TOPIC ANALYSIS OF THE CURRENT SITUATION OF THE DIGITAL ECONOMY IN VIETNAM

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS -*** MID-TERM INTERNATIONAL ECONOMICS REPORT TOPIC: ANALYSIS OF THE CURRENT SITUATION OF THE DIGITAL ECONOMY IN VIETNAM GROUP: 17 CLASS: KTEE308.2 MEMBER: Dang Thai Son – 2013150046 Vu Tien Dat – 2012150020 Pham Le Huy - 2012150040 Hanoi, December 7th 2021 CLASS: KTEE308.2 Numbe Names Student code r 59 Dang Thai Son 2013150046 Tasks Write opening and conclusion Prepare Chapter Prepare Part Chapter 14 26 Vu Tien Dat Pham Le Huy 2012150020 2012150040 Touch up and finish the report Prepare Chapter Prepare Chapter ABSTRACT .4 DISCUSSION OF FINDINGS CHAPTER 1: VIETNAM TODAY AND THE DIGITAL ECONOMY Digital economy – a new development trend 1.1 What is the digital economy? .5 1.2 Digital economy of the world Advantages of developing the digital economy in Vietnam .6 2.1 Vietnam in relation to the global economy 2.2 Policies to support the digital economy in Vietnam 2.3 A promising start for the digital economy in Vietnam Challenges of developing the digital economy in Vietnam 10 CHAPTER 2: THE CURRENT SITUATION OF THE DIGITAL ECONOMY IN VIETNAM 11 Digital transformation trend in Vietnam .11 1.1 Foundation of digital transformation 11 1.2 ICT – the foundation for the booming digital economy in Vietnam 12 1.3 Ecommerce .14 1.4 Smart logistics 15 1.5 Smart tourism 16 1.6 Smart health 17 1.7 Sharing economy 18 1.8 Financial Technologies .19 The digital economy in Vietnam during the Covid-19 Pandemic 20 CHAPTER 3: SOLUTIONS TO THE DIGITAL ECONOMY IN VIETNAM .22 CONCLUSION 25 REFERENCES 26 ABSTRACT Currently, the world economy is changing profoundly under the impact of the fourth industrial revolution Economic activity is not only just the mere exchange of goods but is now based on a digital platform, which is the digital economy (also known as the web economy, internet economy or new economy) According to researchers, the digital economy is "an economy that operates mainly based on digital technology", especially electronic transactions conducted through the Internet Over the past 10 years, Vietnam's digital economy has rapidly developed both in terms of infrastructure and business market With a population of nearly 100 million people, Vietnam is considered as one of the countries with a good digital economy development rate in the ASEAN region Vietnam has recorded the emergence of digitization trends in many fields and economic sectors, from commerce and payment to transportation, education, health According to the "Digital Economy of Southeast Asia in 2019" report announced by Google, Temasek and Bain on October 3, 2019, Vietnam's digital economy in 2019 is worth 12 billion USD (contributing 5% of GDP in 2019), times higher than the price value in 2015 and is expected to reach 43 billion USD by 2025 However, the level of active participation in the development of the digital economy in our country is still limited and somewhat spontaneous Currently, the system of institutions, policies, as well as enforcement, dispute settlement and enforcement agencies related to digital economy development is still weak, inconsistent and effective Our team has decided to conduct the study report “Analysis of the current situation of the digital economy in Vietnam” to further research the advantages, challenges Vietnam has and the current situation of the digital economy in Vietnam DISCUSSION OF FINDINGS CHAPTER 1: VIETNAM TODAY AND THE DIGITAL ECONOMY Digital economy – a new development trend During the past four decades, Vietnam has undergone industrialization, modernization and international integration For this country, science, technology and innovation play an important role in development: improving production capacity and competitiveness in product value chains, revolutionizing business models and attract more investment sources in the field of information and communication technology (ICT) 1.1 What is the digital economy? According to the Oxford Digital Economy Collaboration, the digital economy is understood as an economy that operates mainly on digital technology, especially electronic transactions conducted through the Internet Digital economy includes all sectors and economies (industry, agriculture, services; production, distribution, circulation of goods, transportation, logistics, finance and banking, ) that in which digital technology is applied In essence, we can see that these are organizational models and operating methods of the economy based on the application of digital technology We can easily see every day the manifestations of digital technology appearing anywhere in life such as e-commerce sites, online advertising or applications for food, transportation, and delivery also integrates digital technology to meet the convenience needs of customers But if considered at a more macro level, the digital economy also has significant contributions to the integration of Vietnamese enterprises into the global technology chain and creates great economic values