Policymaking fails to keep pace with digital economy: experts

Nearly 300 local and foreign experts gathered at a conference as part of the forum to seek ways to build institutions and adopt fundamental conditions for the development of a digital economy in Vietnam.

The digital economy is growing rapidly across all aspects of social and economic life in all countries. It will completely change the way in which production organization, service provision, business models, consumption and communication are managed, said Deputy Minister of Planning and Investment Vu Dai Thang.

Thang cited a joint study by Google and Singapore’s Temasek Holdings, noting that Vietnam’s digital economy was estimated at US$3 billion in 2015, rising to US$9 billion in 2018, and was expected to reach US$30 billion by 2025.

Australia’s leading digital research network Data61 suggested that Vietnam’s gross domestic product (GDP) may increase by US$162 billion in two decades if the country succeeds at digital transformation.

The deputy minister said that businesses are the keystone to this growth, so they should proactively seek to apply digital technology to smooth the transformation process and lay the foundation for Vietnam’s digital economy.

He pointed out four major policies for the country’s digital economic development: providing an institutional framework for digital economic business models, developing connectivity infrastructure, creating national databases and training manpower.

The amendments and supplements to regulations for sectors with new business models, such as e-commerce, digital finance and e-banking, play a crucial role in the institutional framework, he said.

Further, institutional reforms to attract investment in digital technology will be made in a way that facilitates capital contribution, share purchases and mergers and acquisitions among tech businesses.

The Ministry of Planning and Investment is working on a national strategy to capitalize on the Fourth Industrial Revolution to enable businesses to take advantage of opportunities presented by digitization, he added.

Meanwhile, Deputy Minister of Information and Communications Nguyen Thanh Hung said that his ministry has been tasked with drawing up a roadmap for the country’s digitization where at least 50% of enterprises will conduct their businesses digitally by 2025 and the digital economy will make up some 20% of the nation’s GDP.

It also sets a target for the Government to have at least 80% of its interactions with the public and businesses completed digitally by 2025.

For the sake of the digital economy’s development, Hung said that Vietnam needs to build trust in digital infrastructure among users. As a result, cybersecurity is a fundamental condition for the development of a digital infrastructure and economy.

He pointed out that data is not yet shared among ministries and agencies, so Vietnam is still in the early stages of creating a digital economy.

Bui Quang Ngoc, vice chairman of Vietnamese tech giant FPT Corporation, said that the development of a regulatory framework for the digital economy is a vital issue. “The digital economy creates new business sectors. The legalization of these new sectors needs to be executed in sync,” he said.

The greatest challenge, which is also one of Vietnam’s weakest points, is the large gap between policy-making and execution, according to Ngoc.

He added that the Government launched programs and solutions to develop the digital economy two decades ago. However, their results fell short of expectations.

He also confirmed that the public sector is an important stakeholder in stimulating the economy. Everything needs digital operations, but e-government, smart healthcare and smart transport programs are not taking full advantage of this system.

The gap between planning and enforcement is due to the lack of accountability systems and policies, especially for legal issues, such as e-transactions, e-invoices and e-contracts.

The digital economy has been booming in the last few years. It grew by over 25% last year, and the country can sustain this rate for the next two to three years, according to the Vietnam E-Commerce Association.

Held by the Government Office and the Party Central Committee’s Economic Commission, the Vietnam Private Sector Economic Forum 2019 drew the participation of policymakers, economists, academics, business representatives and delegates from international organizations.