Public-private cooperation to promote digital economy

In order to develop the digital economy and avoid monopolies, the Government should promote the investment process of information technology infrastructure with the cooperation of state-owned and private enterprises.

Much investment costs slow down the digital transformation process

The 2022 Vietnam Economic Annual Report with the topic "Enhancing the digital foundation for the service industry" published by the Institute for Economic and Policy Research (VEPR) at the weekend that Covid-19 pandemic has made 69% of Vietnamese enterprises have to temporarily suspend their operations, most of which are small and micro enterprises. The service industry’s jobless rate is over 50%; The accommodation, food, and tourism services are the hardest hit by the pandemic. Only 4% of enterprises can maintain their operation.

Dr. Nguyen Quoc Viet, Deputy Director of VEPR said that Covid-19 caused the traditional business activities severely affected, this pandemic, however, not only did not reduce the digital economy, but also create pressure and driving force to boost the enterprises and the government to transform.

Digital transformation is not only a temporary countermeasures during the pandemic, but also continues to be part of enterprises during the "new normal"period.

The survey result of Base.vn shows that more than 60% of Vietnamese enterprises intend to continue to combine remote working and working at the office; More than 77% of enterprises choose to deploy a combination model of online and on-site business after Covid-19 epidemic has brought opportunities for enterprises to boost the digital transformation, such as participating in sales on e-commerce platforms, developing online channels, and non-cash payment.

The result of a few surveys conducted by the United States Agency for International Development (USAID) and the Ministry of Planning and Investment in 2022 with more than 60.1% of enterprises participating in the survey saying that they encounter when applying digital technology is the cost of investment and technology application. This is also the biggest barrier to slow down the digital transformation process of enterprises.

According to the 2021 statistics from the State Bank, up to 95% of credit institutions has been developing and implementing the digital transformation strategy. The investment for digital transformation is estimated at up to VND 15,000 billion a year; the cost of resource investment in digital transformation activities accounts for 20-30% on average of the total investment and operation costs of 10 big commercial banks.

There of, many banks are engaging in more than 90% of transactions carried out on the digital platforms. The presence of Fintech companies also promotes the financial - banking market in the digitization process.

The cooperation of the Government and enterprises are required

Said Dr. Vu Tien Loc, Chairman of Vietnam International Arbitration Center, all digital transformation issues in documents, resolutions, action programs... are being approached in a very narrow sense.

“It seems that we are industrializing the digital transformation field, considering information technology (IT) as the pillar, the measure of that process is not correct," said Mr. Loc.

Dr. Vu Tien Loc also emphasized that the digital transformation core is to change the economic management model and the corporate management model. “If the current administrative procedure background or minor improvement are maintained and have them be online, their affect won't be much. Or as the corporate business model has not changed, there is no any circular economy, green economy, sharing economy... but digital technology application is not significantly effective," analysed Mr. Loc.

Taking solutions, VEPR's research team said that, in terms of infrastructure, the Government should promote the investment in IT infrastructure. Particularly, the Government should promote this process through the cooperation between state-owned enterprises and the private sector, prevent from exclusivity status that are likely to occur in the digital economy, as the high requirement of fixed costs and network clustering effect.

In terms of human resources, it is necessary to improve the employees’ digital literacy and skills by enhancing IT education and training at all levels of education. In addition, it is necessary to promote both formal and informal IT training programs, to diversify training methods to serve many subjects in the society, and help the working employees take the opportunities to study and drill their skills.

On the other hand, Vietnam should improve the legal framework on the digital economy, improve the protection ability of digital service users such as promulgating a protection law of personal data, building a network space insurance market to help enterprises get financial support when there is any problem.

For enterprises, VEPR believes that enterprises should develop the strategies, invest the resources (especially financial resources) and build a digital transformation roadmap; enterprises can identify digital transformation activities and areas first; improve the enterprise leader’s digital business awareness, thinking; improve employees' digital literacy and skills.

Said Mr. Nguyen Minh Cuong, chief economist of the Asian Development Bank (ADB), digital transformation is only the administrative reform supporting tool. "If administrative procedures are still complicated with thousands of sub-licenses, digital transformation is impossible to be taken place," said Mr. Cuong.

Said ADB expert, it is necessary to determine that digital transformation is not a movement, but an inevitable market trend should be applied to promote the growth in the coming time.

Source : Baodautu