A digital mindset for digital economy management

Dang Quang Vinh

Due to the lack of an appropriate regulatory system, many Vietnamese startups have established firms abroad. Will the National Strategy for Industry 4.0 be in a position to tackle the situation?

The strategy’s prime target is to remove legal barriers in order to avoid not only Vietnamese people having to go abroad to realise their fresh business ideas, but also to attract new products, services, and technologies to Vietnam.

In essence, Industry 4.0 will bring about inclusive changes in the production methods (smarter, optimising the use of resources, and greener), in market structures (from two sides of buyers and sellers to multi-sided like Uber and Airbnb), and create a virtual market to replace the physical market, making a physical presence no longer necessary. The way of consumption is also trending towards omitting intermediate links.

Thereby, the rights and obligations of involved parties need to change as well. Old-fashioned management styles will no longer be appropriate, as new, more effective management tools have appeared – including e-government, blockchain, and AI technology.

Considering all this, it would prove hard for us to retain innovative ideas in Vietnam if we force ride-hailing cars to carry identity signs to look like traditional taxis and manage them in the way we work with traditional taxis.

What barriers have kept Vietnamese startups from choosing Vietnam as the right birth place?

Most apparent are regulations on monetary management and capital mobilisation methods. It will be hard for new business models to prosper if payment by digital currency is considered illegal.

Some might argue that traditional capital raising methods such as stake acquisitions or capital contributions are fine, but these methods have themselves created some barriers to investment funds.

To appeal to these investment funds, you need not only innovative business ideas with good potential to generate profits, but also convenient investment procedures and ways to transfer their profits abroad.

Our investment climate appears to lack the needed flexibility to attract big investment funds. In other words, we do not yet have the perfect institutions for the startup ecosystem or e-commerce to reach full swing in development.

What is needed to complete a relevant regulatory system?

A digital mindset is of foremost importance. It is crucial to apply technologies for the management of services which were developed based on tech platforms.

For instance, putting ride-hailing apps like Uber and Grab under control is causing managers headaches. Technologies allow the positioning of the cars as well as control their itineraries, so it is important to use suitable management technologies to effectively manage the service.

In the US, when ride-hailing cars like Ubers enter airports, they must pay the same fees as traditional taxis. To collect fees from these cars, the government has worked with Uber to build a technology that recognises the identity of these cars when they enter airports and automatically collects the fees, but does not require these cars to carry identity signs.

In parallel to changes to technologies and user demands, changes are also required in respect to state management in order to match development requirements. People and businesses wish to follow an easy regulatory environment that is adequate for modern development trends. In offering this, not only do we reach state management targets, we do it without affecting people’s capacity and requirements for innovation.