However, up to 70 percent of Vietnamese people use the Internet. This towering number of people surfing the internet shows an irreversible trend of the urgent digital transformation.
By Ho Son – Translated by Anh Quan
However, up to 70 percent of Vietnamese people use the Internet. This towering number of people surfing the internet shows an irreversible trend of the urgent digital transformation.
By Ho Son – Translated by Anh Quan
The city sets target to become a hub of finance and trade in the Southeast Asia by 2030, marking its leading role in Vietnam’s digital economy and society with GRDP of $13,000 per head on average.
Forty-six years – a long time for a human life but just a blink in an eye for Nhan Huynh, a Vietnamese-American, as he has witnessed an impressive change in Ho Chi Minh City (HCMC) since Vietnam liberated the South and reunited the nation, putting an end to the 30-year war, in 1975.
|A corner of Ho Chi Minh City. Photo: kinhtedothi|
Huynh, a businessperson usually travelling between the US and Vietnam, told Hanoitimes that HCMC, formerly known as Saigon, is his birthplace so wherever he goes, his heart still looks towards this city.
“I still remember… when the South was liberated for national reunification on April 30, 1975, local economy started to decline… many families had to eat cooked rice mixed with potatoes and cassava,” Huynh said.
Just a wink, after 46 years, the city has rapidly and strongly developed…everything has changed… people enjoy a full life with delicious foods, beautiful clothes and many other conveniences … not only me but also many Viet kieu [overseas Vietnamese people] across the world having aspired to invest in the city,” he said.
Tam Nguyen, a Vietnamese-Japanese who has been for many years doing business in HCMC, has expressed his absolute trust in the city’s development and wished to promote long-run projects in the city.
“I was not often here, I was always surprised whenever I came back HCMC, where has been developing fast and more beautiful day by day,” Tam said.
He said: “I am grateful for the city’s flexible policies in business registration, creating favorable conditions for young people to start a business, and for expatriates who wish to head to their homeland like me.”
After 46 years of the day of southern liberation for national reunification, HCMC today has risen to a modern city with many high-rise buildings and wide open roads, along with rich culture and progresses in economic growth, making a great pride for Vietnamese people, business community and Viet kieu as well.
Dr. Su Ngoc Khuong, a senior executive at Savills Vietnam, told Hanoitimes that on a 46-year journey between 1975 and 2021, HCMC has always maintained its role as a leader in promoting key economic development in the South and the whole country.
He said the city every year is in the list of localities with top GDP contribution and also the destination for billion-dollar investors and giant enterprises.
“In the period 2020-21, when the Covid-19 pandemic holds back the world’s economic growth, HCMC is still a solid fulcrum for the country’s development. And in the future, with the goal of building a knowledge-based economy with constant reform and innovation, the city is forecasted to reach further,” said Khuong.
Building a smart city is seen as a great progress of the HCMC after 46 years of liberation. After half a century of war and poverty, the southern city is urgently moving forward with huge plans of expansion and urban development, marking its determination to be one of the top cities in the world.
|The smart city will make a change in the living of local residents, helping them get access to modern services of health, food safety, environment, flood control, human resources, security, e-government and urbanism. Photo: doimoisangtao.vn|
The smart city project has been carried out in HCMC since 2018 and will be realized by 2025. It will ensure the city’s economic growth moving towards knowledge-based economy and digital economy, and effective urban governance to improve the quality of living and working environment and enhance people’s participation in management.
As planned, the smart city will benefit local residents in the fields of health, food safety, environment, flood control, human resources, security, e-government and urbanism.
Nguyen Nam Hien, Deputy General of Hung Thinh Corp, said over the past years, the management and development of the smart city project have seen many positive changes. Urban space has been expanded along with increasing number of population. “People enjoy more conveniences of a modern city.”
Hien said after more than two years of implementing the smart city project, the HCMC has remarkably changed with many advanced technologies, which brought about positive results.
“The goal of turning HCMC to be a place with modern and civilized life has gradually come true,” Hien said.
