Digital economy needs supporting policies: experts

At a workshop themed ‘Policy Aspects for Vietnam Digital Economic Development’, held by the Ministry of Industry and Trade (MoIT) and the World Bank Group in Hanoi, he described cyber security’s crucial role in protecting customers as an important factor to develop Vietnam’s digital economy.

Enhancing digital skills for citizens should be priorities in the Government’s policies to ensure equal opportunities from the digital economy are offered to all, the official said, adding that education must be improved as well.

Deputy minister Cao Quoc Hung said the Fourth Industrial Revolution has created significant changes in technology, affecting world trade, economic growth and social progress.

Statistics have shown that cross-border e-commerce has created significant amounts of value in economic activities in recent years and is rising. Cross-border data transmission capability has created new business models, helping global GDP grow by 10 per cent in the past decade.

Today, half of the world’s population are connected to the internet, with one-third using social networks and 53 per cent using mobile phones.

The digital economy in Southeast Asia reached value of US$72 billion in 2018 and is expected to reach $240 billion in 2025. Digital was also forecast to account for up to 60 per cent of the region’s GDP by 2021, he said.

“Digital economy allows businesses in the region to integrate into the world and is suitable with long-term trends toward trade liberalisation and gradually removing trade barriers,” he added.

However, the Government, businesses and people would face challenges in realising the benefits of the digital economy. The challenges could be gaps in legal regulations and infrastructure, weak ability in technology transfer, socio-economic barriers, issues of trust, security and transparency.

“This is why the ministry considers building policies to support digital economy development a key issue,” Hưng said.

According to Dang Hoang Hai, head of the MoIT’s Department of E-commerce and Digital Economy, Vietnam has a total population of more than 96 million people, 64 million of whom have access to the internet.

Last year, e-commerce grew 30 per cent with total revenue from retail sales reaching $8 billion, and the figure is expected to surge to $13-15 billion by 2020.

Google and Temasek had a more positive view of Vietnam’s digital economy. In their e-Conomy SEA 2018 report, retail sales from e-commerce in Vietnam reached $9 billion last year.

Vietnam is third in the region after Indonesia and Thailand in terms of digital economy scale.

Meanwhile, Natasha Beschorner, Senior Information and Communications Technology (ICT) Policy Specialist at the World Bank’s Global ICT Department, said Southeast Asia offers a large market for digitally enabled businesses. Individuals across Southeast Asia are using the internet at world-leading levels for messaging, social media and browsing.

Vietnam is in a region where digital businesses are growing fast. There is potential for development, she said.

However, she said the digital economy does not mean internet access only, but it must integrate digital services of both Government and businesses, especially as cash is still the most common means of payment in Vietnam.

In addition, fast and cheap internet connectivity is not yet universal. Vietnam is progressing on mobile and fixed broadband penetration; but the digital divide still needs to be addressed.

She also said the Government should prioritise policies to promote online transactions and tax services to branch out the logistics sector, which plays an important part in the digital economy.

The digital economy skills gap is a concern and policies are needed in digital skills to build long-term foundations while also helping meet short-term requirements, she said.