Industrial Revolution 4.0: Opportunities for Vietnamese Enterprises

To learn about the opportunities and challenges for Vietnamese enterprises to welcome this trend, the Vietnam Business Forum interviews Mr Pham Dai Duong, Deputy Minister of Science and Technology.
Opinion28.02.2018Le Hien
Pham Dai Duong
Deputy Minister Pham Dai DuongTheLEADER

Becoming the most widely used term in 2017, the Fourth Industrial Revolution or Industry 4.0, with the explosive development of new generation technologies, has opened a new era of human development connected to artificial intelligence (AI), Internet of Things (IoT), and the boom of digital economy creating both opportunities and great challenges for the development of each nation, as well as each community, every individual and business. To learn about the opportunities and challenges for Vietnamese enterprises to welcome this trend, the Vietnam Business Forum interviews Mr Pham Dai Duong, Deputy Minister of Science and Technology. Le Hien reports.

What do you think about the opportunities that the Fourth Industrial Revolution brings to Vietnam?
In the report "Readiness for the Future of Production 2018" of the World Economic Forum announced recently, ASEAN, the 5th largest economic production region in the world, is considered to have many opportunities to improve readiness for the fourth industrial revolution. In the region, Vietnam is still in the primitive groups, but the two main indicators which are "Structure of Production" and "Drivers of Production" standing at 48 and 53 respectively out of 100 countries rated as having great potential and opportunity to rise.

The current situation of domestic development shows that the key pillars to reach the fourth industrial revolution, such as IT infrastructure, human resources and institutions, have been making steady progress. In particular, IT infrastructure has made great strides. According to the Ministry of Information and Communications, Vietnam has more than 40,000 4G stations providing coverage for more than 95 percent of the population. The country also has more than 128 million mobile subscribers with nearly 36.2 million mobile broadband subscribers reaching the rate of 39 subscribers per 100 people. Our institutions have also gradually improved, serving the people and businesses better. According to the Global Competitiveness Index (GCI) 2017, Vietnam ranked 55th, an increase of five places compared to that of 2016 and 20 places that of five years ago. The World Bank's 2017 Ease of Doing Business Index also recorded the improvement of Vietnam's position to 82nd, an increase of 9 places compared to 2016.

It can be said that we have favourable conditions as well as basic and solid approaches to take advantage of the opportunities offered by the Fourth Industrial Revolution.

These are the necessary conditions, how about the sufficient conditions?
As I was discussing at the Smart Industry Conference organised by the Central Economic Commission in December 2017, in order to take advantage of the success of the 4th Industrial Revolution, we need to build strengths and core values of Vietnam based on the breakthrough factor which is innovation, based on coordination between the Government and enterprises. The State needs to play a more active role in coordinating with enterprises, making enterprises the centre in developing policies. Especially, Vietnam needs to focus on policies towards industrial development 4.0, interest rate support policies for enterprises transforming digitalisation and technology. Enterprises should also be more active in coordinating with the Government, sharing with the Government resources for infrastructure development, science and technology, and national innovation.

In addition, in the context of deeper international integration, we need a specific cooperation strategies with leading nations in the region to jointly develop their strengths, taking advantage of the opportunities of the Fourth Industrial Revolution. Education and training, especially vocational training, need to be fundamentally renewed.

In 2017, the Prime Minister promulgated Directive 16/CT-TTg on enhancing capacity to approach the fourth industrial revolution with many important solutions. After more than seven months of implementing the Directive, Vietnam has achieved many positive results. At present, some ministries and central agencies have been assigned to formulate the National Strategy and Programme on the Fourth Revolution. Next year, when these Strategies and Programmes are finalised and announced, we will have a master plan to "take advantage of the advantages and minimize the negative impact" as the Prime Prime Minister directed in Directive 16/CT-TTg.

What do Vietnamese businesses have to do to take advantage of the 4.0 revolution?
Firstly, in my opinion, the State management agencies, businesses, as well as the people and society should have a full and correct understanding of the effects of industrial revolution 4.0. For businesses, because each business operates in a different area, at a different level and markets, it will suffer different impacts and have different opportunities.

In addition, if the fourth industrial revolution is the industrial revolution of connectivity, of science and technology, and of innovation, our businesses need to build links closely with partners in the production chain, placing themselves in the context of regional and world markets, to be more active in innovation, in the development and application of science and technology into production. From there, we will provide products and services that meet regional and world standards, and step by step join the global supply chain.

Of course, as the Government is researching and evaluating to develop appropriate strategies and plans, businesses should, depending on their characteristics, adopt appropriate approaches to avoid following the trend but operating ineffectively.

Vietnam Business Forum