Digital economy offers SMEs a bright new world of opportunity

Mr Trinh Duy Hoang, from Vietanalytics Market Research Company said the digital economy has developed rapidly in Vietnam but there remains limited application of digital technologies in small and medium-sized enterprises (SMEs).

According to Mr Hoang, digital technologies have become perceived as ‘strange’ by many businesses and there has still only been a small-scale rollout of these technologies in production activities due to high investment costs.

From the perspective of Mr Hoang, the biggest hindrance for businesses is the human resource factor. Currently, newly-emerging tech start-ups in Vietnam are mostly SMEs which originate from households. Especially, these businesses have not improved the capacity and qualifications of human resources to get access to advanced technologies in the digital economy. 

Mr Hoang emphasized the need for investments in the field of information technology (IT) as several businesses have gained access to digital technologies and data.

He noted that to integrate into the digital economy, relevant agencies need to overcome any hindrances in terms of management thinking for new business forms related to digital technologies.

Many economists say that the digital economy presents a revolution in economic development with the foundation of the Fourth Industrial Revolution, which has provided huge opportunities for SMEs and micro businesses to develop and get access to the global market.

With the application of digital technologies and e-commerce, micro-businesses will gain a more equal footing to compete with big companies in seeking new partners and markets, opening up huge opportunities for future development.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry says that the digital economy and e-commerce have brought the world’s markets closer together and helped SMEs to grow while removingbarriers for them when approaching the global market.

“To seize these opportunities, businesses of any scale should become more transparent by applying the global standard management system. The State needs to create a favourable mechanism for the application of digital technologies and must invest in creating infrastructure to facilitate the development of technical infrastructure for the digital economy,” says Mr Loc.

Mr Loc also underlined the importance of restructuring and reforming the entire system of education and training with a focus on human resources in accordance with the requirements of the digital economy. In the coming time, the demands for the workforce in the digital and IT field has increased sharply, leading to a workforce shortage for the digital economy.

Furthermore, several fields face the risks of growing unemployment, such as garment and textile, footwear, and electronics, as they are impacted by the digital economy and the automation process brought about by the Fourth Industrial Revolution. Therefore, businesses need to re-train their workforce to adapt to the jobs available under the digital economy, says Mr Loc.

He also identified measures to ensure safety and protect privacy and confidentiality in business activities and in people’s social lives.

It is essential to devise mechanisms and legal frameworks for the digital economy and to ensure suitable infrastructure to promote creativity and strengthen control over information security as Vietnam’s digital economy is still in its initial stages, notes Mr Loc.