank 17th out of 194 countries.

The information technology (IT) industry in Vietnam has positively impacted many sectors, with 51,000 digital companies and 1.5 million jobs created. In the first nine months of 2024, digital revenue reached US$118 billion, a 17.8% increase year on year, while software and digital service revenue hit US$6.64 billion, up 9.9%. Digital exports were projected at US$100.8 billion, growing by 18.3%. Major firms like Samsung, Qualcomm, Infineon and Amkor are investing billions in manufacturing expansion, with many large-scale projects under negotiation.

Economic digitalization is quite optimistic. Many businesses have fostered digital transformation in management, investment, construction, production and application of many modern technologies such as artificial intelligence (AI), cloud computing and internet of things.

E-commerce has continued growing rapidly, ranking among 10 fastest e-commerce growth in the world (revenue reached US$20.5 billion in 2023, up 23% year on year, and is expected to reach US$27.7-28 billion in 2024, up 36% - highest in 10 years).

Cashless payments have been widely deployed nationwide. 87% of adults have bank accounts; cashless payments grow 50% annually. As many as 9.13 million customers use Mobile Money.

Digital transformation in the areas of social security and public services has seen significant progress, leading to the gradual establishment of a digital society and empowered digital citizens. This transformation is particularly evident in sectors such as education and training, healthcare, medical services, social insurance and justice. Recently, the integration of electronic medical records and judicial records into the VNeID platform has been implemented nationwide, further enhancing accessibility and efficiency in these vital areas.

Upgrading Vietnam's digital economy

Prime Minister Chinh said that these achievements are just the beginning. He emphasized the need for strong efforts and consistent actions to effectively implement national digital transformation, urging a focus on key areas and the completion of every task.

To be successful in digital transformation, Vietnam needs to have appropriate, important strategies to execute digital transformation in a rapid, effective, more comprehensive and more innovative manner, he added. National digital transformation must place people and businesses as the nucleus, the subject, the driving force, the resources and the goals of development.

Regarding main tasks and solutions, Prime Minister Chinh said that digital transformation requires stronger, more drastic, quicker and more innovative actions to ensure substantive and effective progress, foster digital economic development and green transformation, reduce emissions associated with scientific and technological development and innovation. It is necessary to promote three strategic digital breakthroughs: Digital institutions, digital infrastructure and digital human resources, with the working principle of “open institutions, smooth infrastructure and smart human resources.” Vietnam should synchronously deploy solutions to accelerate national industrialization and modernization, and develop new high-quality, professional production forces.

In particular, regarding digital institutional breakthroughs, the Prime Minister emphasized the need to finalize the digital legal framework for economic activities, enhance the investment environment, streamline administrative procedures to reduce compliance costs, and implement tax and fee reductions. He also called for decentralization and resource allocation to improve execution capacity and oversight, while advocating for specific mechanisms and support policies for digital transformation for businesses, families and other entities.

Regarding digital infrastructure breakthroughs, he requested the quick commercial rollout of 5G in key cities, increased investment in national telecommunications infrastructure, and diversification of connection methods, including expanding international submarine fiber optic cables and enhancing satellite services. He called for upgrading IoT infrastructure to improve connectivity and data management, creating a clean land fund for large-scale digital industrial centers to attract high-tech, semiconductor and microchip projects, and prioritizing the establishment of the National Data Center No. 1 by the end of 2025.

Regarding training and developing digital human resources, Prime Minister Chinh requested mobilizing state and social resources, people and businesses, synchronously deploying mechanisms, policies and solutions, and prioritizing digital human resource development; effectively implementing the Project “Developing human resources for the semiconductor industry to 2030, with a vision to 2045”, focusing on research and development (R&D) investment; strengthening international cooperation, exchange and learning in digital transformation.

“National digital transformation will change rapidly, sustainably and comprehensively, inclusively, substantially and effectively, contributing significantly to promoting socioeconomic development, creating a prosperous and happy life for the people, building a powerful and prosperous country in the new era, the era of national development,” he stated.

By Phuong Anh, Vietnam Business Forum