Will VN em­brace dig­i­tal trans­for­ma­tion?

On­line con­nec­tiv­ity will be a driv­ing force to boost Viet­namese econ­omy in years to come

Viet Nam News - - IT NEWS -

HCM CITY — Dig­i­tal tech­nol­ogy and on­line con­nec­tiv­ity will be a driv­ing force for the growth and trans­for­ma­tion of the Viet­namese econ­omy in the com­ing decades.

“Tech­nol­ogy rev­o­lu­tion and digi­ti­sa­tion have grad­u­ally changed the Viet­namese so­cioe­con­omy,” Lucy Cameroon, head of the on­go­ing “Vieät Nam’s Fu­ture Dig­i­tal Econ­omy” project said.

“Clearly un­der­stand­ing dig­i­tal trends would help Vieät Nam grasp op­por­tu­ni­ties and limit risks. This is a good chance for Vieät Nam to pre­pare for a break­through.”

The project is aimed at mak­ing strate­gic pre­dic­tions about Vieät Nam’s dig­i­tal econ­omy in the next 20 years.

At the work­shop, which was held in HCM City on Wed­nes­day, four pos­si­ble sce­nar­ios for the coun­try’s dig­i­tal econ­omy were dis­cussed.

In the first sce­nario, there will be lit­tle change. There will be low dig­i­tal trans­for­ma­tion and dig­i­tal adop­tion and pro­duc­tiv­ity.

There will be a fail­ure to re­form by the Gov­ern­ment and in­dus­try to pre­pare for new tech­nolo­gies and the dig­i­tal dis­rup­tion.

There will be reg­u­lar cy­ber­at­tacks on the coun­try’s ICT net­works and bank­ing and other sec­tors. Reg­u­lar data breaches and hack­ing will in­crease con­sumer dis­trust in elec­tronic net­works and sys­tems, re­sult­ing in the growth of the in­for­mal econ­omy and in­crease in the use of cash.

Flatlin­ing labour pro­duc­tiv­ity will cause some of the larger fac­to­ries pro­duc­ing high-tech­nol­ogy goods to move off­shore to take ad­van­tage of in­dus­try 4.0 tech­nolo­gies and cheap, re­li­able and clean sources of power.

Fac­to­ries clos­ing or re­plac­ing staff with au­to­mated sys­tems in all sec­tors will cre­ate high unem­ploy­ment, par­tic­u­larly in re­gional and ru­ral ar­eas, and this will neg­a­tively im­pact crime, per­sonal safety and the live­abil­ity of cities.

The speed of ur­ban­i­sa­tion will in­crease, in­fra­struc­ture will be in­ad­e­quate, the qual­ity of life in ur­ban ar­eas will be lower, and en­ergy will be un­re­li­able.

Lack of ef­fec­tive mon­i­tor­ing and con­trol of en­vi­ron­men­tal pol­lu­tion will de­grade land, air and water.

In the sec­ond sce­nario, there will be dig­i­tal trans­for­ma­tion, dig­i­tal adop­tion and high ICT in­dus­try growth, and labour pro­duc­tiv­ity will in­crease across all sec­tors.

Dig­i­tal adop­tion is wide­spread across the pop­u­la­tion and in­dus­trial sec­tors, re­sult­ing in in­clu­sive growth.

The coun­try’s main ex­ports will be knowl­edge-based ser­vices, es­pe­cially in de­sign, dig­i­tal ser­vices, agri­cul­tural tech­nolo­gies, and ad­vanced man­u­fac­tur­ing.

For this sce­nario to oc­cur, there needs to be in­vest­ment in ed­u­ca­tion, new en­ergy sources, a na­tional in­no­va­tion net­work, and safe and se­cure com­mu­ni­ca­tions net­works.

There should be fo­cus on cy­ber se­cu­rity and wide­spread de­ploy­ment of new net­works to en­able IoT while build­ing broad pro­fi­ciency in writ­ing code and cen­tres of ex­cel­lence in ICT growth in­dus­tries.

In­tro­duc­tion of a dig­i­tal cur­rency for Vieät Nam and as­so­ci­ated apps is needed.

Vieät Nam’s ex­port in­dus­tries will have trans­formed and be­come knowl­edge-in­ten­sive. Vieät Nam will be one of Asia’s ‘tiger’ economies and on the verge of be­com­ing a high-in­come na­tion.

The dig­i­tal econ­omy will boom in terms of both sup­ply for in­ter­nal projects and also ex­ports of ICT prod­ucts and ser­vices

In this sce­nario, Vieät Nam will be a world leader in ICT, have bet­ter lo­gis­tics fa­cil­i­ties and ben­e­fit from a brain gain. Ur­ban ar­eas will use clean fu­els and have clean air and high live­abil­ity, peo­ple will travel by metro and au­tonomous ve­hi­cles in smart cities and can work from any­where.

In the third sce­nario, Vieät Nam is a dig­i­tal ex­porter. Its ICT in­dus­try will grow based on out­sourc­ing from other coun­tries, but in­ter­nal adop­tion of dig­i­tal tech­nolo­gies across in­dus­tries will re­main low though with­out sig­nif­i­cantly im­pact­ing labour pro­duc­tiv­ity.

