06.03.2021, 12:06

Digital transformation and the digital economy

The fourth industrial revolution, digital transformation and the digital economy are mentioned many times in documents of the 13th Party Congress. 

VietNamNet would like to introduce the speech delivered by Minister of Information and Communications Nguyen Manh Hung at the congress.


Digital transformation and the digital economy

Minister of Information and Communications Nguyen Manh Hung. Photo: Pham Hai


The desire to develop a prosperous and happy country and the desire for a mighty Vietnam have been aroused. The flag has been raised to gather all of Vietnamese people. The way to the target has been shown, which is science and technology, innovation, the 4th industrial revolution, digital transformation, and digital economy. The decisive factor for success is Party building and reorganization tasks so that people always believe in the Party's leadership.

Digital technology, digital transformation, digital economy, and digital age are a process occurring over decades. It is a global trend, an irreversible process. The physical world is being digitized. Real life is being brought into cyberspace. The process of creation, production and business is taking place more and more in cyberspace. With the emergence of the 4.0 industrial revolution, with the push of the world Covid-19 pandemic, the world is at the breakthrough point in the digital transformation process. This is an opportunity for Vietnam to realize its aspirations for building a mighty and prosperous country.

Digital economy includes economic activities that use digital information and digital knowledge as the main production factor. It uses the Internet and information networks as space for operation; and uses ICT, i.e. electronics, telecommunications and information technology, to increase labor productivity and to optimize the economy. Simply, the economy is related to digital technology.

In a narrow sense, the digital economy is only related to the ICT sector. In a broad sense, these are areas that are close to digital technology, such as e-commerce, the FUNDAMENTAL economy, and sharing economy. In the broadest sense are all of the domains where digital technology is used.

The digital economy is a long evolutionary process. It is the process of digital transformation on the national level. At different levels, every field, every business, every individual can use digital technology to better do their jobs, or even make breakthroughs to change the quality of their work.

Digital economy helps increase labor productivity, helps economic growth. Digital economy also helps sustainable growth, inclusive growth, because it uses knowledge rather than resources. The lower cost of participation in the digital economy creates business opportunities for more people; digital technology is borderless, thus reducing the rural-urban gap. Digital technology also gives us new approaches, new solutions to effectively solve human long-standing problems, such as environmental pollution, the widening gap between the rich and the poor, and measuring the social mood, people's participation in policy making, etc.

Vietnam's digital economy over the past time has developed haphazardly, but it has grown quite rapidly thanks to relatively good telecommunications and IT infrastructure with wide coverage and high number of users. That development is also thanks to the Vietnamese people’s passion about technology, the young, well-trained, well-educated, good-at-math and hard-working population of Vietnam, and the Vietnamese people’s character of quickly adapting to the change. This is Vietnam's advantage for digital transformation. Now we need the guidance of the Government, a National Strategy on digital transformation and the digital economy.

In September 2019, the Politburo issued Resolution 52-NQ/TW on a number of guidelines and policies for Vietnam’s active participation in the 4th industrial revolution. It emphasizes the urgent need to speed up the process of digital transformation. In June 2020, the Prime Minister issued the National Digital Transformation Program to 2025, with a vision to 2030. Vietnam is among the few countries in the world that issued a national strategy on digital transformation very early.

The fastest way to accelerate the digital economy is to use digital technology to change the way we are manufacturing and working. But who will do this? That will be digital technology businesses. Therefore, it is necessary to start digital technology and develop Vietnamese digital technology enterprises. Using digital technology to solve Vietnamese problems, and from the cradle of Vietnam, these technology businesses will go global. Technology is born to solve problems, where there is a problem, there is technology, there is a solution. Problems are everywhere, maybe in our daily work, and each of us can start a technology start-up to solve our problems. The revolution of all the people to build digital start-ups and digital popularization will help Vietnam digitize the economy very quickly.

Digital technology will spawn new business models that challenge or replace old business models. For example, Uber challenges taxis, Fintech challenges traditional banking. Allowing mobile telecommunications accounts to pay for goods will solve the problem of non-cash payments for 100% of people, but also challenge banks. The question is whether we dare to accept these new business models. If we dare to accept but are the last to accept, it is not of much value.

 

That is why many people say that digital transformation is more of a policy revolution than a technology revolution. The first is adopting new business models, new technologies that fundamentally change industries. Often creation destroys the old. If we accept the new, new technology of the world will come, talents from all over the world will come, a new industry will emerge, and the cradle of Vietnam will create exportable digital technology products. But it must be an early acceptance, earlier than others. If walking behind or at the same pace with others, there will be no chance to change Vietnam's ranking. When we accept the new, we may lose something. But we don't have too much to lose; that's our opportunity.

The traditional approach to policy is usually: what we can control, we open it, and vice versa. The new approach that many countries apply is called the Sandbox approach: what we do not know how to manage, let them self-develop, but within a certain space, within a certain time, for problems to be revealed. After that, policy and regulations are designed to manage. This is one of the policy approaches suitable for the 4th industrial revolution, for embracing new business models and innovation.

The fundamental factors to support Vietnam's digital economic development are: Firstly, modern, world-class telecommunications - IT infrastructure, broadband, high-speed Internet. Each citizen should have a smart phone, and 5G technology should appear in Vietnam at the same pace as developed countries.

Secondly, the Government's policies are related to digital economy and digital technology, and the Internet must be globally competitive so that Vietnamese people do not have to go abroad to launch digital technology start-ups, and foreigners and talented people from all over the world can come to Vietnam to develop technology.

Thirdly, the Government will spend more on digital products, lead the digital economy through building digital and e-government to create the initial market for developing digital businesses.

Fourthly, human resource training, in parallel with the introduction of English and IT training in compulsory training programs from high school. It is a must to implement retraining, advanced training in digital skills, digital competencies for the workforce. Colleges should have official retraining courses and advanced training, with the time to be only 6-12 months and granting certificates only. This is the best way to deal with a serious lack of manpower.

For digital transformation, Vietnam can choose a 3-step strategy: Step one, accelerate the digitization of industries, promote digital government, digital enterprises, and digital society in order to increase operational efficiency and labor productivity, and create new growth opportunities. Step two, use digitization as a competitive advantage domestically and globally. Step three, move towards a comprehensive digital economy, where all sectors are digitized, forming a new generation of digital industries, which will be the growth engine for the economy.

In digital transformation, the press and the media play an important role. The mission of the press and media is to protect the Party's root and foundation, and to protect the good cultural values of the nation. The more we want to go forward, the more we want to conduct digital transformation; the faster we want to develop, and the more we must be consistent, the more we have to keep our roots and foundations; to proactively and actively fight against malicious information, to build clean and healthy cyberspace; to honestly reflect the main flow of society, to create social consensus, to spread positive energy, to build social trust and to create aspirations for a mighty and prosperous Vietnam. Every country that wants to develop and thrive must arouse the spiritual strength of the nation.

And finally, when the digital revolution, the 4.0 industrial revolution happens, the future will not lie in the extended line of the past. In countries like Vietnam we have a chance to make a breakthrough. But it must be new, non-traditional, non-sequential thinking. Both state agencies and enterprises need a breakthrough in thinking, in policy, and in approach.

Nguyen Manh Hung (Minister of Information and Communications)