Digital transformation would be the key for Vietnam to achieve its targets of becoming a high-income country and a ‘net-zero’ emissions economy, an IFC vice president says.
Vietnam has two big goals by the middle of this century. One is to become a high-income country by 2045 under the Resolution of the 13th National Party Congress and another is to reach net-zero carbon emissions by 2050 as committed by Prime Minister Pham Minh Chinh at the 2021 United Nations Climate Change Conference (COP 26).
Alfonso Garcia Mora, the International Finance Corporation’s regional vice president for the Asia Pacific, told VnExpress that Vietnam now faces two major challenges as it has to manage to bring labor productivity to a new level in order to achieve the goal of becoming a rich country while learning to adapt to climate change.
“From the above two challenges, we have a common key to solve it through technology and digital transformation. It is no longer an option, it is a must,” said Alfonso.
He said Vietnam has lots of advantages for digital transformation.
According to World Bank data, the digital sector in Vietnam has expanded by 10 percent per year and could reach over $200 billion by 2045, a huge figure compared to the size of Vietnam’s GDP, which was nearly $352 billion last year.
The young population rate and high smartphone and Internet coverage are also favorable factors for Vietnam to accelerate digital transformation, Alfonso said.
To enhance innovation and maximize development opportunities for the digital economy, there are four keys – digital entrepreneurship, digital infrastructure, digital skills and digital financial services, he added.
“It’s necessary to improve digital skills among the workforce, a step to take the economy to a new level of development and achieving ambitions of high incomes and net-zero emissions,” he recommended.
According to a World Bank report, only 40 percent of businesses in Vietnam said they have enough capabilities in terms of information and communication technology and it is estimated that the market would face a huge shortage of up to one million ICT engineers by 2023.
Some large enterprises have already begun adopting digital transformation but the problem is that most of the country’s enterprises are small and medium sized and the top challenge is how to help this group go digital.
Alfonso said there must be a clear and credible policy, investment in 4G and 5G technology infrastructure and improvement in digital and technology skills while the government should offer fiscal incentives for small and medium businesses so they are ready for digital transformation.
The IFC expert said many Vietnamese companies have not used digital transformation tools, which poses opportunities for the potential market to develop.
Besides, the Covid pandemic in the past two years has helped the Vietnamese economy make leaps in digital transformation that should have taken three to five years to achieve.
He said it’s high time for Vietnam to push up digital transformation.
In order to achieve successful digital transformation, there needs to be cooperation between the public and private sectors while the government should have a clear strategic vision as to how many percentages the economy would go digital by 2050.
With specific localities in particular and Vietnam in general, digital transformation is only to help the country grow richer but also to reduce risks and boost adaptation to climate change. Therefore, digital transformation must also pay attention to sustainable development.
“Today, we see 80 percent of greenhouse gas emissions coming from large cities. To achieve the goal of carbon neutrality by 2050 we will need changes like digitization and use of electric vehicles,” he said.
In addition, he said the government should have encouraging policies to motivate businesses to join digital transformation.
“We must open the market and allow innovative startups to develop to push the digital economy forward. We need to give them a safe environment,” said Alfonso.
“Four years ago, no one trusted telemedicine but now people are familiar with the service. Similarly, online learning could have been an option before the pandemic but it was mandatory during the lockdown period. These new habits are very important in increasing accessibility for people in remote areas and ensuring inclusive development,” he said.
Alfonso said the IFC, the largest global development organization focused on supporting the private sector in emerging economies, has invested $13.3 billion in more than 190 projects in Vietnam and will continue to invest in many activities to support Vietnam’s digital transformation.
IFC would help local banks provide more digital financial services on mobile phones and optimize logistics, encourage the use of clean energy as well as offer opportunities for healthcare and education to go digital.
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