When digital becomes human the transformation of customer relationships

Renewing mindset to enter the era of innovation. Photo: Pham Hai

According to the Vietnam Internet Network Information Center, the number of domain names has reached 500,000; the “.vn” topped the national domain names registered in Southeast Asia, and was among the top 10 in Asia. – Pacific.

The Asia-Pacific IP address management organization, APNIC, said that Vietnam’s IPv6 application rate is about 40%, ranking 2nd in ASEAN, 8th globally, with more than 21 million Internet users.

Vietnam’s digital economic growth rate was the second fastest in Southeast Asia (38% in 2019, behind only Indonesia); the value of e-commerce transactions increased 81% per year in the period 2015-2019, according to Google, Temasek and Bain & Company.

Vietnam has actively approached opportunities from digital economy, built and completed legal corridors, and successfully deployed many applications of technology such as e-commerce floors, online travel, ride-hailing apps or e-wallets linked to domestic banks. .

The Covid-19 pandemic has affected many economic activities that are based on traditional platforms, forcing agencies and enterprises to be bolder in research and application of digital platforms in management activities, production – business, powerful application of e-forms such as online delivery, electronic payment, online teaching…

The government and businesses have generally adapted well to new economic models and activities; application of digital economy, and building of e-government, which developed robustly in recent years.

Before the Covid-19 epidemic, about 40 ministries and provinces were connected to the national data sharing and integration platform, official sources said. This figure is now about 70. About 50% of ministries, central agencies and localities have built their own platforms for data integration and sharing, higher than the rate of 27% in 2019.

Challenges for digital transformation

The shortage of high-quality human resources, especially human resources meeting the new requirements and skills in the context of the industrial revolution 4.0, is a problem for Vietnam.

According to the World Bank, the quality of human resources in Vietnam is 3.79/10 points, ranking 11th out of 12 countries surveyed in Asia. Meanwhile, South Korea was 6.91 points; India 5.76 points; Malaysia 5.59 points.

According to the report on “human capital” of the World Economic Forum in 2017, Vietnam’s ranking of skilled workers was in the low average group, at the bottom for intermediate skilled workers (128th/130), and 99th out of 130 countries for skilled workers at a high level.

The 2019 Global Competitiveness Index also showed limitations of businesses in terms of science, technology and innovation indicators. For example, technology cooperation and development between business and university ranked 67th/141; and the number of patent applications ranked 91st/141.

According to the General Statistics Office, in 2018, up to 76% of equipment, machinery and technology lines that Vietnamese businesses used were manufactured in the 1960s-1970s; 75% of the equipment were fully depreciated; and 50% of the equipment were refurbished.

The rate of modern machinery and equipment used in Vietnamese enterprises was only 10%, 38% was average and 52% obsolete and very out of date. The rate of using high technology was only 20%, while the criterion for industrialization and modernization is over 60% of new technology (It is 31% in Thailand, 51% in Malaysia and 73% in Singapore).

According to the Central Institute for Economic Management, investment in research and development (R&D) in Vietnamese enterprises is still low, only about 0.4% of GDP compared with 2.2% in Australia and Singapore, 2.1% in China and 1.3% in Malaysia.

The number of patents granted in Vietnam is the lowest compared to the number of patent applications. Self-reported innovation appears to be well below the normal level for Vietnam’s level of development, particularly in terms of product innovation.

Obviously, these shortcomings affect the development of the digital economy, although the opportunities are huge. To make a breakthrough, Vietnam has no choice but to accelerate science and technology, innovation and digital transformation.

Both the State and enterprises must proactively seize and take advantage of the opportunities of the 4th industrial revolution to develop the digital economy and digital society because this is a decisive factor to improve productivity, quality and competitiveness of the country.

Lan Anh

Vietnam aims to become a developed country with high income by 2045. What role will the science and technology sector play in turning this into reality?

All the industrial revolutions so far in history came from innovations and new technology inventions. For a long time, Vietnam stayed backward and poor because it could not take full advantage of the revolutions.

