By: Dr. Nguyen Minh Thao, Director of the Business Environment and Competitiveness Research Department, CIEM

In 2023, Southeast Asia’s digital economy was estimated to have grown 11% year-on-year, with the travel and transport sectors of the digital economy being expected to exceed pre-pandemic levels by 2024.

With growth, however, comes corresponding challenges. Across the region, governments are wary of unintended consequences of the rapid adoption of digital technologies and the products and services they enable.  As a result, policymakers are recognising the importance of reviewing roles and responsibilities as well as updating laws and regulations.

In partnership with Central Institute for Economic Management (CIEM), the Tech for Good Institute organised a research sharing session on trends in policy innovation, which was followed by an in-depth discussion with government officials, business leaders, academics, and industry representatives  on how Vietnam may foster a responsive regulatory environment to encourage innovation.

Speakers and moderator

Moderators:

• Nguyen Minh Thao, Director of the Business Environment and Competitiveness Research Department, Central Institute for Economic Management
• Ming Tan, Founding Executive Director, Tech for Good Institute

Speakers in roundtable discussion:

• Keith Detros, Programme Manager, Tech for Good Institute
• Vo Xuan Hoai, Deputy Director, National Innovation Centre, MPI
• Nguyen Quang Dong, Director, Institute for Policy Studies and Media Development
• Luu Huong Ly, Head of Civil Law Division, Department of Civil and Economic Law, Ministry of Justice
• Nguyen Nhat Quang, Vice Chairman, Vietnam software and IT services association
• Madam Pham Kieu Oanh, Founder and CEO of Centre for Social Initiatives Promotion
• Tran Tho Dat, Former President of National Economics University (Hanoi)
• Pham Xuan Hoe, General Secretary, Vietnam Financial Leasing Association
• Tran Binh Minh, Deputy Director, Department for Sectoral and Industrial Policy Studies, Central Institute for Economic Management
• Nguyen Vo Hung, Head of the Innovation Policy Department, National Institute for Science and Technology Policy and Strategy Studies, Vietnam Institute of Science Technology and Innovation, MOST
• Nguyen Dinh Cung, Former President, Central Institute for Economic Management
• Nguyen Quoc Viet, Deputy Director, the Viet Nam Institute for Economic and Policy Research
• Ho Cong Hoa, Deputy Director, Department for Social Policy Studies, Central Institute for Economic Management
• Tran Binh Minh, Deputy Director, Department for Sectoral and Industrial Policy Studies, Central Institute for Economic Management

Key takeaways

• Transforming key economic sectors will drive Vietnam’s digital economy growth.

According to Vietnam’s General Statistics Office (GSO), the contribution of Vietnam’s digital economy to GDP averaged 12.62% from 2020 to 2023. The country has set a target of the digital economy contributing at least 20% of GDP by 2025 and 30% by 2030. Yet, there is still no standard definition of the digital economy and a uniform methodology to estimate its contribution. Participants called for clarity on definitions for better evaluation and evidence to inform responsive recommendations. 

While the ICT sector currently accounts for around 70% of the digital economy, the goal for Vietnam is to digitalise key economic sectors so that the core ICT contribution reduces as a relative percentage. If accomplished, this shift will signal that Vietnam is maximising the potential of digital solutions and tech-based business models in sectors such as agriculture and services.

• Technological and business model innovation must be met with policy innovation.

The application of digital solutions has disrupted traditional business models, from transportation to journalism and commerce to finance. At the same time, emergent issues include scams, frauds and misinformation. Addressing these challenges without curtailing innovation requires a balanced risk-based approach.

 With the fintech sandbox in Vietnam in draft stage, the speakers highlighted sandboxes as one of the governance approaches to consider. Pilot mechanisms to test new laws and policies were also discussed, as in the case of Resolution 98/2023/QH15 that grants Ho Chi Minh City special mechanisms and policies for pilots before national rollout.

• Establishing a data market is a key opportunity for Vietnam.

Data is a vital component of any digital economy. Participants noted the importance of data sharing to further grow technology-related sectors.  However, the amount of data exchanged between parties and across borders is still limited. A data market with clearly defined and accountable marketplaces and exchanges can help businesses improve business decision-making and support research, leading to new business opportunities, value creation and socio-economic development.

Together with privacy, data quality and security, governance structures such as regulation, enforcement and transparency are required to build trusted data marketplaces. Initial steps in Vietnam to facilitate data sharing include draft policies on data sharing and data security. Other enablers to developing a healthy data market include data sandboxes, interoperability across borders and open government data to encourage collaboration between the public and private sectors. 

• Collaboration is essential for a vibrant digital ecosystem

Effective collaboration requires a whole-of-society approach, with concerted participation of businesses, technology enterprises, educational institutions, government agencies and civil society.Regulators expressed interest in regulatory learning through cooperation with the private sector and also with neighbouring countries.

Initiatives such as sandboxes require cooperation toward shared goals. The aforementioned fintech sandbox is a first step, which may serve as a precedent for other domains such as for digital assets and energy to accelerate responsible innovation and adoption .

In summary, Vietnam’s digital economy targets reflect the country’s commitment to digital transformation. Responsive regulation is a key enabler to this goal, with strong interest among the government, private sector and civil society to collaborate in order to mitigate the unintended consequences of technology. Maintaining this policy-technology synergy will be crucial as the country transforms its economy through digitalisation.