Eco­nomic growth in Vieät Nam is no longer in­clu­sive, but largely re­stricted to a few priv­i­leged en­claves in main ex­port sec­tors like ICT prod­ucts and ser­vices com­mis­sioned by ex­ter­nal com­pa­nies, agri­cul­ture, tourism.

Vieät Nam will still be a low­cost labour mar­ket and spe­cialise in IT out­sourc­ing and ICT man­u­fac­tur­ing.

Adop­tion of new tech­nolo­gies will be ham­pered by fears of rapid change, lack of reg­u­la­tory re­forms, lack of cy­ber se­cu­rity across the telecom­mu­ni­ca­tions net­works, and low in­vest­ment in test­ing and in­dus­try mod­erni­sa­tion in­cen­tives.

Pa­tent pro­tec­tion will have im­proved but still not ap­ply to many ICT prod­ucts and soft­ware.

The na­tional in­no­va­tion sys­tem will not be ma­ture, and so in­no­va­tion, for­eign aid for in­no­va­tion and tech­ni­cal de­vel­op­ments will be op­por­tunis­tic and un­co­or­di­nated to meet the needs of ex­ter­nal play­ers rather than used in a co-or­di­nated way to achieve Vieät Nam’s goals.

Vieät Nam’s cities will be grow­ing and be­com­ing more ge­o­graph­i­cally dis­tinct, with richer and poorer ar­eas be­com­ing clearly de­mar­cated.

The richer ar­eas within the ur­ban en­vi­ron­ments will have greater op­por­tu­ni­ties and ac­cess to jobs and train­ing than poorer ar­eas, which have grown on the out­skirts of ma­jor met­ro­pol­i­tan cen­tres.

There will be ar­eas of high crime, and these ar­eas will in­crease their use of the in­for­mal econ­omy even while other ar­eas re­duce it.

Al­though sys­tems for en­vi­ron­men­tal mon­i­tor­ing will im­prove, this will not trans­late into a high de­gree of on-the-ground re­silience.

In the fourth sce­nario, the in­dus­try will use ICT goods and ser­vices from other coun­tries and im­proves pro­duc­tiv­ity across all sec­tors.

Dig­i­tal adop­tion across all in­dus­try sec­tors will be high, and this will have a pos­i­tive im­pacts on labour pro­duc­tiv­ity.

In­dus­trial trans­for­ma­tion will be broad but ex­pen­sive due to the im­port of tech­nolo­gies and plat­forms.

In ex­ports, pro­duc­tiv­ity will in­crease but there will be a lim­ited change in mar­ket com­po­si­tion

In­vest­ment in ICT hard­ware man­u­fac­tur­ing will grow and 90 per cent of fac­to­ries and lo­gis­tics pro­cesses will be au­to­mated.

The ICT sec­tor will grow, but there will also be growth in other sec­tors to match it. The ICT in­dus­try will re­main cen­tred on hard­ware man­u­fac­tur­ing rather than new prod­ucts or soft­ware.

Most of the tech­nolo­gies used to im­prove labour and pro­duc­tiv­ity and mod­ernise in­dus­try will be im­ported. This means Vieät Nam will have only sec­ond-mover ad­van­tage, sav­ing some costs as­so­ci­ated with ICT de­vel­op­ment but pay­ing ex­ter­nal com­pa­nies more for their ser­vices over the longer term.

Us­ing only ex­ter­nal prod­ucts, ser­vices and plat­forms will also mean that other coun­tries col­lect and an­a­lyse a lot of data on Viet­namese busi­nesses and cit­i­zens.

In­no­va­tion will be fo­cused on mod­ernising in­dus­try. In­dus­try in­cen­tives like grants for smart spe­cial­i­sa­tion, tax breaks, guide­lines on FDI, and in­no­va­tion re­wards will cre­ate rapid change, first in man­u­fac­tur­ing then in agri­cul­ture.

In­vest­ment in a na­tional in­no­va­tion sys­tem will fo­cus heav­ily on in­dus­try part­ner­ships and the adop­tion rather than the de­vel­op­ment of new tech­nolo­gies.

There will be co-or­di­nated roll-outs of 5G and IoT net­works and this will re­sult in the de­vel­op­ment of smart city in­fra­struc­ture and use of sen­sor net­works across much of the coun­try.

Life in ur­ban ar­eas will change sig­nif­i­cantly with the use of smart city in­fra­struc­ture and the in­tro­duc­tion of AI to mon­i­tor and con­trol every­thing from waste col­lec­tion and traf­fic flows to emer­gency re­sponse units and crime.

The pro­gramme is be­ing car­ried by the Min­istry of Science and Tech­nol­ogy and Aus­tralian Data 61 un­der the Aus­tralian Em­bassy’s Aus-4In­no­va­tion pro­gramme.

It was started in Jan­uary 2018 and will fin­ish next March. — VNS

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