Mai Liem Truc, former Deputy Minister of Posts and Telematics

At the end of the third industrial revolution, while countries like India created a Green Revolution in biology, Vietnam still lacked rice. When Khoan 10 (household contracting) mechanism was applied, which allowed farmers to freely cultivate on their fields, Vietnam stopped the rice shortage period and became one of the world’s biggest rice exporters.

In the telecommunications sector, Vietnam grasped the technology trend in 1980s and took a daring move to skip analog technology and go straight to digital technology. This led to strong development in Vietnam’s telecommunications, with Vietnam among the countries that soon began applying digital technology.

However, it would be not enough if Vietnam only relied on technology and still maintained the natural monopoly. GPO made a daring decision on opening the telecom market to many different economic sectors despite controversy and certain obstacles.

So, you may see that science and technology is a foundation and important key to development. However, whether to effectively use the key will depend on institutions and people.

Which bottlenecks does Vietnam need to remove to develop the digital economy on the basis of science and technology, innovation, and the improvement of productivity, quality, efficiency and economic competitiveness?

Previously, we carried out renovation, market opening and global integration on the basis of natural resources and cheap labor force. However, these are the factors which now set limitations for us and force us to enter a new development stage with new technologies, especially digital technology.

The world is shifting to a 4.0 industrial revolution with the strong presence of digital technology and Vietnam has no other choice to become involved in the revolution. This, by nature, is a digital transformation process. This is a great opportunity for Vietnam to change rapidly and implement the aspiration of becoming a developed country by 2045.

To successfully be digitized, Vietnam needs to rely on three pillars. First, technology. Second, institutional mechanism. And third, human resources.

In terms of technology, Vietnam is behind other countries in heavy industries, mechanical engineering and material industry. However, the 4.0 revolution is intellectual technology which isn’t based on existing infrastructure.

The world is shifting to a 4.0 industrial revolution with the strong presence of digital technology and Vietnam has no other choice to become involved in the revolution. This, by nature, is a digital transformation process. This is a great opportunity for Vietnam to change rapidly and implement the aspiration of becoming a developed country by 2045.

We can see the strong development of many Vietnamese technology firms in recent years. Now we have nearly 50,000 digital technology firms and we expect to have 100,000 in the time to come. These will be the pioneering force in Vietnam’s digital transformation.

The second pillar – institutions – is the biggest problem that needs to be solved, or it will hinder the application of technology and innovation. The ‘institution’ here means legal framework.

It is necessary to convert the legal framework for a traditional physical environment to a framework for an internet environment.

Nowadays we talk about the role of data in digital transformation, but there exists the problem that data is not connected and shared. We still don’t have laws on data collection, storage and sharing, data protection and use, but we only have decrees to cover the issues.

Previously, Vietnam developed science and technology with reliance on the state. But now, the main subjects of developing science and technology are enterprises. Therefore, the policies need to be changed accordingly. Policy must be issued quickly to satisfy the requirements of development.

Regarding the third pillar, Vietnamese people have capability in digital transformation. Vietnam has a population of nearly 100 million, the 15th most populous country. It is a big market and a condition for robust development. Whether the digital transformation succeeds will depend on the leaders.

Do you believe that Vietnam will successfully grab this opportunity?

I do, but there are many challenges.

Our country has gone through a thorny path in history and many wars, so it has the desire to walk abreast with other nations in the world.

The country’s leaders believe that digital transformation will be the opportunity to realize the aspiration. Following a series of important decisions including the Politburo’s Resolution 52 about the 4.0 revolution, the Prime Minister has released a strategy on digital transformation.

Meanwhile, technology firms have captured the digital transformation trend and prepared their human resources. Moreover, Vietnam has a strong telecom infrastructure system and high number of smartphone users.

What would you say about the capability of Vietnam’s IT firms?

We have some economic groups which have reached out to the world market, such as Viettel, Vingroup and FPT. Other smaller businesses are also ‘going to the open sea’.

I believe that more and more Vietnam’s enterprises will join global value chains. Obviously, the country’s opportunity and mission is being put on technology firms’ shoulders.

Thai Khang