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The Digital Transformation Landscape in Vietnam and Its Regional Impact
Vietnam's Digital Transformation Process in the Regional Context
According to Microsoft's research conducted in the Asia-Pacific region, both before and after the outbreak of the COVID-19 pandemic, the majority of leaders and businesses agree that innovation is crucial and necessary for the overall development landscape.
Our government has actively propelled the digital transformation process. Specifically, the Ministry of Industry and Trade has organized numerous online trade promotion conferences. This facilitates businesses in reaching partners more easily, enhancing overall production and business efficiency.
However, Vietnamese businesses in general, especially small and medium-sized enterprises (SMEs), still lack a proper understanding of their role in the fourth industrial revolution. According to VCCI, currently, SMEs account for about 97% of the total number of businesses in Vietnam. Their level of scientific and technological knowledge and innovation is low, with 80% to 90% of machinery used in Vietnamese businesses being imported. Nearly 80% of these technologies are outdated, dating back to the 1980s and 1990s.
In April, Cisco released the report 'Digital Development Index of Small and Medium-Sized Enterprises in the Asia-Pacific Region,' conducted on 1,340 businesses in the region and 50 Vietnamese businesses specifically. In Vietnam, SMEs are facing obstacles in the digital transformation process, such as a lack of digital skills and workforce (17%), insufficient robust IT infrastructure for digital conversion (16.7%), and challenges related to digital mindset or digital culture within businesses (15.7%).
Nevertheless, the report also points out that Vietnamese SMEs are beginning to invest in cloud technology (18%), cybersecurity (12.7%), and software and hardware upgrades for digital transformation (10.7%).
Therefore, in comparison to the overall innovation in the entire region, Vietnam still lags behind and requires more effort to catch up with the progress of other countries.
The Current State of Digital Transformation in Vietnam
Vietnam and the Digital Transformation Journey
Government's Digital Transformation
Digital Government: National databases have been integrated, expanded, and interconnected, including:
- Social Insurance Data
- Citizen Data: Nearly 78 million records
- Covid-19 Vaccine Search Data: 133 million doses
- …
Digital Economy: According to estimates from the Ministry of Information and Communications, it reached approximately 53 billion USD in Q1/2022. The number of newly established digital technology companies increased by 500 compared to 2021.
Online public services at level 4 continue to be actively implemented with effectiveness
Business Digital Transformation
In 2020, according to Vinasa, over 92% of Vietnamese businesses acknowledged this issue, but only 10% believed that digital transformation could be successful. 92% of small and medium-sized enterprises (SMEs) lacked understanding of digital transformation, while 72% didn't know where to start.
In 2021, the majority of businesses applied software and solutions for omnichannel management, online sales, and distribution channel management.
Most new businesses only digitized data and processes, mistakenly thinking they had successfully undergone digital transformation, without realizing that the ultimate goal is a shift in business models.
2. Why undergo digital transformation?
The path of digital transformation is challenging and demanding, yet the government consistently advocates for it. The main reason is the immense benefits it brings. Although it requires time, effort, and financial investment, the returns are substantial and far-reaching. Digital transformation not only enhances productivity and reduces costs but also opens up new development opportunities, creating new values beyond traditional ones.
Another crucial reason is that digital transformation is a global development trend. The world is undergoing changes, and Vietnam cannot separate itself from the common direction of other nations. In the era of advanced technology, where everything operates in a 4.0 manner, operational methods should also progress to keep up with the times.
Above, mytour has provided you with some insights into the digital transformation landscape in Vietnam. Hopefully, we can advance further on the path of innovation.
Explore more:
- Distinguishing between digital transformation and digitization
- Exemplary companies successfully embracing digital transformation
