By Dr. Nguyen Minh Thao, Former Head of the Business Environment and Competitiveness Research Department, Vietnam’s Central Institute for Economic Management (CIEM) and Dr. Nguyen Quoc Viet, expert in Public Policy at University of Economics and Business, Vietnam National University (VNU).
Technology and digital transformation are not only an inevitable trend but also an urgent requirement to enhance national competitiveness and narrow Vietnam’s development gap with both the region and the world. To achieve rapid and sustainable economic growth, Vietnam has recognised science, technology, and digital transformation as key drivers. Therefore, it is crucial to assess the outcomes of digital economic development, address existing challenges, and explore solutions for effective tech governance, all of which are essential for laying a strong foundation to meet high growth targets.
At the start of 2025, the National Assembly of Vietnam revised its GDP growth target, aiming for at least 8% in 2025, with double-digit growth expected from 2026 to 2030. Vietnam has highlighted that science and technology are the “golden key” to overcoming the middle-income trap and mitigating the risks of falling behind economically.
Previously under Decision No. 411/QD-TTg, the government set key targets for 2025. This includes the digital economy contributing 20% of GDP and e-commerce accounting for over 10% of total retail revenue. According to the National Committee for Digital Transformation’s Action Plan, Vietnam aims to develop 48,000 digital technology enterprises nationwide.
In recent years, the digital economy has made a significant impact on Vietnam’s GDP. By 2024, the digital economy was estimated to contribute 18.3% of GDP, growing at over 20% annually. This is three times the pace of overall GDP growth, cementing Vietnam as the fastest-growing digital economy in Southeast Asia. The country ranks among the top 10 globally in e-commerce growth, with a yearly increase of approximately 20%. In cybersecurity, Vietnam now ranks 17th out of 194 countries (up eight positions), securing its place in Tier 1. Furthermore, Vietnam’s E-Government Development index surged by 15 spots in 2022, reaching 71st out of 193 countries, marking its first classification in the “Very High” group. Vietnam’s digital startup ecosystem is also expanding rapidly, with over 74,000 technology enterprises, exceeding government targets, and nearly 1,900 firms tapping into international markets.
Legal frameworks supporting digital economic development are being strengthened to overcome bottlenecks and close regulatory gaps, driving new momentum for growth. Efforts are underway to amend and update laws governing emerging industries and business models, such as e-commerce, digital finance, and digital banking, while simultaneously enhancing regulations to attract investment in digital technologies. Recent legal advancements such as the amended Telecommunications Law, the Data Law, the National Data Strategy for 2030, and the Semiconductor Industry Development Strategy have laid a robust regulatory foundation that fosters growth in tech and data-driven products and services.
Challenges and Barriers to Digital Transformation
Despite notable progress in Vietnam’s tech landscape, several challenges persist in the governance of technology.
- Slow transformation in state management: Policy responses have not been timely or agile enough to keep pace with the rapid evolution of technology. As a result, the government’s approach often lags behind technological advancements.
- Inadequate and inconsistent tech regulations: This leads to a heavy compliance burden on businesses. Many regulations fail to reflect the reality of today’s fast-changing technological environment, and there is a noticeable gap in the legal frameworks needed to support emerging digital business models.
- Limited investment in digital infrastructure: According to the Ministry of Finance (MoF), 70% of the state budget is allocated to regular expenditures, such as salaries for government employees, while in developed countries, this figure is only around 48-50%. As a result, only 30% of the budget is available for development investments, including those in digital infrastructure. This resource constraint is further exacerbated by Vietnam’s large, inefficient state apparatus, burdened by bureaucratic layers that slow down decision-making and implementation.
- Low readiness for digital transformation: Across government agencies and businesses, there is a lack of preparedness and capacity to effectively adopt and implement digital transformation strategies, limiting progress in this area.
- Technological capabilities of domestic enterprises remain underdeveloped: Vietnamese companies have yet to deeply integrate into global value chains, hindering their competitiveness and growth in the digital age.
