Digital economy offers new growth driver to Ho Chi Minh City

DNHN - The digital economy is positioned to become a new growth driver of Ho Chi Minh City in the future with many advantages. But the city is also facing various challenges in its development strategy, especially human resources, policy and infrastructure.

Research by the Ho Chi Minh City Institute for Development Studies (HIDS) shows that the size of the city’s core digital economy was estimated at 8.27 billion in 2021, accounting for 14% of its overall economy, and the figure is expected to rise to 15% this year. There are strong grounds to anticipate that digital activity will contribute 25% of Ho Chi Minh City’s economy by 2025 and 40% by 2030.

The city’s push for digital economy is a big opportunity for both IT and non-IT companies as both costs and workforce will be reduced when digital technologies are adopted into management, which will enhance their competitiveness, especially in comparison to foreign enterprises.

According to experts, the digital economy not only contributes to growth but also helps raise labour productivity, create new business opportunities and optimise the economic structure, thereby helping the city to record rapid and sustainable growth while aiding its citizens in becoming wealthier in the future.

Such an affirmation is made on the basis that Ho Chi Minh City is the cradle of the country’s science and technology, with many favourable factors to promote the digital economy, especially human resources, IT firms and the largest digital transformation database in Vietnam.

The city is also a leader in smart application in various fields, including e-government building. In Ho Chi Minh City, emerging digital technologies such as blockchain, artificial intelligence, big data and the Internet of Things are expected to make huge leaps in industrial infrastructure while simplifying supply chains and logistics services. However, according to Associate Professor Nguyen Quang Trung at RMIT Vietnam, alongside drawbacks in human resources and digital infrastructure, enterprises are also facing many other difficulties, especially among small and ultra-small ones.

Furthermore, corporate management is largely outdated and does not meet the requirements of leading enterprises in supply chains. Their innovation capacity is also limited. Such challenges have affected enterprises’ productivity, competitiveness and the ability to transform their business models, and have become major obstacles to their integration into global value chains.

According to Professor Nguyen Thi Canh at the Ho Chi Minh City University of Economics and Law, although the city has created an initial legal framework for the development of the digital economy with several programmes and schemes, the specific policy to attract human resources remains inconsistent and has not yet met the development requirements. The workforce, the pillar of the digital economy, is not strong and the level is not uniform across the board while the development of digital technology and infrastructure is faced with limits in institutions and financial resources.

She stated that the city needs to pay attention to human resource training in e-commerce and information technology for state management, services and industrial production, as well as human resources for digital finance and banking, and financial technology.

According to HIDS Deputy Director Pham Binh An, in order to promote the digital economy, the city has set out tasks on enhancing digital awareness; developing digital infrastructure, platforms, data and applications; promoting new business models; supporting innovation and building the digital ecosystem for enterprises; and enhancing the efficiency of state management in digital economy development.

The city will also prioritise digital transformation in the ten sectors of healthcare, education, transport, finance-banking, tourism, agriculture, logistics, the environment, energy, and human resources training. The city aims to expand broadband coverage to 95% of households and 100% of communes by 2025 and the entire city by 2030.

According to Professor Jason Potts at RMIT Vietnam, Ho Chi Minh City has an edge in human resources compared to other localities, but the quality and structure of its workforce has not met the requirements of the current digital economy.

Therefore, in order to promote digital economy and smart city development, the city needs to formulate a plan on human resources development for the digital economy, in which it its necessary to reorganise city-run vocational facilities and classify training facilities of sectors that the government should invest in to support the development of the digital economy.

Source NDO