Digital transformation accompanying SMEs for viability and growth

Deputy Minister of Planning and Investment Tran Duy Dong

Tran Duy Dong, Deputy Minister of Planning and Investment highlighted digital transformation as the key to national competitive advantages. For that reason, the MPI has introduced many favourable policies to encourage the process among small- and medium-sized enterprises (SME).

"The ministry has launched the Digital Transformation Support Programme for Enterprises between 2021 and 2025 to make all enterprises aware of digital transformation," Dong said at the forum.

Vietnam is considered one of the countries with a good digital economy development rate in the ASEAN region. Vietnam's digital economy reached $21 billion in 2021, up 31 per cent on-year, contributing more than 5 per cent to the country's GDP.

Currently, Vietnam has about 900,000 enterprises operating with more than 97 per cent of private enterprises at small and medium scale, playing an important role in the socioeconomic development of the country.

Digital transformation in the business community has taken place strongly lately as a natural need to respond to changes in customer consumption behaviour and management needs. Digital transformation helps businesses increase revenue, reduce costs, improve governance capacity, and develop more stably and sustainably.

However, the deputy minister also highlighted several obstacles facing enterprises on their digital path. Specifically, about 60 per cent of enterprises mention high transformation costs as a major obstacle to the process, whereas 52.3 per cent point to an inadequate labour force.

Without digital platforms in place, Vietnam will not be able to step-up digital transformation in SMEs, according to Nguyen Huy Dung, Deputy Minister of Information and Communications (MIC). He asserted that digital platforms must make technologies accessible to SMEs as basic utilities to the public.

Once the platforms are used, digital technologies can be easily distributed to SMEs on a pay-as-you-use basis without the need for advanced technological systems established in the enterprises.

"The Ministry of Information and Communications has been assisting SMEs in digital transformation recently using digital platforms," Dung said.

He also revealed that over 500,000 SMEs have begun to take an interest in digital platforms, and 70,000 SMEs have used them. In addition, many platform users have been met successfully.

Introducing the policy to support businesses in digital transformation, Bui Thu Thuy, deputy director of the MPI’s Agency for Enterprise Development said that after nearly two years of implementation, the programme supporting SMEs for digital transformation with the United States Agency for International Development (USAID) has carried out many activities.

“We have conducted one-to-one in-depth consultations for more than 100 businesses to solve specific digital transformation problems, successfully supported digital transformation and training for about 6,500 enterprises in 15 cities and provinces, and advanced training for the workforce in 13 cities and provinces on innovation and digital skills,” Thuy said.

Tran Minh Tuan, director of the Digital Economy and Digital Society Department under the MIC, highlighted several reasons behind enterprises embracing digital transformation. He said the enterprises go digital mostly to improve competition, access new markets, produce new products, and enhance efficiency.

Regarding digitalisation challenges, 75 per cent of SMEs said they are still determining whether digital transformation would bring benefits, 60 per cent said they lack the information and skills to follow the trend, and approximately 50 per cent said they need more adequate finances to go digital.

Ruici Tio, policy programmes manager at Meta, said Vietnam has the highest adoption of business messaging among countries surveyed by the corporation, with 73 per cent of Vietnamese consumers adopting such means of communication.

Post-pandemic, almost two-fifth of Vietnamese consumers chat with enterprises more frequently. Specifically, at least one in three consumers do so once a week, and business messaging is prevalent across all age groups. "Business messaging has transformed business and has multiple applications across industries," said Tio.

Innovating to ease burdens of crisis Vietnam has made tremendous progress in innovation, science, and technology. According to the 2021 WIPO Global Innovation Index, Vietnam leads the group of lower middle-income countries, ranking 44 out of 132 countries with more than 18,500 scientific and technological discoveries.

Vietnam Innovation Challenge 2022 Vietnam Innovation Challenge 2022 – themed innovation and digital transformation solutions for the business community – will contribute to attracting investment in Vietnam in a sustainable way, creating favourable conditions for small- and medium-sized enterprises (SMEs) to join the value chain.