Vietnam’s digital economy continues to show immense potential. In 2022, the digital economy increased by 28% in gross merchandise value (GMV) compared to the previous year. Led by a booming e-commerce sector, which hit US$14 billion, the country’s GMV is expected to grow 31%, from USD 23 billion in 2022 to USD 49 billion in 2025.
Acknowledging the importance of the digital economy in its development goals, On March 31, 2022, the Vietnameses Prime Minister issued Decision No. 411/QD-TTg approving the National Strategy for Development of Digital Economy and Digital Society by 2025 and orientation towards 2030. The plan aims to drive the country to overcome the status of a low-middle-income country by 2025, become an upper-middle-income country by 2030, and a high-income country by 2045.
To enable economic growth, the Vietnam Government is implementing wide-reaching Industry 4.0 policies to jump start the modernisation of Vietnam’s major industries and grow new ones. There are several digital economy megatrends that were identified as the drivers of Vietnam’s development. This includes emerging digital economies, internationalization, cybersecurity and privacy, modern digital infrastructure, smart cities, rise of digital skills, services and entrepreneurs, and changing consumer behaviors.
With respect to the aforementioned megatrends, this article highlights key national priorities that seek to contribute towards growing Vietnam’s digital economy, including:
- Developing digital infrastructure
- Ensuring privacy and cybersecurity
- Enabling a digital workforce
- Promoting digital payments and e-commerce
This article also highlights opportunities where Digital Economy Companies (DECs) with operations in the country are best positioned to support and deliver shared outcomes.
Priority 1: Developing Digital Infrastructure
Comprehensive infrastructure development has been highlighted as one of the strategic goals as stated in Vietnam’s 2021-2030 Socio-Economic Development Plan. In addition to building up traditional infrastructure such as transportation and manufacturing, Vietnam is also focused on strengthening its digital infrastructure – a key priority under the National Digital Transformation Programme. The ability to offer all citizens high-speed internet connection at a low cost is a priority of national significance. Major cities like Hanoi, Ho Chi Minh City, and Danang have been prioritized to deploy 5G due to their larger need for high-speed services and denser populations. For example, Viettel, MobiFone, and VNPT have been trialing 5G services with their users since November 2020.
Where DECs can play a role
DECs can actively partner with the government through public-private partnerships to improve the physical and digital infrastructure in Vietnam. Since DECs are already involved in a wide array of economic activities, they can support the government’s infrastructure programs in various sectors such as transportation, smart energy grids, and health. Furthermore, core DECs can work with the government to deliver fast, accessible and affordable connectivity throughout the country, especially in rural areas. As for urban areas, there is great opportunity for DECs to offer their digital solutions as Vietnam transforms their metro cities into smart cities.
Priority 2: Ensuring Data Privacy and Cybersecurity
On August 10, 2022, the Vietnamese Prime Minister issued Decision No 964/QD-TTg approving the National Cybersecurity and Safety Strategy, proactively responding to challenges from cyberspace to 2025. vision 2030. The cybersecurity strategy aims to protect the national cyber infrastructure and focus on protecting information systems. The strategy’s goals include developing cybersecurity policies and laws, improving cybersecurity capacity, and regulating the collection, storage, and processing of personal data.
Under the strategy, one of the main targets is to maintain or increase Vietnam’s ranking on the global cybersecurity index (GCI). In addition, incident response teams of 11 priority sectors for network information security will be formed. The key areas include transport, energy, natural resources and environment, information, health, finance, banking, defense, security, social order and safety, urban areas, and the government’s direction and administration.
In line with the cybersecurity strategy, the Law on Cybersecurity, Decree No. 53/2022/ND-CP (“Decree 53/2022”) was issued by the Vietnamese Government on 15 August 2022, and became fully effective on 1 October 2022. The decree included guidelines for information systems that are critical for national security, combating illegal online activities and provisions on data localisation.
Where DECs can play a role
DECs can help advance this priority by protecting consumer data, respecting consumer privacy and adhering to national standards in cybersecurity. There is also an opportunity for DECs to support the efforts of the government in increasing cybersecurity capacity. For example, DECs can work with the government in forming the incident response teams for the priority sectors. Mature DECs can conduct knowledge-sharing sessions and share best practices to the incident response teams. DECs, especially those with cybersecurity solutions and privacy-enhancing technologies, can also support the government to improve its processes and capabilities. This is a step towards Vietnam’s goal of improving its global ranking in cybersecurity.