Having benefited from the smart city project, Nguyen Thi Thao, a resident in the city’s District 8, told Hanoitimes that her living standard has been significantly improved as she is part of the Fourth Industrial resolution.
“With a smartphone connected to the Internet, I can pay electricity and water bills, get information about traffic jams and floods in the city. It helps me save a lot of time,” Thao said.
People can perform administrative procedures easily in the online form. It is really convenient, fast and modern … the city people’s life has never been better than today,” she said.
The city’s economic growth basing on high-tech and services has been rapidly developed in the city for years, especially after the HCMC Economic Forum 2018 (HEF 2018) themed “Fostering Interactive and Innovative Districts: The Prominent Role of Businesses”, which introduces the construction plan of the city’s Eastern part toward a creative urban model.
With support from leading experts in the world and Vietnam as well, the city has realized its sustainable goals, creating breakthrough reforms in economic development. Of the plan, Thu Duc is seen as the cradle of the digital transformation in the city.
On December 31, 2020, Thu Duc, a creative urban area in the Eastern part of HCMC officially became a city according to a decision issued by the National Assembly Standing Committee.
Thu Duc city, under the management of HCMC, is a development model dependent on the knowledge-based economy, in which it creates a driving force for the development of economy, education and health.
There is still a very far way for Thu Duc city to realize its goals comprehensively but it has appeared some prominent areas that can be seen as images of the HCMC’s economic development in the future. One of them is Saigon Hi-Tech Park, which is expected to be a powerful tractor for high-tech industries under the knowledge-based economy. By the end of last year, about 160 project had been granted investment registration certificates in the park.
|A worker at work in Saigon High-Tech Park in HCM City. Photo: kinhtedothi|
According to Nguyen Anh Thi, Head of the Saigon High-Tech Park’s Management Board, the board has set plan to reach nearly US$11 billion of investment capital by 2025, with an export value of about $30 billion per year, marking an annual increase of 10% on average. Meanwhile, the domestic value added in gross export is expected to gain 35%.
“We expect the domestic enterprises’ production value of high-tech products in the 2020-25 period will increase by at least two times compared with previous five years,” Thi said.
The Saigon Hi-Tech Park is also the first place of Vietnam to begin researching and producing Covid-19 vaccines. The vaccine has gone through several stages of testing and got close to being used publicly. “Its pioneering in the production of vaccine has helped Vietnam to be named in the group of countries that can be self-reliant in vaccines, ensuring health security for the nation in the future,” Thi said.
The 2020-25 period is a gear-up step for the city’s development. After the successful innovation of Thu Duc city, the municipal authorities are making best efforts to support business community with many open policies to develop key and competitive products as well as creating condition for local businesses to participate in the global supply chain.
The city will apply high-tech and innovation in production, focusing on investment in finance-banking service, tourism, trade, logistics and infrastructure planning as well as encouraging the production and export of high-tech products, software and digital products.
In this period, the city aims to maintain its key role in the economy in the South and the whole country, taking the lead in innovation and building a high-quality living for local people with a gross regional domestic product (GRDP) of US$8,500 per head on average by 2025.
It is expected to become a center of economy, finance, trade, science and technology and culture in the Southeast Asia by 2030, being a leader in digital economy and society with GRDP of $13,000 per head on average.
By 2045, the city will become an attractive destination in the world and an economic and financial hub of Asia. Local people will have a high quality living standard with GRDP of $37,700 per head on average.
|Initiative protecting digital SME assets, illustration photo|
A workshop on supporting such enterprises (SMEs) in developing and protecting brands and other digital assets in the digital economy held last week lured 200 representatives from ministries, government agencies, business associations and businesses, raising their awareness of the role of digital assets in their business and operations in the context of the Fourth Industrial Revolution.
It also covered the fostering of digital transformation in SMEs, contributing to objectives of the supporting enterprises’ digital transformation 2021-2025 programme, being implemented by the Ministry of Planning and Investment with the assistance from USAID’s LinkSME project since December.