to develop the country 1.2 Digital economy of the world In fact, we can see that the digital economy has brought many advantages to large global companies and corporations Specifically, large global enterprises are more or less related to digital platforms and the digital economy (Google, Apple, Amazon, Microsoft or Alibaba) The most prominent advantages of the strengths that the digital economy brings can be mentioned: e-commerce growth; promote users to use the internet and develop a system of digital economic goods and services In addition to these advantages, economic development in the direction of the digital economy also ensures transparency It should be understood that transparency is one of the strengths of the digital economy that many countries around the world pay special attention to, thereby, indirectly reducing the amount of money corruption through transparent online activities, giving governments a better control of the economy Advantages of developing the digital economy in Vietnam For Vietnam, the digital economy has made significant contributions to the integration of businesses into the global technology chain In the digital economy, businesses are forced to innovate their traditional production and business processes into an ecosystem model, linking from production, trade to use, and this will increase productivity as well as labor efficiency The information and communication technology (ICT) platform is considered as the core of digital transformation and is considered the most important part of the Core Digital Economy A healthy development of this platform will contribute to helping Vietnam overcome the middle-income trap and move forward to rapid and sustainable development Vietnam is considered a country with a good digital economy development rate in the ASEAN region thanks to good telecommunications and information technology infrastructure, wide coverage, and high user density By the end of 2020, all three major domestic mobile phone carriers, Viettel, VNPT and Mobifone have simultaneously announced coverage areas and officially tested 5G service business, bringing Vietnam into the group of countries being the first in the world to access this technology, contributing to strongly promoting the digital economy More importantly, unlike previous technologies, which were mostly imported, Vietnam has gradually mastered and manufactured 5G devices, a step of strategic significance in the development of telecommunications technology 2.1 Vietnam in relation to the global economy Over the past 10 years, Vietnam's digital economy has rapidly developed both in terms of infrastructure and business market With a population of nearly 100 million people, Vietnam is considered as one of the countries with a good digital economy development rate in the ASEAN region Vietnam has recorded the emergence of digitalization trends in many fields and economic sectors, from commerce and payment to transportation, education, health According to the report "Digital Economy of Southeast Asia" Asia in 2019" announced by Google, Temasek and Bain on October 3, 2019, Vietnam's digital economy in 2019 is worth 12 billion USD (contributing 5% of GDP in 2019), times higher than the price value in 2015 and is expected to reach 43 billion USD by 2025 In terms of a number of criteria related to the digital economy, Vietnam is leading in a number of areas: • 5G network –Vietnam is one of the first countries in the world to test a 5G network, which is expected to start rolling out in 2021 • High-achieving high school students – On international rankings for science, reading and math subjects, Vietnamese students are on par or even higher than highincome countries • Moderate Internet service charges – Fixed broadband internet service charges in Vietnam are among the lowest in the Asia Pacific region (converted according to purchasing power parity) This represents a comparison of capabilities in business and innovation, human resource development, digital infrastructure and digital economy between Vietnam and regional countries such as Indonesia sia, Thailand and the Philippines Accordingly, Vietnam's areas of strength include the urgent export of high-tech products and the results of the Global Innovation Index 2.2 Policies to support the digital economy in Vietnam The Government of Vietnam recognizes that the economy-wide digital transformation is crucial to growth and prosperity At this time, there are many agencies that simultaneously support and regulate different parts of the digital economy in Vietnam The current legal framework is a compilation of trade regulations and decrees issued by various ministries For telecommunications and ICT matters, the Ministry of Information and Communications is the main focal point In order to strongly promote the digital economy, besides the political will and determination of the government, there should be a unified body or ministry that can promote, regulate and carry out all activities related to digital economic development This body can