Government, firms are key to create breakthroughs in Vietnam digital economy

A strong push for digital transformation in both the government and enterprises would help create breakthroughs in the development of Vietnam’s digital economy, according to a new report from the Central Institute for Economic Management (CIEM).

The Vietnamese government is focusing on creating a legal framework to promote digital transformation.

The digital economy should also ensure its inclusivity to remote areas and vulnerable groups, including women or the poor, added the report with title ”The development of Vietnam’s digital economy in the post-Covid-19 period”.

In a recent study from Google, Temasek and Bain, the Covid-19 pandemic has served as an accelerator for Vietnam’s digital economy to expand by 16% this year to US$14 billion, which is set to further grow to US$52 billion by 2025.

Before the Covid-19 outbreak, Vietnamese users were estimated to spend around 3.1 hours per day for surfing in the internet. The figure spiked to 4.2 hours at the height of national social distancing, and now rests at 3.5 hours per day.

The study also revealed e-commerce is fast becoming a major contributor in the digital economy, which is set to grow 63% year-on-year in 2020 to US$62 billion and US$172 billion by 2025.

As new Industry 4.0 technologies are expected to bring tremendous benefits to the production process, many countries have given priority to the development of digital economy as a strategy for future growth. During the Covid-19 pandemic, such interest for new technologies has only grown further, and Vietnam is no exception to that trend.

Notably, the Vietnamese government is focusing on creating a legal framework to promote digital transformation that is based on international practices. In this framework, enterprises would stay at the center of the process, while the government is responsible for creating the required conditions to promote digital economy.

CIEM Director Nguyen Thi Hong Minh suggested in the future, while it is essential to ensure a safe cyberspace, the government should ensure the improvement of a legal environment for the digital economy, including tax policies for enterprises operating on a digital platform; the enhancement of the intellectual property rights protection as part of Vietnam’s commitments to a number of next-generation free trade agreements such as the CPTPP and EVFTA; the revision of existing regulations related to labor market and social welfare to adapt to changes in a digital economy.