Priority 3: Enabling a Digital Workforce
Vietnam also recognises the importance of having a digitally literate population to continue its digital economy growth. There are several policies the government has implemented to develop the digital workforce:
- Decision No. 749/QĐ-TTg (03/06/2022) to open MOOCs for companies and citizens to receive affordable and accessible digital training. It also aims to select, educate, and train a group of at least 1,000 experts on digital transformation for different sectors and local authorities. These experts will continue training other officials and employees in their organizations to facilitate the national journey to digital transformation;
- Resolution No. 52-NQ/TW (27/9/2019), Decision No. 392/QĐ-TTg (27/3/2015), Resolution No. 23-NQ/TW (22/3/2018), Decision No. 99/QĐ-TTg (14/01/2014), and Decision No. 21/QĐ-TTg (06/01/2021) to set digital training for workforce as one of the main strategies for Vietnam to actively participate in the Industrial Revolution 4.0 and develop its digital economy;
- Resolution No. 36-NQ/TW (1/7/2014) to prioritize funding for digital training programs for workers in the digital sector and to modify welfare policies for officials and workers in the sector of technology and information for better attraction and retention rates;
- Resolution No. 26/NQ-CP (15/4/2015) and Resolution No. 36-NQ/TW (01/07/2014) to develop a strong digital workforce to meet the requirement for sustainable growth and international integration. These policies also aim to provide welfare benefits to official in the IT department of the government;
- Resolution No. 41/NQ-CP (26/5/2016) to reduce 50% personal income tax for individuals at high-tech roles in the Information and Technology industry; and
- Directive No. 16/CT-TTg (04/5/2017) to improve training and education in science, technology, STEM, and information technology in the national curriculum, to improved vocational training in information technology.
DECs can play a role
DECs can support the government in reskilling and upskilling the population by conducting digital literacy campaigns and information-sharing activities. DECs can also work with the academic sector to come up with up-to-date ICT curricula to equip the new entrants to the workforce with digital skills. There is also an opportunity for DECs to sponsor training, scholarships and opportunities where students can gain real-world experience in the ICT field.
Some DECs also have the unique opportunity to upskill or reskill stakeholders in their respective sectors. For example, platform companies can offer certification training and skills development to merchants and workers that are currently on their platforms.
Priority 4: Promoting Digital Payments and E-Commerce
The government has approved and implemented Decision No. 1813 (1813/QD-TTg) on 28 October 2021 to encourage cashless payments in Vietnam from 2021 to 2025. Vietnam targets that by 2025, the volume of mobile payment transactions will grow by 50-80% while transaction value will surge by 80%-100% annually. It also aims for at least 80% of the population aged 15 and above to have bank accounts, the number of Internet payments to increase by 35%-40% annually, and the rate of individuals and organizations using cashless payments to reach 40%.
The plan has four major objectives:
- to make non-cash payments a norm in urban areas and expand their coverage in rural areas;
- to develop a safe non-cash payment infrastructure with various conveniences and facilities to meet the rising demand of firms and individuals;
- to enhance the security and transparency of cashless payments, allowing authorities to better monitor economic transactions in the country; and
- to realize growth targets set for non-cash payments in the short term, including 50% of transactions on e-commerce platforms being conducted through cashless payment methods.
Where DECs can play a role
DECs are well-placed to promote digital payments and e-commerce in the country. DECs can encourage consumers to adopt cashless payments and electronic transactions as more users avail of digital products and services. To encourage more participation, digital payment service providers can also partner with the government to increase the financial literacy of consumers. On the supply side, DECs can also accelerate the adoption of e-commerce for MSMEs. Platform companies, for example, can offer solutions and services that would allow MSMEs to transition online. Finally, the expansion of DECs to rural areas can help accelerate the digital transformation and adoption of digital payment services in underserved areas.
This article is part of a series which covers national-level priorities of SEA-6 economies for digital economy development. As part of the “Tech for Good” study, the Tech For Good Institute also conducted roundtable discussions with policymakers, regulators, industry, and the academia in SEA-6. Summary and key recommendations of Vietnam’s roundtable discussions can be found here.
Footnotes:
[1] Southeast Asia-6 markets refers to the six biggest economies in the region, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam
