In Vietnam, over half of businesses have turned to digital platforms to adapt to the new context amid the Covid-19 pandemic.
Shawn Tan, economist from the World Bank’s Finance, Competitiveness and Innovation Global Practice, said the digital economy is becoming more important, especially amid the pandemic. “Digital technologies allow businesses to better adapt to the Covid-19 shock,” he said.
Vietnam’s economic transition from a middle-income to high-income economy requires growth based on labor productivity. Digital technology will be a tool for Vietnam to speed up corporate productivity, improve adaptability and develop new businesses.
Digital technology reduces information and transaction costs and provides goods and services more efficiently, with better quality and a larger customer base and new markets.
“Vietnam has a lot of potential to use the recovery process as an inflection point towards a model of greener, inclusive and competitive growth driven by innovation,” said Shawn Tan.
A report from a World Bank survey in Vietnam shows that, in 2020, about 48% of Vietnamese businesses turned to digital platforms in response to the pandemic. This increased to 59% in October 2020. Meanwhile, only 5% of firms invested in digital solutions and 7% reorganized product combinations.
When surveying the application of technology in Vietnam, the World Bank’s indexes found that “the use of 4.0 technology in Vietnam is still in an early stage”.
Vietnam to quantify digital economy
At the seminar on digital economic measurement.
At the seminar on digital economic measurement held by the General Statistics Office of Vietnam and the World Bank last week, Nguyen Thu Huong, director general of the General Statistics Office, said that measuring and quantifying the digital economy has important implications for Vietnam.
Jaffar Al-Rikabi, World Bank economist, said that measuring the size of the digital economy faces many challenges: digital economy is a new concept with many different definitions; problems related to data quality; difficulty of measuring the consumption of digital products; the value of data investment in a modern economy is difficult to determine; measuring the sharing economy, and the challenges in understanding how the economy works when companies benefit from cross-border operations.
Experience in the world shows that the digital economy can be measured by production or the user (measured by supply – demand). When we want to know the size of the digital economy, we measure production from supply. The supply is often involved in digital economic production and trade, such as the value of investment, employment, research and development. To examine the economic impact of digitalization on the larger economy and society (e.g., productivity and wages), it is necessary to examine the application of digitalization in the digital economy.
After exchanging experiences from a number of countries around the world, officials of the General Statistics Office said that measuring the digital economy is a technical problem and very complicated, especially because identifying and collecting information is still a new thing.
In some developed countries as well as countries that have identified digital transformation as a key industry, they have invested in information gathering to make decisions as well as investment direction for digital infrastructure and digital economy for economic development.
“Vietnam is choosing the digital economy as one of the top priorities. Therefore, we would like to have advice to be able to make decisions, especially to agree on how to understand and identify the current and forward-looking digital economy,” Huong said.