Digital payments, e-commerce, data protection, traceability, barcodes, and blockchain in product traceability was discussed at the workshop between platforms and digital payments groups such as Amazon, Google, Momo, Tiki, KPMG, FPT Software, and TraceVerified, alongside government agencies.
The event was deemed of benefit for SMEs after they have been selected to provide tech assistance activities for developing and positioning of brands, application of traceability and barcodes, and facilitation of products and services to e-commerce platforms, expanding their opportunities to access new markets
Also last week, Amazon Global Selling strengthened collaboration with the Vietnam E-commerce and Digital Economy Agency (iDEA) under the Ministry of Indusry and Trade to jointly support Vietnamese sellers on developing their business through cross-border e-commerce.
At the same time, Amazon Global Selling launched the “Win Global with Local Products in the New Trade Era” campaign to further support Vietnamese sellers in going global, by helping them acquire the knowledge of cross-border e-commerce and providing assistance with their on-board and operations process on Amazon, and improving their competency in building global business.
The objective of both efforts is to jointly build a more vigorous environment for Vietnamese sellers, and equip them with knowledge on how to sell globally, grasp the chance of global e-commerce development, and expand their business internationally.
The “Win Global with Local Products in the New Trade Era” campaign will provide Vietnam entrepreneurs with broader training and education programmes on cross-border e-commerce, covering topics about how to sell on Amazon, the on-boarding process, fulfilment by Amazon, and building a brand on the platform.
“Vietnam is one of the most dynamic emerging countries in the world and has shown its resilience in the time of COVID-19 pandemic. We hope to further contribute to the development of Vietnam cross-border e-commerce and motivate more businesses to go global,” shared Gijae Seong, head of Amazon Global Selling in Vietnam. “This year, Amazon has taken a proactive approach by expanding our cooperation with local organisations, especially iDEA – an agency that has years of experience in training Vietnamese SMEs. Together we are pursuing the vision of transforming the future of Vietnamese exports and enhancing digital economy development.”
Vietnam is home to about 800,000 enterprises, 98 per cent of which are SMEs. Among all small- and micro-sized enterprises, which account for 40 per cent GDP, more than 45 per cent has not engaged well with technology, according to Ralf Matthaes, founder and managing director at Infocus Mekong research.
“However, Vietnamese SMEs lack the capital to invest in technological innovation or expansion of production scale, with poor human resources and weak links between SMEs and large enterprises,” Matthaes added.
Deputy Minister of Planning and Investment Tran Quoc Phuong noted in January that local enterprises are going through the restructuring process and that the application of digital technology is inevitable to ensure sustainable growth and prevent the risk of lagging behind regional and international peers.
The government has issued Decision No.749/QD-TTg regarding the National Digital Transformation Programme until 2025 with a vision to 2030, focusing on SMEs. In order to fulfil the missions, it will be necessary to invest in developing tech platforms to support the growth transformation of such enterprises.
By Thu Nguyen
The city by 2045 is expected to become a financial and economic hub of Asia and an attractive global city with GRDP per capita of US$37,000.
Ho Chi Minh City (HCMC) is taking firm steps to digitalize economy and society, making it to bdcome one of the Southeast Asia’s economic hubs by 2030 with a GRDP per capita of US$13,000.
|Production inside Saigon Hi-tech park. Photo: Huy Khanh|
HCMC’s 11 th Party Congress for the 2020-2025 tenure set the vision for the city to become a smart city and play a pioneering role in promoting innovation for greater socio-economic development.
By 2025, the city expected its GRDP per capita to average US$8,500 and five years later, the figure would rise to US$13,000 as HCMC would transform into an economic – financial – trade hub in the Southeast Asian region.
The Party Congress’ resolution envisioned HCMC by 2045 to become a financial and economic hub of Asia and an attractive global city with GRDP per capita of US$37,000.
