Digital technology as the “key” to progress

In 2024, Viet Nam’s digital economy contributed more than 18% to GDP. It is projected that by the end of this year, the digital economy will reach 20% of GDP, equivalent to approximately 120–130 billion USD. The digital economy’s structure in Viet Nam comprises three main sectors: the digital technology industry (making up 50–55%, primarily from software exports and IT services); financial technology and other digital services (accounting for 30–35%, driven by the boom in e-payment and digital platforms); and e-commerce (contributing nearly 10%). According to the 2024 e-Conomy SEA report by Google, Temasek, and Bain & Company, Viet Nam’s digital economy is maintaining an annual growth rate of 15–20%, significantly outpacing overall GDP growth.

As one of the first provinces and cities nationwide to launch a Digital Transformation Programme and a Smart City Development Plan, Ho Chi Minh City aims to become Viet Nam’s largest digital economy hub and a regional leader in Southeast Asia by 2030. For many years, the city has identified science and technology, innovation, and digital transformation as the main engines of development. Artificial Intelligence (AI), big data, IoT, 5G, cloud computing, and semiconductors are the priority areas of investment. Notably, the city has launched the “1-4-1” strategy including 1 — building an international financial centre in Ho Chi Minh City; 4 — developing multi-purpose high-tech centre (focusing on AI, big data, smart cities, and innovation), a high-tech industrial park, high-quality education, and high-quality healthcare; 1 — a strategic infrastructure system (with priority given to synchronised modern transport and digital infrastructure).

In 2024, the digital economy accounted for 22% of Ho Chi Minh City’s GRDP. The goal for 2025 is to reach 25%. The city’s greatest strength in boosting digital economic development lies in its leading number of digital technology businesses and its vibrant startup and innovation ecosystem. The city has been tasked with becoming Viet Nam’s foremost digital economy centre, with digital economy indicators expected to exceed the national average by 5–10%.

At the end of 2024, the Politburo issued Resolution No.57 on breakthroughs in science, technology, innovation, and national digital transformation. Digital technology is defined as a strategic key to help Viet Nam overcome the middle-income trap and build a resilient, globally competitive economy. According to Prof. Su Dinh Thanh, President of the University of Economics Ho Chi Minh City, while the development of digital technology requires substantial investment, it also necessitates institutional reforms in legal and policy systems. These reforms must both ensure effective state management and unleash creative resources, decisively moving away from the mindset of "banning what cannot be managed".

New policies to seize opportunities

According to Lam Dinh Thang, Director of the Ho Chi Minh City Department of Science and Technology, the three key elements driving the growth of the digital technology industry in the current phase are policy, infrastructure, and human resources. The most pressing challenge today lies in the inadequacies of guiding documents subordinate to laws and resolutions. The lack of breakthrough policies in such a rapidly evolving field as technology creates major barriers, making it difficult for even willing organisations and enterprises to proceed.

Thang also said that Viet Nam needs many new laws specific to this sector. Furthermore, when amending existing laws related to the digital economy, such as those on taxation, land, and the state budget, they must be revised in a synchronised manner to ensure real, practical value.

“Cross-border data is also a crucial issue if we aim to attract strategic investors in digital technology industries. Recently, many large enterprises have come to Ho Chi Minh City to explore the possibility of establishing large data centres, but some of them have ultimately shifted to countries such as Indonesia, Malaysia, or Thailand. One reason for this is that Viet Nam’s legal framework on data remains inadequate,” Thang added.

The recent surge in AI presents a wealth of opportunities for the digital economy. However, according to recent data from the Institute for Policy Studies and Media Development (under the Viet Nam Digital Communications Association), the rate of AI readiness among Vietnamese enterprises fell from 27% in 2023 to just 22% in 2024. The level of AI adoption, even on a trial basis, remains low compared to global standards. The main cause continues to be regulatory barriers and an outdated legal framework. “Risk management policies that are balanced with AI development policies are needed. Risk control requires defining this technology based on specific technical characteristics and clearly outlining the roles of stakeholders across the AI lifecycle. Currently, the classification of AI risk levels is still unclear, posing considerable challenges for businesses,” said Nguyen Lan Phuong, Principal Investigator of the digital technology research programme at the Institute for Policy Studies and Media Development.

A representative from the Legal Affairs Department under the Government Office stated that relevant authorities are currently reviewing hundreds of legal documents and plan to amend or supplement them between 2025 and 2026 to better reflect the realities of science and technology and digital transformation activities, including accepting risk, venture capital, and delays inherent in research. Priority will be given to applying scientific advances in socio-economic activities to enhance productivity and economic efficiency, and to meet public and societal needs. The government will also introduce more mechanisms and policies to enhance smart production capabilities and develop digital technologies aligned with the “Make in Viet Nam” orientation, promoting a shift from assembly and outsourcing to domestic design, production, and innovation.