Need to change the mindset to invest more in science, technology and innovation
The government always requires digital transformation and innovation in the new phase and this policy is receiving a great consensus from different agencies: business community as well as scientists. However, a number of issues still exists and must be addressed.
Minister of Planning and Investment Nguyen Chi Dung, the “Chief of Staff" in socio-economic development policy formulation, has repeatedly affirmed that in the long term, Vietnam determination is to implement the policies of innovation, reform and development, proactively and actively restructure the economy towards improving productivity, quality, efficiency and competitiveness of the economy, considering creativity and innovation is a driving force and the key to growth and sustainable development.
Mr. Nguyen Chi Dung said that businesses need to be aware of the role of innovation and must do digital transformation early. The Ministry of Planning and Investment has developed an ambitious program for 800,000 Vietnamese businesses to apply digital transformation, thereby improving productivity, quality, and competitiveness for all types of large, medium and small enterprises.
Minister of Information and Communications Nguyen Manh Hung, former head of Viettel Industry and Telecommunications Group, stated that digital transformation is the next development of information technology application, and is a breakthrough development.
“It changes the way we operate our work and life. The more we use it, the cheaper it gets and the better we are. With the continuous development of technology, left behind countries will have effective and fast application of the new technology than countries which are using previous technology. Digital transformation can make the poorest places accessible to the best services at very low prices. Every individual, every household, every small business can access the national and global market that allows to promote people to do business and get rich...”, the Minister spoke at the Conference meeting with localities at the end of 2020.
He also recommended that ministries, branches and localities should choose “the breakthrough” in the next term is technology, especially digital technology, bring digital technology into every corner of the economy and society. Minister Nguyen Manh Hung mentioned that the the year 2020 has marked the first time Vietnam has officially announced the orientation of digital technology business development, the strategy of "Make in Vietnam". The number of digital technology businesses has increased by 28%, reaching nearly 60,000, and this force is already to participate in digital transformation programs.
When it comes to digital transformation and innovation, the regulations and policies is the first issue mentioned. Because it is still new in Vietnam so the specific mechanism has not yet described. “The first thing the State does is digital transformation for new business models”, the Minister of Information and Communications raised the issue. The Government has a sandbox policy new products, solutions, services, business models, technologies, such as: sharing economy, night economy, smart city... to promptly meet the development requirements of the economy.
Assisting the Prime Minister in monitoring and directing the fields of science and technology, information and communication, Deputy Prime Minister Vu Duc Dam has repeatedly spoken at many forums about the role of innovation and digital transformation, information technology application...
“If all Vietnamese people have smartphones, basic public services installed, along with promoting mobile and online payments, then the whole society will change. This is an opportunity and also a historic impetus for the information technology and telecommunications industry”, Deputy Prime Minister Vu Duc Dam spoke at the conference on implementing tasks in 2021 recently organized by the Ministry of Information and Communications.
With a population of 100 million people, we can 'incubate' technologies and solutions of Vietnamese people before reaching out to the world”, said the Deputy Prime Minister.
The eagle take-off model of the National Innovation Center (NIC) at Hoa Lac Hi-Tech Park, Hanoi, started January 9, 2021 will contribute to bringing Vietnam to the world
However, it must be conceded that there are still many barriers to digital innovation and transformation in Vietnam. Prime Minister Nguyen Xuan Phuc said that Vietnam’s spending on science and technology development remains very modest, including both the State and private sectors, accounted for just 0.44 percent of Gross Domestic Product (GDP), much lower than the world average of 2.23 percent. Vietnam is lagging behind in terms of technology preparedness, innovation and labor productivity compared to many of its neighbors in Asia, such as China, India, Thailand, Malaysia and Singapore.
Mechanisms to stimulate the creativity and dedication of scientists and experts has not built. The legal corridors and mechanisms are inconsistent, lack of incentives for science and technology development and application”, said the Prime Minister.
Therefore, to promote innovation and digital transformation, there is still a lot of work to be done. According to the Vietnam Chamber of Commerce and Industry (VCCI), the rapid development of the digital economy is a positive shift for Vietnam's economy and society. This is also the reason that the "Report on Business Law Flow" has just been published by VCCI which reserves a separate chapter on the legal framework for digital economy.
However, a number of issues arose and the State's intervention was needed to make the economy operate more efficiently and reduce negative impacts on society.
The role of the State in building and ensuring effective implementation of legal corridors for the digital economy is crucial. Providing reasonable, feasible and fair regulations will help create conditions for a fast, sustainable and healthy digital economy development. On the contrary, an incomplete legal framework, mechanisms and policies are holding back economic development and failing to inspire innovation, failing to catch up with the speed of digital transformation of the region, especially the ASEAN region and the world”, the Report on Business Law Flow in 2020 stressed.
In addition, Vietnam young enterprises of innovation and startup need an environment to experiment with innovative ideas and develop products in the domestic market, then expand to regional and global markets.
According to legal expert Nguyen Minh Duc from the Legal Department of VCCI, there are still many issues that need to be addressed to complete the legal framework for digital economy, such as investment issues, protection of intellectual property for digital economic development, censorship of information content in the network environment, protection of user data, taxation, financial technology testing mechanism...
In some sectors, businesses need to invest a big funds and long period of capital recovery while policies are likely to change quickly. But in other sectors, enterprises making creative products, new ideas they need particular or catch up policies, the State regulations don’t meet that requirements. The law-making mindset needs to be changed drastically, because if we keep using the tools of prohibition, permits and imposing administrative orders, we will not be able to develop at a higher level”, Mr. Nguyen Minh Duc shared.
For example, the user data protection issue raises a balance between privacy and the need to prevent breaches of the law; the auction for the use of frequency needs to ensure competition in the market… “Regarding online content censorship, if it is executed excessively, it will lose users, if not censorship, the malicious information will be rampant. Meanwhile, small businesses have difficulty in developing filters”, Mr. Duc gave an example.
Dr. Nguyen Dinh Cung, a member of the Economic Advisory Group of the Prime Minister, said that if we want to renew the growth model, it cannot be implemented verbally or by a manifesto, mindset and institutional reform is of the esscence. If we are not able to do so, then 10 years later we will not be able to break through and even in the next decade we will not achieve the same growth rate as the last period.
From the groundbreaking event of the National Innovation Center building, Mr. Cung expects that the Center operates effectively and spread strongly in the formation of an innovation ecosystem, connecting with other actors of the innovation ecosystem in Vietnam and connecting with foreign countries. “Innovation lies in thinking and policy. The innovative ecosystem is not just placed in a building”, noted the expert Nguyen Dinh Cung.
Restated Prime Minister Nguyen Xuan Phuc's statement at the above event that "if we do not make bold investments in science, technology and innovation, the country will become stuck in a low productivity, low added value and our own middle-income trap”. Mr. Cung reckoned there are a lot of things need to be done to promote innovation, digital transformation to bring the economy into a new and higher stage in terms of quality.