Preparing nation for the digital era

The government’s efforts to embrace Industry 4.0 promise to be a win-win situation for all, photo Le Toan

According to the European Chamber of Commerce in Vietnam (EuroCham), in order to become even more productive and competitive within the region, the government should accelerate digitalisation of Vietnam’s economy, and further adopt ICT applications in production as well as in other industries.

“To start with 4.0 adoption, the government can work together with industries to start implementation with scalable solutions like operations management, predictive maintenance, inventory optimisation, energy efficiency, and traceability,” said EuroCham Vietnam’s vice chairman Tomaso Andreatta. “4G and 5G Internet of Things (IoT) network infrastructure will ensure that smart cities are sustainable, innovative, secure, and safe.”

Andreatta also said that the government should continue to roll out positive initiatives such as e-government, digital economy, and digital society, streamlining and modernising administrative processes for businesses and citizens.

The government has just sent a special report to the National Assembly on revising legal documents in favour of the business community and the national drive towards an e-government and e-economy.

Currently, Vietnam is boosting a legal framework for the operation of an e-government, heading towards development of a digital government as featured in the Law on E-Transactions 2005 and the Law on IT 2006, in addition to many related legal documents, according to the government.

“However, to formulate a perfect legal framework for the e-government and digital government, there needs to be research and promulgation of the Law on Digital Government,” stated Le Thanh Long, Minister of Justice. “It is now urgent for us to boost the development of the IT and digital sector. To this end, we need a framework for this, including the Law on Digital Technology Industry.”

Many nations already boast similar laws, with South Korea’s Law on E-government being one of the first of its type worldwide, coming into existence in 2001 and revised in 2010. The US followed in 2002 with a law deemed to still be working successfully.

In fact, the Vietnamese Politburo in September 2019 issued Resolution No.52-NQ/TW on a number of guidelines and policies to actively participate in Industry 4.0. The resolution ordered the government to lead the construction and implementation of the National Strategy on Industry 4.0, and other schemes on national digital transformation and participation in Industry 4.0.

The strategy will help Vietnam improve its competitiveness, attract more high-quality foreign direct investment, and ensure sustainable growth, according to the Ministry of Planning and Investment (MPI) which is drafting the strategy.

Under the latest draft, the sectors that will be improved with high technologies include public administration, electricity and water, healthcare, education, processing and manufacturing (especially footwear, textiles and garments, and foodstuffs), agriculture, logistics, commerce, ICT, and finance and banking. The technologies that will be prioritised for development include 5G and post-5G, AI, blockchain, cloud computing, and IoT.

In order to develop these sectors and technologies, the government, besides continuing administrative reforms, will beef up revising laws and regulations – especially those regarding venture capital and angel investments, with maximum favourable conditions to be created for investors to conduct mergers and acquisitions, capital contributions, and apply high technologies.

“There will be special incentives for investment projects that create products and services using Industry 4.0 technologies, especially joint ventures with domestic firms,” stated the draft strategy.

Jeff Paine, managing director of the Asia Internet Coalition, told VIR the strategy “will secure Vietnam’s strong competitive regional position in coming decades. According to the Vietnamese Central Institute for Economic Management, which examined the impact of the draft strategy, Industry 4.0 transformation will likely raise Vietnam’s GDP by $28.5 billion to $62.1 billion, equivalent to a rise of 7-16 per cent, from now to 2030.”

According to Paine, leading global technology companies have traditionally chosen Vietnam as a place to build major manufacturing facilities that supply equipment and products to the world, creating more jobs and developing human capital.

“Today, we are seeing a shift higher up the technology value chain, to software development and digital application-based services. These foreign investments are critical to Vietnam, especially for transfer of knowledge and international best practices, which will support the development of a local ICT industry that is globally competitive,” Paine said.