The digital economy will create more and more wealth

A view of Ho Chi Minh City. Photo: VNA/CVN

The southern megacity has great potential to develop the digital economy as it has the largest number of smartphone and internet users in the country. In addition, it also has a fairly good telecommunications and information technology infrastructure. The trend towards digitization affects most of its sectors: trade of course, but also transport, education, health… Technological applications serving people’s lives in many areas are developing rapidly.

In 2021, due to the impact of the COVID-19 pandemic, many traditional service sectors experienced reduced growth, while the science and technology industry showed a growth rate of 3.8% and the information and communication industry grew by 6. .08% compared to the same period of the previous year.

While the pandemic has generally negatively impacted the socio-economic life of the population, it has also boosted e-commerce, distance learning, online work and digital transformation in general.Lâm Dinh Thang, director of the municipal information and communication service, inquired.

According to information from the Ho Chi Minh City Development Research Institute (HIDS), in 2021 the city’s digital economy accounted for 14.41% of the regional gross domestic product (GDP), or nearly VND 192 billion (equivalent to about 8. USD 3 billion).

With the national economy gradually recovering, Ho Chi Minh City aims not only to become a smart city, but also to become a center of the country’s digital economy. It has set itself the target that the latter represents 15% of its GDPR this year, 25% by 2025 and 40% by 2030. It prioritises the digitization of ten sectors: health, education, transport, financial banking, tourism, agriculture, logistics, environment, energy and human resources.

E-commerce has been booming in Vietnam lately, especially in Ho Chi Minh City. Photo: VNA/CVN

To achieve these goals, the city is focusing on forming a financial technology (Fintech) hub and digital transformation sandbox, as well as creating a Digital Transformation Support Center (DXCenter). These structures will help improve supply chains, technology transfer and innovations and foster an innovation ecosystem for start-ups.

Support companies

Fostering digital transformation is one of the new growth engines for Ho Chi Minh City after the pandemic, experts say. According to them, the city should have a policy to support companies in this process. However, these supportive policies must stem from the practical needs of enterprises, infrastructure companies, service providers, digital technology or digital content services.

The city will strengthen the interaction between government agencies and businesses to help them accelerate digital transformation and its implementation“, said Lâm Dinh Thang, director of the municipal information and communication department. And to add that the city will continue to develop political mechanisms and publish legal frameworks to support companies. Among the recommendations of experts we find the creation of databases that will contain information about companies, land and other aspects.

Pham Binh An, deputy director of the Municipal Institute of Development Studies, said the city should facilitate digital and e-commerce business activities and strengthen ties between e-commerce companies and manufacturers.

Long term investments

Dô Phuoc Tông, director of Duy Khanh Mechanical Engineering Company, shared that digital transformation is a lengthy and expensive affair, meaning it will take years to pay for itself.

The cost of digital transformation should be viewed as a long-term investment that can only be amortized over 10 or even 20 years, rather than production costs that should be included in the price of the product. Companies need to be patient and persistenthe advised. He said it took his company five years to complete the transformation and digitize all data, which today translates into increased productivity, better strategic planning and increased income.

A manufacturing plant in the Tân Thuân Free Zone of Ho Chi Minh City. Photo: VNA/CVN

He advised the city to include digital transformation in its investment incentive program to support businesses. Economist Nguyên Thi Canh stressed that governments, at the national and local levels, should develop an appropriate legal framework for the development of the digital economy. According to her, the four main pillars of a digital economy are “institutions, human resources, technology and infrastructure

However, according to him, Ho Chi Minh City still lacks policy mechanisms to support companies in digital transformation when resuming production. According to her, the quality of the workforce for the effective execution of this digitization process remains weak, which could extend the time needed for this transformation.

Deputy Prime Minister Le Minh Khai called on Ho Chi Minh City to continue to improve the business environment and help enterprises achieve digital transformation to develop a digital economy. He added that the city should strengthen international cooperation on digital transformation and learn from the experiences of other countries. He also pointed out the importance of cybersecurity in the context of digital transformation.

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