- High-tech crimes become more sophisticated: Cybersecurity and information safety pose significant challenges. These evolving threats require urgent attention and a stronger regulatory framework to protect both businesses and individuals in the digital ecosystem.
Opportunities and Policy Recommendations
To drive breakthroughs in technology development, innovation and digital transformation, the Politburo of Vietnam issued Resolution No. 57-NQ/TW on December 22, 2024, setting ambitious goals for the country’s digital future. The resolution outlines the following key objectives:
- Digital Economy Growth: By 2030, the digital economy is expected to contribute at least 30% of Vietnam’s GDP, with the aim to increase this to 50% by 2045.
- Digital Technology Hub: Vietnam aspires to become a regional and global hub for digital technology, positioning itself at the forefront of technological advancements and attracting international collaboration.
- Top 30 for Innovation: The resolution sets a goal for Vietnam to rank among the top 30 economies worldwide in terms of innovation and digital transformation, highlighting the importance of fostering a culture of technological progress and adapting to the global digital landscape.
To achieve these ambitious targets, Resolution No. 57 adopts a goal-oriented management approach that encourages flexibility and autonomy. It grants stakeholders the responsibility and freedom to make decisions and take risks while ensuring that outcomes are evaluated based on overall effectiveness. Additionally, the resolution recognises digital technology enterprises as pioneers, acknowledging their crucial role in driving economic and social development.
Resolution No. 57 is expected to significantly boost Vietnam’s economic growth, with ambitions of reaching double-digit growth in the coming years. In response to this ambitious goal, the government has issued Resolution No. 03/NQ-CP, which outlines an action plan for achieving the targets. Additionally, the National Assembly passed Resolution No. 193/2025/QH15, which focuses on piloting special policies for science, technology, and digital transformation. To further support these efforts, the government has also established the Government Steering Committee for Science, Technology, Innovation, and Digital Transformation, providing a coordinated effort to drive the country’s digital agenda.
In terms of legal reforms, significant steps are being taken to create a robust legal environment for innovation and technology development. The National Assembly will review the Law on Science, Technology, and Innovation, and approve the Law on Digital Technology Industry in May 2025. This will lay the groundwork for creating a legal framework that supports the digital economy. Simultaneously, the government will propose tax amendments to encourage businesses to invest in science, technology, and digital transformation, and to attract skilled individuals to work in these fields.
Furthermore, the Ministry of Industry and Trade (MoIT) is proposing a new E-Commerce Law to promote a sustainable digital economy, which will help streamline e-commerce operations and facilitate digital business growth.
Vietnam is also undergoing a significant transformation in its state administrative apparatus, which is expected to increase efficiency and provide a stronger foundation for development. The government has streamlined its organisational structure by reducing five ministries and agencies, alongside efforts to downsize government employees. This reform is not only about reducing numbers but also about improving the quality of personnel, which will contribute to more effective governance. These changes are aimed at enhancing the quality of regulations and policies, while addressing bottlenecks caused by multi-layered bureaucratic management.
The transformation towards a digital economy is a proactive step in shaping Vietnam’s future. Establishing a progressive legal framework is critical for clearing regulatory bottlenecks, promoting innovation, and empowering digital businesses to thrive. Vietnam needs to establish a legal framework that allows for flexible application and pilot implementation to address emerging practical issues and technological developments.
Given the rapid pace of technological advancement, Vietnam must be ready to adjust policies in a timely manner to remain competitive. This requires not only regulatory agility but also special policies to attract investment in strategic technologies. By fostering an environment that encourages innovation and technological advancement, Vietnam can lay a strong foundation for its digital economy, enhancing its position in the global technology landscape.
About the writers
Dr. Nguyen Minh Thao is former Head of the Business Environment and Competitiveness Research Department, at the Central Institute for Economic Management (CIEM), Vietnam. She is an expert in business environment and digitalisation. She is also the key drafter of Vietnam’s National Strategy for Fourth Industrial Revolution by 2030.
Dr. Nguyen Quoc Viet is the former Vice Director of the Vietnam Institute for Economic and Policy Research (VEPR), University of Economics and Business, Vietnam National University (VNU). He is an expert in public policy.
