In the first half of 2024, Vietnam’s digital economy growth has shown significant positive signs, contributing approximately 18.3% to the GDP, marking a 22.4% increase. This impressive performance indicates that the target set by the 13th National Party Congress to achieve a 20% digital economy by 2025 is within reach.
During the 9th meeting of the National Committee on Digital Transformation and the six-month preliminary conference on national digital transformation and the Government’s Project 06, the Minister of Information and Communications highlighted the key pillars for developing the digital economy.
Vietnam’s digital economy growth pillars
These pillars include the growth of the information and communication technology (ICT) industry, the digitalization of various sectors and localities, the development of data as a crucial input for the digital economy, and the advancement of digital governance as a new online and data-based governance method. The aim is to drive economic momentum and enhance the nation’s competitive edge.
The ICT industry has regained its growth trajectory, surpassing pre-COVID-19 levels with a 26% increase in the first half of 2024 compared to the same period the previous year. This substantial growth is partly attributed to a -5% growth rate in 2023, which set a low base for the subsequent year’s increase.
For the first time, Vietnam is drafting a dedicated law for the development of the ICT industry, known as the Law on the Development of the Digital Technology Industry. This law, expected to be approved by the National Assembly in 2025, underscores the government’s recognition of the digital technology industry as a foundational sector essential for promoting national digital transformation and economic development.
The digital technology industry, being the core of the digital economy, is projected to constitute up to 60% of the digital economy in its initial phase, before 2025. However, this share is expected to decrease to 40% or even 30% after 2030 as other sectors integrate digital technologies.
The digitalization of various sectors involves the convergence of digital technologies into fields such as healthcare, education, agriculture, commerce, and banking. This convergence not only modernizes these sectors but also creates new products, services, and business models, driving growth within each industry. The digital economy within these sectors is anticipated to make up 70% of the overall digital economy.
The Prime Minister has directed that in 2024, each ministry and locality should organize a specialized conference on the development of their respective digital economies. The Ministry of Information and Communications has issued guidelines on measuring the digital economy and promoting its growth at the local level.
Data development is viewed as a new production factor and a crucial input for the digital economy. Digital data is considered a new resource, generated by humans using digital technologies. For the first time in human history, development has led to the creation of a new resource: digital data. Government agencies, from central to local levels, are responsible for generating this data. The government recently issued a decree on developing national and ministerial databases.
To accelerate the growth of the digital economy, the rapid construction of these databases is necessary. The Prime Minister has instructed each ministry and locality to develop a plan similar to the Ministry of Public Security’s Project 06, focusing on creating core data for their respective areas. Furthermore, data should be treated as a commodity, with the Ministry of Information and Communications piloting a data exchange platform, particularly for corporate data, in 2024.
In terms of digital governance, the Prime Minister is overseeing the development of an action plan for establishing a digital government that operates and makes decisions online and based on data. This requires all ministries and localities to connect online with the government and transition their operations to an online, data-driven model.
This shift towards digital governance represents a fundamental change, allowing higher levels of government to directly access and use data from lower levels, ensuring accurate and timely management without the need for traditional written reports. Following the release of this action plan, there will be specific guidelines for ministries and localities to develop their own action plans.
In the first half of 2024, the total revenue of the Information and Communications sector is estimated at 2,030,729 billion VND, an increase of 24.5% compared to the same period in 2023, achieving 48.7% of the annual plan (4,166,517 billion VND).
The sector’s total profit is estimated at 143,501 billion VND, up 16% from the same period in 2023, reaching 47.4% of the annual plan (302,670 billion VND).
Contributions to the state budget are estimated at 44,829 billion VND, a decrease of 4.6% compared to the same period in 2023, achieving 44.1% of the annual plan (101,593 billion VND).
The sector’s contribution to GDP is estimated at 467,048 billion VND, an increase of 19.5% compared to the same period in 2023, achieving 47.6% of the annual plan (981,865 billion VND).
The total workforce in the sector by June 2024 is approximately 1,530,719, a 1.5% increase compared to the same period in 2023.
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