Enhancing the effectiveness of cross-border trade investment for Vietnamese enterprises

DNHN - The trend of shifting from traditional business models to digital platforms is becoming increasingly popular and is considered an effective solution to help enterprises penetrate and expand export markets.

In recent years, Vietnam has achieved significant economic development milestones by promoting openness, integrating into the global economy, and actively negotiating and successfully signing many bilateral and multilateral Free Trade Agreements (FTAs). However, the unprecedented negative impacts of the Covid-19 pandemic on the global economy, including Vietnam, have posed numerous challenges to two main pillars of global economic growth: trade and investment, as supply chains have been disrupted and international capital flows have encountered many obstacles.

In this context, along with trends shaped by the fourth industrial revolution, global digital transformation has been emphasized as a solution not only to overcome the limitations of the pandemic period but also as a long-term strategy to restore operational efficiency and boost business investment activities. Accordingly, the trend of shifting from traditional business models to digital platforms is becoming increasingly popular and is considered an effective solution to help enterprises penetrate and expand export markets in the context of Vietnam’s deepening integration with the global economy.

Digital transformation helps enterprises expand markets

Digital transformation in trade promotion activities is contributing to changing the perceptions and trade mindset of people and businesses, creating a sustainable and long-term bridge for trade activities, and meeting the development trends of the current digital economy era. The application of information technology and digital transformation is no longer an option but has become a mandatory direction for all organizations and businesses to adapt and seize new opportunities to maintain and expand markets. This is considered a new and effective trend in product promotion processes, as well as a "golden" opportunity to optimally exploit the values of cross-border trade and investment activities.

Digital transformation brings many new opportunities but also presents significant challenges for businesses, including high investment costs for technology applications; difficulties in changing business habits and practices; challenges related to the lack of internal human resources to apply digital technology; lack of digital technology infrastructure; lack of information about digital technology; and difficulties in integrating digital technology solutions. Regarding human resources, digital transformation also sets conditions for the commitment and understanding of business leaders and managers and employees, as well as concerns related to data leakage of individuals and businesses.

Moreover, expanding cross-border markets with digital technology also comes with specific legal risks, and businesses may face the risk of disputes due to limitations in verifying partners or the authenticity of exchanges and transactions, such as not meeting directly to negotiate contracts, sign cooperation agreements, or directly viewing production facilities and processes, conducting work through online methods, email, video calls, etc., during contract execution. This is also a topic discussed at many legal support forums that accompany Vietnamese businesses in expanding to international markets recently.

“3 Enhancements” and “5 Strengthening” in digital transformation and digital economy development

On April 24th, during the 8th meeting of the National committee on digital transformation, Prime Minister Pham Minh Chinh, Chairman of the Committee, urged ministers, sector leaders, and provincial party secretaries and chairpersons to increase their determination and take decisive action in implementing national digital transformation tasks, focusing on "3 enhancements" and "5 strengthening".

The "3 Enhancements" include: (1) Enhancing awareness of the position, role, and importance of digital transformation among every citizen, enterprise, and especially leaders; (2) enhancing capacity for digital transformation, viewing it as a key priority task for resource allocation; and (3) enhancing public-private partnerships, leveraging public investment to lead private investment, and mobilizing all societal resources.

The "5 Strengthening" include: (1) Strengthening the completion of the institutional framework, creating a comprehensive legal corridor to promote national digital transformation and digital economy development; (2) strengthening the development of digital infrastructure and platforms as crucial foundations for the digital economy; (3) strengthening innovation and entrepreneurship in digital transformation; (4) strengthening the development of digital workforce and skills to meet socio-economic development requirements; and (5) strengthening cybersecurity and information security to protect the legitimate rights and interests of citizens and businesses, safeguarding national cyberspace sovereignty from the outset.

Alongside government efforts to enhance legal, institutional, and policy frameworks to support economic integration, enterprises need to proactively update regulations, policies, and laws, and receive advice and consultancy to devise effective business strategies when entering the global market.

In recent years, the United States Agency for International Development (USAID) through the global initiative INVEST has been collaborating with the Vietnam International Arbitration Center (VIAC) to improve the ecosystem providing and promoting Alternative Dispute Resolution (ADR) methods in Vietnam. The joint project between the two entities has been and is implementing activities for professional exchange, sharing international experiences for leaders, judicial officials, and related stakeholders at central and local levels, including judges, court clerks, and arbitrators; at the same time, raising awareness for the business community about the benefits of ADR and improving digital infrastructure to deploy online dispute resolution services to further enhance the efficiency and flexibility of arbitration and other ADR methods.

Tien Dat