Given such ambitious targets, HCMC’s leaders identifies the necessity to revise the economic growth model for greater growth quality, along with a focus on promoting spearhead economic sectors of high added value.
Another key priority is to apply science, technology and innovation to improve productivity. In the next five years, HCMC would focus on the development of financial services, banking, tourism, trade, and logistics infrastructure, along with a shift towards production and exports of products with high technological contents.
Such moves are expected to help local enterprises better integrate into global supply chains and enhance the city’s overall competitivenesss.
Last December, the National Assembly in an unprecedented move approved the establishment of a city within HCMC, namely Thu Duc, by merging three eastern districts of 2, 9 and Thu Duc. These three districts’ combined GRDP in 2020 was higher than that of Binh Duong and Dong Nai provinces and made up one-third of the HCMC’s gross regional domestic product (GRDP).
The new Thu Duc city would develop based on the foundation of knowledge economy, with a strong focus on creating the growth driving forces for economy, education and healthcare.
Inside Thu Duc city, Saigon Hi-tech park is home for thousands of scientists and engineers to create products capable of competing on the international level.
Nguyen Anh Thi, head of the management board of Saigon Hi-tech Park said the growth rate of added value in products made at the park was estimated at nearly 18% as of late 2020.
Thi said for the 2010-2014 period, productivity was around US$114,000 per worker in the park, and US$292,000 for the 2015-2019, in which in 2019 alone, the productivity was US$373,000.
In the first 10 months of 2020, the combined value of technological products at the park was US$16 billion, accumulating nearly US$81 billion as of present.
Saigon Hi-tech park targets to have total investment capital of nearly US$11 billion by 2025, localization rate of 35%, and export value of US$30 billion, representing a growth rate of 10% per year.
Amid the Covid-19 pandemic, the hi-tech park has played a pioneering role in developing Covid-19 vaccine and putting Vietnam among a handful of countries having the capability to self-produce vaccine in the future.
As HCMC enters a new development period in 2020-2025, Thu Duc city would stay core in an overall effort to turn the city into a regional financial hub.
|Dam Nhan Duc, head of Research and Development of MB|
The Fourth Industrial Revolution has brought about significant innovations in banking and finance activities. Consumers are spending more and more time on online platforms using their mobile phones and personal computers. This rate has further increased as the COVID-19 pandemic broke out. This has given banks more favourable conditions to develop digital products and modern banking applications in order to attract customers. In recent years, banking apps in Vietnam have been ceaselessly updated, constantly launching new features. This shows Vietnamese banks’ relentless efforts in fostering digital transformation.
In recent years, the government has isssued a large number of decisive resolutions to promote digital transformation, such as Resolution No.1/NQ-P dated January 1, 2020 regarding the pilot institutional framework (sandbox), Resolution No.50/NQ-CP dated April 17, 2020 issuing guiding policies to actively participate in the Fourth Industrial Revolution, and Decision No.316/QD-TTg on the pilot usage of telecommunication accounts to pay for goods and services of small value.
|The increasingly rapid growth of the pandemic and the superiority of technology are the driving forces for organisations to stimulate digital transformation.|
Digital banking is a journey, not a destination. It requires a comprehensive strategy for change in all aspects, from business thinking to organisational culture.
Cashless payment not only helps improve the management efficiency of state administration authorities but also saves time and costs for citizens. To do so, developing mobile money and digital banking is a must. The increasingly rapid growth of the pandemic and the superiority of technology are the driving forces for organisations to stimulate digital transformation.
Vietnam is in its “golden population structure” with nearly 70 per cent of the population of a working age, 92 per cent of whom use smartphones. Yet, the proportion of population having bank accounts and mobile money apps remains low, especially in remote areas. Currently, only about 30 per cent of the population has a bank account and just 3.5 per cent has mobile money apps. The scale of online payments in Vietnam is estimated to reach $8.7 billion in 2025, nearly four times the size of 2017. This effectively means the potential to develop banking services in Vietnam is enormous.
