How Vietnam can manage risks, challenges to unlock full digital transformation gains

Issues around privacy, data security, skills gap, and potential exclusion from the digital ecosystem, have been identified among the risks and challenges that the government of Vietnam must tackle as it rolls on its Digital Transformation Agenda (DTA)

The DTA, overseen by the Ministry of Information and Communication, is supported by three major pillars, namely digital government, digital economy and digital society, all necessary for enabling the country achieve its strategic national development goals.

In an Open Development Vietnam paper that discusses the DTA in detail, it is mentioned that while the agenda portends great opportunities for the country, there are several challenges and risks which must be carefully studied and systematically addressed. The challenges are discussed by pillar.

With regard to digital government which is aimed at streamlining government services and enhancing interactions between government agencies and citizens, the paper notes that the country has recorded impressive results over the years, thanks in part to the putting in place of a framework and strategy which seek to ensure that all government services in the country are accessed digitally by the end of this year. This, the government believes, will build on its progress of the last few years in the digital government development index in South East Asia.

The paper notes that while the country has registered major gains in the digital government pillar of the DTA through different projects and actions, some shortcoming shave been reported. Among them are the paucity of digital government infrastructure in some parts of the country such as rural and hard-to-reach communities, which has led to a gaping digital divide, as well as the lack of quality and reliable digital government services in some instances.

Under the digital economy pillar, Vietnam is also said to have made major strides as reflected in the growth of digital commerce and digital payments, driven largely by a high internet penetration rate of 79.1 percent. As of 2022, Vietnam’s digital economy, which was estimated at about $166.4 billion, made for 14.26 percent of the country’s entire GDP with a government plan to let it hit 30 percent by 2030, the paper notes.

Despite the steps taken by the government to encourage the creation of startups, trigger innovation and invest in digital economy infrastructure, this pillar is still wanting in a number of ways. That is why the paper suggests that concrete action must be taken such as closing the skills gap which is common in rural settings and among women, facilitating access to capital, intellectual property protection, fixing some regulatory shortcomings as well as strengthening the digital ecosystem.

The third pillar of digital society, the paper demonstrates, is somewhat linked to the second (digital economy). This, it mentions, is because a lack of digital skills or digital literacy, more generally, can be a barrier to the adoption and proper use of digital technologies.

As part of the efforts to tackle the challenges facing this sector, the country is said to be harnessing digital skills, and promoting digital literacy in order to make sure the gains of digitalization reach every Vietnamese, no matter where they are.

It is suggested that while Vietnam works to strengthen its digital society experience, it must also watch out for challenges that come in the form of digital identity risks, cybercrimes, and citizen and digital rights.

Ho Chi Minh City on path to paperless administration

Meanwhile, as the country continues the DTA implementation, a place like Ho Chi Minh City is in full gear to meet its digital government objectives for 2025.

This year, the city government says it intends to deliver on its push to set up a paperless government, Vietnam Net reports.

To meet this objective, city authorities recently unveiled a Digital Transformation Centre, which adds to plans that include unveiling seven digital platforms, a data integration and interoperable system, ensuring the upgrade of important infrastructure, reskilling workers, as well as increased infrastructure investments.

Financial inclusion, a major aspect of digital transformation

This is a major achievement of Vietnam’s digital transformation push. Talking about digital payments and financial inclusion, Vietnam Net reports that there’s been a significant rise in digital banking services in the country, with the State Bank of Vietnam indicating that about 87 percent of the population is banked and over 95 percent of payments by credit institutions is done via digital means.

As an example, the interbank digital payment system of the country is able to process VND 830 trillion (US$32.83 billion) on a daily basis, while about 9.56billion digital payment transactions are enabled and completed by the National Payments Corporation of Vietnam (NAPAS).

As the country advances its digital transformation drive, there are also suggestions for the government to put in place the right national digital database infrastructure and management apparatus.

By the end of December, the country said it had enrolled 70 million people into the national identity database, which is a key component of the digital transformation drive.

The same month, officials announced that they were integrating more services into the VNeID digital ID applications in order to facilitate access.

Article Topics

digital government  |  digital ID  |  digital identity  |  digital inclusion  |  financial inclusion  |  Vietnam