Vietnam, a country traditionally known for its vast rice fields and agricultural exports, is undergoing a remarkable transformation as it embraces the digital age while simultaneously pursuing sustainable development. This dual approach, often referred to as the “Twin Transition,” encompasses both digital transformation and green transition, positioning Vietnam as a rising digital powerhouse in Southeast Asia. Vietnam is currently navigating a significant transformation, transitioning from an agrarian economy primarily focused on rice production to a burgeoning digital economy that aspires to compete on a global scale.
The Transformation Journey
In recent years, Vietnam has recognized the necessity of digital transformation to enhance productivity and foster innovation. The government has implemented a “National Strategy for the Development of Digital Economy and Digital Society by 2025,” which aims to accelerate the adoption of digital technologies across various sectors. This strategy is not merely a response to global trends but a proactive measure to harness the opportunities presented by the Fourth Industrial Revolution.
Digital transformation offers significant opportunities for Vietnam to maintain rapid and sustainable growth. According to Dr. Nguyen Van Binh, a member of the Politburo and Chairman of the Central Economic Commission, strong leadership and robust institutions will be key in the development of Vietnam’s economy, particularly in the corporate sector, including the private sector. Digitalization driven by strong leadership can overcome obstacles and further economic development. In the long term, digital transformation is expected to help Vietnam surpass middle-income status and achieve high-income status.
Embracing Green Technology
Alongside digital transformation, Vietnam is also committed to a green transition. The government aims to transform its economic model towards sustainability by applying circular economic principles and leveraging digital technologies to reduce environmental impacts. This approach is crucial for achieving strategic green growth objectives and ensuring that economic development does not come at the expense of the environment.
Vietnam’s efforts in green technology are evident in its patent landscape. From 2017 to 2021, the country held 15% of the total green patents in emerging markets, focusing on areas such as wind energy, waste management, and pollution reduction. This commitment to green innovation complements the digital transition, as both realms are interconnected and essential for sustainable development.
The concept of the Twin Transition highlights the synergy between digital and green technologies. As Vietnam advances in digital transformation, it simultaneously seeks to integrate sustainable practices into its economic framework. This dual focus is not only about improving efficiency but also about creating new business opportunities that align with global sustainability goals.
How The twin Transition Works?
Vietnam has made significant strides in developing the Twin Transition across various sectors, focusing on integrating digital transformation with sustainable practices. The Vietnamese government has established supportive policy frameworks aimed at facilitating the Twin Transition. This includes providing technical assistance for effective climate and energy policies, which are essential for promoting sustainable development. The government is collaborating with public research institutes, academia, and industry to develop innovative carbon-neutral technologies. These efforts are focused on improving energy efficiency in data centers, networks, and ICT products over the next 30 years.
A series of synchronized activities also have been implemented to enhance awareness among businesses across 63 provinces and cities regarding the importance of digital transformation. This initiative has led to a notable shift in how enterprises perceive the necessity of adopting digital technologies. Many businesses in Vietnam have begun the process of data digitization and standardization of their operations. This move towards applying digital technology is a crucial step in achieving a broader and more comprehensive digital transition. The establishment of an ecosystem to support businesses in their digital transformation journey has been a significant development. This ecosystem provides the necessary resources and guidance for enterprises to navigate the complexities of digital adoption.
Through these initiatives, Vietnam is positioning itself as a leader in the Twin Transition, leveraging digital technologies to drive sustainable economic growth while addressing environmental challenges. The integration of digital transformation with green practices is seen as a vital pathway for the country to achieve its strategic green growth objectives.
Challenges
Despite the promising outlook, Vietnam’s transition is not without challenges. The financial resources required for the Twin Transition pose a significant challenge. Many businesses, especially small and medium-sized enterprises (SMEs), may lack access to the necessary funding to invest in clean technologies and digital infrastructure. Although there are initiatives to mobilize finance for clean energy and sustainable infrastructure, the availability of grants and loans may not be sufficient to meet the growing demands. The impact of global issues such as climate change and resource depletion adds another layer of complexity. These challenges create a pressing need for businesses to adopt sustainable practices, but they also require significant changes in operations and strategies, which can be difficult to implement.
Moreover, the workforce is aging, and there is a pressing need for collective upskilling to prepare for the demands of a digital economy. Vietnam is projected to require millions of job transitions by 2040, highlighting the urgency of addressing skills mismatches and enhancing educational access, particularly in rural areas. However, the young and vibrant population of Vietnam, coupled with its strategic location in a high-growth region, positions the country favorably to leverage new digital tools and technologies. If managed effectively, this transition could lead to significant advancements in economic productivity and resilience. Addressing these challenges is crucial for Vietnam to successfully integrate digital and green transitions, ultimately contributing to sustainable and inclusive economic growth in the country for the future.
Vietnam’s journey from rice fields to Silicon Valleys exemplifies a nation poised for a transformative leap into the future. By embracing the Twin Transition, Vietnam is not only enhancing its digital capabilities but also committing to sustainable development. This dual approach positions the country as a leader in the region, ready to seize new opportunities in the digital economy while ensuring environmental sustainability. As Vietnam continues to navigate this complex landscape, the integration of digital and green technologies will be crucial for its long-term success and resilience in the global market.
