The Southeast Asian country announced with much fanfare this month that a test of fifth generation telecommunications technology, in the form of a phone call, was successful.
The call to test 5G matters, not just for the internet, but for Vietnam’s goal of building a digital economy.
That future economy could be filled with deliveries by drone, machine learning to detect cyber attacks, and digital health records — or the economy could stick to traditional businesses like agriculture and tourism, as a new government report lays out.
Vietnam’s Ministry of Science and Technology jointly launched a report on the digital economy with its Australian counterpart Wednesday, laying out four possible scenarios. Each scenario is at a different level of digitalization, depending on how thoroughly Vietnam adopts new technology.
“I request industries and provinces to improve their awareness of, and responsibility in, steering the science and technology development, and continue to strengthen the relevant legal and policy framework,” Prime Minister Nguyen Xuan Phuc said in a speech.
“It is critical to focus on the development of the national innovation system,” he added, “putting the businesses at the heart of this system while promoting the linkages among research institutes, universities, and businesses to create and accumulate intellectual assets to fuel economic development in a rapid, inclusive, and sustainable manner.”
In the report titled “Vietnam’s Future Digital Economy: Toward 2030 and 2045,” the four scenarios offer a blueprint for policymakers.
In the first option, the country reaches its full technological potential in the next two decades, with smart cities, high productivity, and high-skilled talent in an economy geared toward services.
In the second scenario, little has changed in that time, with the economy relying on cash and low-wage labor to export farmed goods and natural resources.
Those are the two extremes, while the two remaining scenarios fall somewhere in between, depending on whether Vietnam is more technology consumer or exporter.
“The next wave of digital technologies — artificial intelligence, blockchain, the internet of things, and platforms and cloud-based services — has the potential to transform Vietnam into Asia’s next high-performing economy,” said Lucy Cameron, the lead author of the report. “Vietnam will need to seize these substantial opportunities while carefully navigating a number of risks.”
There are signs the digital technology is already catching on in Vietnam.
Besides the research and development of 5G, companies are using robots in their warehouses, like the country’s largest dairy, Vinamilk, and DB Schenker, a German logistics firm operating in Vietnam. FPT, a domestic electronics business, used artificial intelligence to create a chat bot and made it available to third-party software developers. The gaming startup VNG is introducing virtual reality to its players.
It is not all good news. The rise of ride-hailing apps has been linked to a drop in the use of public transit around the world, and that is happening in Vietnam, too. Local press recently reported a decline in bus use, while the increase of ride hailing has led to clogged city streets.
Even in a best case scenario, there are four potential drawbacks to an increasingly connected Vietnam, according to the report, which is supported by CSIRO’s Data61, the data and digital specialist arm of Australia’s national science agency. They include more threats to cyber security, higher borrowing to fund infrastructure and technological spending, a shortage of technical talent, and reliance on external companies for products and services.
How far Vietnam takes its technological evolution, of course, is up to Vietnam.