Preparing local enterprises for digital transformation

December 08, 2021 | 10:00
In order to initiate an evidence-based debate about the future impacts of digital transformation, the World Economic Forum (WEF) has conducted a comprehensive quantitative analysis of the value to be at stake of 11 key industries.
Preparing local enterprises for digital transformation
Hang Sam Nang - CEO, Supersoft Technology

In order to initiate an evidence-based debate about the future impacts of digital transformation, the World Economic Forum (WEF) has conducted a comprehensive quantitative analysis of the value to be at stake of 11 key industries. The analysis highlights three socioeconomic shifts derived from digital transformation, including employment and skills. Global job losses due to digitalisation are now estimated to vary between two million and two billion, including worries about the impact on wages and working conditions by 2030.

Environmental sustainability will also be impacted. Historical trends forecast that for every 1 per cent increase in global GDP, CO2 emissions and the use of resources will increase by roughly 0.5 and 0.4 per cent, respectively. By 2030, existing business practices will contribute to a global gap of eight billion tonnes between supply and demand of natural resources, resulting in a $4.5 trillion loss in economic growth.

Moreover, social media, radio-frequency identification tags, and user-generated sites like TripAdvisor are tools to help boost transparency and reduce information asymmetry. However, according to the Edelman Trust Barometer, trust in all technology-based sectors declined in 2015, with primary concerns about privacy, ethical issues in web data mining and data security.

Despite these complex challenges, digital transformation could bring valuable contributions. Up to six million global jobs could be created between 2016 and 2025 in logistics and power sectors. In other sectors, automation will displace plenty of manual work. For both winners and losers of digital transformation, the key to success is contingent upon their adaptability in up-skilling employees and developing the next generation of talent in the machine era.

In addition, digital initiatives across sectors examined by the WEF could reduce an estimated 26 billion tonnes of net CO2 emissions between 2016 and 2025, roughly equivalent to the emissions of Europe during the same period. Ensuring the recognition and expansion of this potential value means overcoming barriers in the adoption of new business models, customer acceptance and environmental impact of digital technology.

By 2025, successful digital transformation for the public sector and businesses as per specific goals will be an advancement in science and technology integration as well as economic integration.

In 2019, Decision No.52-NQ/TW set specific targets by 2025 to keep a spot in the top three ASEAN countries in the Global Innovation Index (GII) rankings; to build digital infrastructure facilities up to the advanced standards of ASEAN with internet broadband covering all communes and the digital economy accounting for 20 per cent of GDP; and labour productivity to increase by over 7 per cent per annum on average

The decision also noted guidelines to complete digital transformation in the Party and state agencies, Vietnam Fatherland Front committees, and socio-political institutions; to become one of the four leading ASEAN countries in the United Nations’ e-government index ranking; and to have at least three smart urban areas in all three key economic regions of the country.

Specific targets through 2030 are to keep a spot in the top 40 countries in the world in GII rankings; to ensure that the 5G mobile network will cover nationwide and all people can access broadband Internet services at low cost; for the digital economy to account for 30 per cent of GDP; for labour productivity to increase by 7.5 per cent per annum on average; and to complete the formulation of an e-government

By 2045, Vietnam will become one of the leading centres of manufacturing, smart services, startups, and innovation in Asia, which has high labour productivity and is capable of mastering and applying modern technologies to all fields of the socioeconomy, the environment, national defence, and security.

Vietnam has an open economy that is increasingly integrated with global economic and sci-tech flows. Currently, the country has participated in various new-generation free trade agreements, along with agreements on standardisation and recognition, quality, and compliance.

The fierce competition between Vietnam and members of the agreements pushes Vietnamese enterprises to compete against domestic and foreign players. Apart from domestic exports and consumer goods, traditional industries such as agriculture and transport are also facing competition from tech-savvy foreign firms like Amazon, Facebook, Grab, and more. Customer service must be more responsive and precise while also lowering costs based on connectivity and sharing economy platforms, and Vietnamese firms cannot afford to ignore this trend.

Vietnamese enterprises expecting to be a part of the global supply and value chains must take into account the future technological transformation and be prepared for the management and operation of digital platforms. Furthermore, they must be one step ahead or risk losing the whole market to strong competitors.

According to leading digital transformation consultancy experts of the National University of Singapore, the business’s size, sector, and goals will determine the process of digital transformation. Along the process, businesses frequently confront several obstacles. Employees must embrace the application of digital advancements and be poised to pay for and invest in an efficient and appropriate IT infrastructure.

This will underpin digital transformation, and the bulk of the population must be prepared to use smart devices for consumer connectivity. Vietnam has the edge over other countries in the region in this regard, thanks to the rapid growth of the internet, mobile phones, and other forms of communication.

In June 2020, the prime minister issued Decision No.749/QD-TTg on approving the programme on Supporting Enterprises' Digital Transformation in the period 2021-2025, with an orientation towards 2030. In tandem, the Ministry of Planning and Investment has coordinated with the United States Agency for International Development through the LinkSME Project (USAID LinkSME) to implement the programme on Supporting Enterprises' Digital Transformation in the period 2021-2025.

The programme includes several goals to reach by 2025, and this includes the target that 100 per cent of businesses will foster digital awareness. At least 100,000 enterprises will receive support from the programme, including the use of a self-assessment tool to determine their preparedness for digital transformation, training, advising, and connecting solutions.

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