Ushering digital strategies to improve Vietnam’s social sector and lives

“Never before has it been a better time to go digital”, said everyone from the start of the pandemic and we all saw a meteoric rise in digital uptake in our daily lives. Representatives of Vietnam Government have announced digital governments by 2025. Government’s reliance on digital tools during COVID brought many people to access and use their tools for information and welfare. One could say that this digital infrastructure created has increased trust on ICT tools to enhance people’s mobility, capacity and access to resources. Reluctance to go digital prior to 2020 as a result of fraud, illiteracy and need for privacy etc. has been replaced by risk for convenience and lack of choice during COVID -19.

Vietnam was one of the countries in the world to grow at 2.9 % in 2020 showing remarkable resilience to COVID-19. According to World Bank, the economy will grow in 2021 at the back of strong export-oriented manufacturing and recovery in domestic demand. With the total telecom subscription of 150% of the total population and 148.8 million mobile subscribers in 2020, Vietnam has come a long way during the pandemic. Covering over 93% of the adult population in 2020, Vietnam is one of the fastest growing smartphone markets.

As we scope the digital economy, we see that there is core score which include the IT/ICT services, the digital economy and then a digitized economy. Internet penetration has doubled in 2020 since 2012 with over 68.17 million users and in 2020, 41% of all digital service consumers were new. A research paper says that a very large majority of these new users will continue their behaviour online. Thanks for improvements in digital infrastructure. The quality of Vietnam’s digital infrastructure is also commendable. Over 90% of the population has access to 3G/4G connectivity.

We look at four important Vietnam’s social-sector segments and their growth through digitization. These sectors provide services that cover for the basic psychological needs of the people and in turn impact on standard-of-living of people.

Health and Diagnostics

Vietnam leads in healthcare coverage as compared to its regional counterparts. This could only indicate that the country is largely health conscious and looks forward to quality in healthcare. Vietnamese’ health expenditure contributes to a large portion of the country’s GDP. Digital solutions to healthcare can reduce costs and resources per patient. The socialist government has promised that by 2025, 95% of its citizens will have digital medical records and the project pilot is ongoing in 24 provinces.

Vietnam embraced digital tech in healthcare through telemedicine, hospital information system, mHealth. There are four digital health segments in focus during the early stage of digital health development in Vietnam – Health Information Technology, Telemedicine, Consumer Health Electronics, and Healthcare Big Data and AI-based products and services.

Of the country’s working-age population, nearly half are under 40 years of age. This is favourable for the adoption of innovative science and technology. Government regularly posted information on policy, control measures and chronology of daily COVID cases numbers on its website. Essentially this pushed digital uptake and reliance than ever before. The govt. has also introduced trackers and assistance in diagnosis and treatment.

Higher Education

In the wake of the pandemic in 2020, telecom operators – Viettel, VNPT, Vietnamobile and Mobifone agreed to provide free mobile data for students, teachers and parents if they were using e-learning methods. Vietnam government recognises that access to higher education and vocational training is imperative for its economic growth. The country currently absorbs only 37% of the under-25 years population into its education system. Vietnam’s e-learning prospects are expected to grow at a CAGR of 18.3% during the forecast period 2019-23.

The government has set aside US $415 million from state budget in the ICT sector. The govt. is also looking for firms to support and sponsor education technology infrastructure, internet connection and software. The government has itself shared thousands for e-lectures and videos including research works. The government also focuses on internationalisation through scholarship programmes. Although English education is not strong portfolio in Vietnam education system, the mobile degree-seeking Vietnamese students are currently opting for English-speaking Western countries for their higher education.

Formal Banking

There are more than 90% of the internet users within working age 16-64 years, however over 70% of people within that age bracket have no bank account. Cash still seems to be primary means of transaction. As of 2019, there were only 3.98 commercial bank branches and 26 ATMs per lakh adults. Financial literacy is low in Vietnam based on an Asian Development Bank report.

While all these are barriers, the online product or service purchase penetration in Vietnam has doubled in four years from 37% to 75% in 2020. In This could indicate that there is increased trust on online transaction and this behaviour has driven access to these some digital financial services. In 2019 US $8.52 billion was the online transaction value collectively by over 50 million people. Millennials are the biggest target consumers for this market segment.

Today, a household could have a single bank account and the rest of the members would transact with digital wallets, literally with no physical wallet but intra-distribution of funds. Could this practice be the reason for low banking uptake.

Skilling and Entrepreneurship

Vietnam needs to upskill its labour force, which is rapidly shifting with agricultural workers transitioning into industry and services every year. The number of enrolments of entrepreneurs on online commerce sored high even as they faced competition. The overall visits to shopping apps in Vietnam was 12.7 billion and was growing rapidly at 43% quarter-on-quarter. Digital entrepreneurship was also on a rise with the National Public Services Portal receiving over 150% increase in traffic between January to march.

Vietnam lacks the advanced digital skills as the country is in the nascent stage of adoption of ICT software and systems. Being a regional leader in math and science education in primary and secondary schooling, Vietnam might have an edge over other countries to improve its citizen’s ICT skills.

From being one of the poorest economies in the world post-war in 1975, Vietnam with its socialist policies in economic and political reforms has come a long way in becoming one of the fastest growing markets competing with the likes of China. This only shows to say that Vietnam governance has the foresight to overcome economic shocks such as the recent COVID-19-led impacts on the economy. Digitization of has been one of the frontrunners today to enhance the social indicators. The citizens are also warming up to digital solutions and incorporating these solutions to their daily lives. A fully-digitized future for Vietnam is not very difficult to imagine in the next decade.



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