Digital revolution has never been just about discovering breakthrough technologies, he stated. For most countries in the world, including Vietnam, the future will not be determined by their drive for innovation but rather by their capacity to make the most of digital technologies developed elsewhere.
To become a digital powerhouse, Vietnam will need to offer the conditions that will enable its local operators to adopt and adapt new global digital technologies. So far, the country has done a good job, Morriset said.
“Today, it compares well to peer and aspirational comparators in penetration of mobile phones and its citizens and enterprises are well connected to the Internet. Its digital infrastructure is quite modern, covering all provinces, and funded by forward looking national telecommunication companies”, he wrote on a post on World Bank blogs on August 24.
The country also hosts several world leading IT firms such as Apple, Samsung, and Intel, among others. This demonstrates Vietnam’s competitiveness and offers a unique platform for local firms and developers - the model adopted by Japan and the Republic of Korea in the 1970s and 1980s, and more recently by China.
Vietnam needs to ensure the development of a digitally skilled labour force, the emergence of a dynamic and agile local private sector, and good but secure access to information.
The WB expert said that ensuring the availability of a labour force with digital skills is central because up to one third of existing jobs in Vietnam are at risk to be lost in a five-year span due to digitalisation. While digital transformation will create new jobs, those will require a new set of skills.
One can expect the labour market to adjust gradually as the excess demand for skilled labour will lead to higher relative wages. This will in turn incentivise workers and firms to further invest in education and training.
However, international experience has demonstrated that workers may not have the information or the financial resources to invest in longer education paths.
He went on to say that at the current pace, it might take 25 years for Vietnam to catch up with the number of students registered at the university in Thailand today.
In successful countries, the government has acted to address the market failure by removing legal obstacles to labour mobility; providing information to workers on labor market trends and demands to inform their decision making; improving the quality of technical/vocational education programmes; and supporting financial firms and workers in their efforts to acquire sets of new skills.
To keep the private sector agile and motivated to adopt new technologies, the Vietnamese Government should act to preserve competition when some markets are almost naturally dominated by digital champions because of their know-how, network externalities, and economies of scale.
"Such concentration is already observed in the fixed broadband market and rises sharply in social media and other digital subsectors, including e-commerce, fintech, digital financing, and data management," the economist said.
The reduction of barriers to entry and the strengthening regulations is often a necessary policy to avoid abuses.
Concurrently, at the other hand of the spectrum, the authorities should support local startups and small and talented investors who face financing constraints by offering them alternative funding options as done successfully in several countries, including Singapore.
Morriset advised that Vietnam needs to facilitate access to data and information. This is a public good by definition as the benefits of sharing information largely exceed the cost of collecting it.
The Vietnamese Government can improve access to information by developing inter-operability across its databases and through open data initiatives – which consist of sharing online public data in a user-friendly manner.
The Government can also encourage the private sector to collect and share data. All these efforts should also consider data and data-users privacy and security.
Vietnam would need to urgently apply measures to set the country on the path to achieve its ambitious digital economy goals.
As a principle, the Government’s interventions must be designed and implemented in close collaboration with the private sector and with maximum transparency to avoid their capture by either vested public or private interests, the WB expert concluded.
