Dr. Can Van Luc emphasized that with the digital economy, the consistent view is a ‘balance between openness and risk control’. It is necessary to be open to creating timely development, not to miss opportunities, and even to be a pioneer in some fields. However, there is also a great need for effective solutions to prevent and address all potential risks that could have a negative impact on all aspects of economic and social life.

Dr. Can Van Luc added that artificial intelligence brings many great benefits, but it is not coincidental that Europe is rushing to prepare an AI law and China is also researching to soon issue a similar law.

The digital economy is growing rapidly around the world, presenting both challenges and opportunities for Vietnam to leverage its economic development in the context of global integration. However, according to economic experts, there should be effective solutions to prevent and address all potential risks that could hurt all aspects of economic and social life.

Measuring the Digital Economy

According to the National Committee for Digital Transformation, 2024 is the year of digital economic development with four pillars of information technology (IT) industry, digitalization of economic sectors, digital governance and digital data. In 2024, the total contribution of digital economy components to GDP is expected to reach around 19 percent and is projected to account for over 20 percent of GDP in 2025.

In the previous years, from 2020 to 2023, the General Statistics Office of Vietnam reported that the digital economy accounted for 12.66 percent to 16.5 percent of GDP. This ratio for Vietnam is far lower than that of China and Singapore.

According to the latest data, China has estimated that the share of the digital economy in GDP in 2019 and 2021 was around 30 percent and 40 percent respectively while the share of the digital economy in Singapore's GDP in 2022 was 17.3 percent.

General Director Nguyen Thi Huong of the General Statistics Office said that due to the lack of a common global guideline for measuring the contribution of the digital economy to growth, the scope and methods of measuring the digital economy in countries around the world are not uniform, leading to different outcomes in calculating the contribution of the digital economy to GDP in different countries.

However, while in 2019 the digital economy only contributed to the Vietnamese economy by about 5 percent with US$12 billion, it substantially contributed to 16.5 percent of GDP by 2023 achieving a growth rate of over 19 percent per year, which is about 3 times the GDP growth rate.

With its enormous potential, the digital economy is expected to be a key driver of new growth in 2024, a breakthrough year in the implementation of the 2021-2025 socio-economic development plan.

According to economists, the digital economy (encompassing the core digital economy - the input of the digital economy; and the application of the digital economy to other sectors - the output of the digital economy) has a higher proportion in core digital economic sectors compared to the application of the digital economy in other sectors, nearly 1.5 times higher.

That explains why 10 localities including Bac Ninh, Thai Nguyen, Bac Giang, and Vinh Phuc led the pack; followed by Hai Phong, Hanoi, Ho Chi Minh City, Da Nang, and Ha Nam had a higher proportion of the digital economy's value-added in GRDP compared to the national average between 2020 and 2023. These localities have all been strong magnets for foreign direct investment (FDI) in core digital economic sectors - the production of electronic products, computers, and optical products.

Starting with the right perception

In line with the policy of proactively participating in the Fourth Industrial Revolution, by 2030, the digital economy is expected to account for about 30 percent of GDP. However, not all localities have the strengths to develop the core digital economy.

Moreover, the planning orientation of economic centers such as Hanoi, Ho Chi Minh City, and Da Nang is focused on developing services, especially high value-added services such as finance, banking, insurance, and tourism. Meanwhile, other localities have more space to develop manufacturing activities. Therefore, the digital economic development models of localities may not be the same.

In some localities, activities in the digital economy mainly involve expanding the application of the digital economy to areas with strengths and to management and operation activities. In these areas, the proportion of the digital economy in agriculture, forestry, and fishery is still very low, and there is a need for a strong shift from small-scale agricultural production to the digital agricultural economy. The urgent application and expansion of the digital economy to this sector is needed, while the proportion of the digital economy in industry and construction is higher due to the concentration of the core digital economy in these sectors.

Through initial observations, the proportion of the digital economy in the service sector is currently the highest, but it is also the sector with the most room for diverse applications of the digital economy, especially for some sectors with a low proportion of the digital economy, such as veterinary medicine, social assistance, concentrated care and nursing, pollution treatment, and waste management.

Perhaps, the first biggest challenge in applying the digital economy in particular and developing the digital economy in general is the perception of the digital economy, an important, new, difficult, and highly knowledge-intensive issue. For example, to create a breakthrough development in this field, it needs three pillars namely digital infrastructure, a digital data warehouse, and people with knowledge of digitization. In particular, the requirement for a complete, easily accessible, highly connected and interconnected digital data warehouse can give rise to certain IT and cybersecurity risks.

Minister Nguyen Manh Hung of Information and Communications said that the government needs more creative approaches. Digital transformation is a strategic choice, a path to lead Vietnam to strength and prosperity. Over the past four years, the country has seen the way forward and has achieved initial results. Now is the time to act more strongly, more decisively, to create more practical, more comprehensive results for residents. Other countries are also undergoing strong digital transformation; therefore, without more determination and creative approaches, Vietnam will again fall behind.

Mr. Truong Gia Binh, Chairman of the Board of Directors of FPT Corporation, stressed to focus human resources and financial resources on key technology areas. To exploit the potential of digital transformation - green transformation and create dual development of both the digital economy and the green economy, Vietnam needs to take the lead in developing fields such as artificial intelligence, semiconductors, smart electric vehicles, and green transformation. It is necessary to focus human resources and finance on these key technology fields.

Senior Digital Expert at McKinsey & Company Matthew Francois said that digital economic sectors can bring many benefits to Vietnam. E-commerce transactions are increasing; the healthcare, education, and finance sectors are supported and strongly promoted by digital infrastructure. This is an opportunity for Vietnam to use digital transformation to enhance its national competitive advantage; increase labor productivity, and create new growth spaces for the business community.