In recent years, with their determination to change, as well as policy orientation from regulatory bodies, especially the State Bank of Vietnam, many Vietnamese banks have proactively innovated, transformed, and upgraded their information infrastructure to be able to fulfill customers’ demand on digital channels. Digital products such as QR payment, savings, digital loans and recently, electronic know-your-customer (eKYC), have been actively implemented by many banks.
Pioneers include MBBank, TPBank, and VPBank. MBBank was the first in Vietnam to establish a digital banking division, rolling out a series of traditional banking services on the MBBank App such as online loans in three minutes, digital savings, international payment, and recently, customised bank account number and launching a programme to match account number with the phone number of customers.
However, upgrading the technical infrastructure to digitise banking products is just the very first step in the digital transformation process. Based on the upgraded platforms of advanced technology, Vietnamese banks have been continuing to complete their digital ecosystem, which provides customers with the experience of diversified products and services, such as shopping, travelling, investment, or entertainment.
Pioneering banks such as MBBank or Techcombank are enthusiastically completing their digital ecosystems. In addition to conventional services like other banks, the MBBank App also allows users to shop, book airline tickets, play games, search for information, and receive financial management, securities, bonds, and insurance investment consultation online.
Digital banking is a journey, not a destination. It requires a comprehensive strategy for change in all aspects, from infrastructure to business thinking and organisational culture. This competition is not merely about technology but also concerns a change in the way of thinking and organisational culture at banks.
More specifically, the conventional “product-focused” business philosophy is facing many challenges, forcing banks to switch to a “customer-centric” approach and build a digital ecosystem that fufils customers’ need.
The process of digitising banking operations or building new ways of doing business in a digital environment requires considerably high levels of innovation and flexibility. This might also be a challenge for banks because banking is a risky business that prioritises prudence and compliance. Hence, banks need to come up with methods to nurture the creativity of their digital banking staff.
Requirements for digital transformation and steps to foster digital banking have been widely discussed. Many banks have shown no hesitation to invest large amounts of money and hire consultants to build up their system; others have managed to deploy digital banking systems by themselves. But at the end of the day, perhaps it is digital management that is the core in addition to other fundamental factors including business model, foundation, connection, technology, algorithm, data, and analysis. If banks have not made use of data inside and outside the bank into their business decision making process or turn them to become unique offering or special experience of customers, it is still at a very first stage of digital banking process.
Established in 1996 and joined by hundreds of Australian businesses, over the past years the AVBC has carried out numerous activities to increase connectivity, exchanges and investment opportunities for Australian and Vietnamese businesses. Besides its headquarters in Sydney, the council has opened its offices in Queensland and Western Australia and set up a network of international businesses that are ready to capitalize on skills, technology, and innovation capacity for stronger business ties between the two countries.
The council serves as an important bridge to help eliminate cultural differences and promote understanding between the two countries’ business communities, thereby facilitating their business and trade links, said Laurence Strano AVBC President and founder.
In the coming years, he stated the AVBC will focus on promoting cooperation between businesses of the two countries in areas such as digital technology, emerging technology, digital transformation, education – training, business development, public relations and media, sports, health care, housing and commercial project development.
Addressing the ceremony, Nguyen Phu Hoa, Vietnamese Deputy Consul General in Sydney and Head of the Vietnam Trade Office in Australia, noted economic ties between Vietnam and Australia have developed significantly over the years.
Despite the impact of the COVID-19 pandemic, two-way trade value hit over AUD10 billion (roughly US$8 billion) in 2020, increasing nearly 4% over the previous year, said Hoa.
In particular, he went on to say, the first three months of this year saw the bilateral trade value reach AUD3.4 billion, up 33.7% over the same period in 2020.
According to Hoa, Vietnam has signed 17 free trade agreements (FTAs) and joined many economic and trade cooperation frameworks with many countries and leading economic hubs in the world.
Investing in Vietnam, he said Australian businesses not only have the chance to access a market of nearly 100 million consumers, but also export their products to many parts of the world.