officially recognize the existence of the digital economy in the overall economy and create consistency, synchronization and feasibility in the revision, formulation and implementation of policies, programs and plans for the digital economy Policies need to be updated as new Free Trade Agreements are signed and implemented This will facilitate regional cooperation in digitization, innovation, development of new global value chains and attracting quality FDI capital At the same time, creativity, openness and liberalization should be considered as guiding principles for the implementation of the digitalization process, starting from the government and spreading to the whole society Over the years, the Vietnamese government has implemented a number of laws to regulate the digital economy The detailed implementation of these new laws is guided through decrees and decisions 2.3 A promising start for the digital economy in Vietnam Vietnam's digital economy is growing rapidly Digital development has radically changed many economic sectors, from manufacturing and agriculture to commerce, payments, transportation, finance and education Since 2003, the inplemetnation rate of high-speed Internet services, smart devices and mobile phones in Vietnam has been relatively high, far exceeding that of countries such as Pakistan, India and Indonesia -nesia In 2017, more than half of the country's population had access to the Internet, much higher than 15% a decade earlier Rural areas still lag behind urban areas, although usage rates have also increased sharply thanks to satellite and wireless services now offered in remote provinces as well The use of broadband Internet services is also increasing in the business sector The percentage of manufacturing and service companies using the Internet in their business activities increased from 71% in 2007 to 86% in 2011 As of 2016, about 500,000 Vietnamese business accounts were newly created on the site Alibaba.com, every year about 100,000 new Vietnamese business accounts are created Vietnam is also the country with the highest number of domain name registrations in the ASEAN region In 2017, there were about 422,000 '.vn' domains operating out of a total of nearly million domain names registered in ASEAN countries About 16 million IPv4 addresses have been issued in Vietnam The digital economy is booming in Vietnam In 2016, PC magazine described Vietnam as the Silicon Valley of Southeast Asia New economic sectors, emerging and fast-growing industries in Vietnam include financial technology, telecommunications, computer and electronics manufacturing, and ICT services As of mid-2018, Vietnam had about 30,000 enterprises operating in the fields of hardware, software, digital content and ICT services There is a large community of startups and software developers who are designing digital products and services for domestic use as well as undertaking software development for advanced economies In the world There are also specialized training centers and technology parks for IT programmers and engineers in many localities, including major cities such as Hanoi, Ho Chi Minh City and Da Nang ICT is one of the fastest growing industries in Vietnam In 2018, total revenue from the ICT industry was US$98.9 billion, 13 times higher than 2010 revenue (7.6 billion US dollars) The hardware industry is the largest branch of the ICT industry in Vietnam, contributing 89% of total revenue in 2018 Exports of ICT equipment accounted for about 25% of Vietnam's total exports in 2016 (this figure) in 2011 only reached 10%) This is also the industry with the largest export turnover in the country, in which broadcasting equipment and mobile phones are particularly important product groups This is explained by the fact that leading manufacturers based in Vietnam such as Samsung, Intel, Dell and LG are expanding their business and increasing investment in Vietnam Vietnam assembles electrical and electronic equipment, increasing exports of modern computer equipment Half of all Samsung S8, S8 Plus phones and more than 80% of the central processing units in Intel's personal computers are made in Vietnam Thanks to foreign investment in ICT manufacturing, turnover Vietnam's high-tech exports have surpassed most of its neighbors in the region Domestic ICT businesses are also experiencing remarkable growth with their share prices tripling since 2012,85 typically large companies such as VC Corp, Viettel and FPT Vietnam's software industry is also growing steadily and is starting to become an attractive destination in the region Domestic enterprises hold a large market share, providing software products at low cost As of mid-2018, a total of 9,500 enterprises in Vietnam are developing digital software for the fields of finance, telecommunications, smart agriculture and government In 2016, IT outsourcing services brought in about billion USD in profit Vietnam has overtaken India to become Japan's second largest software outsourcing destination, just behind China Challenges of developing the digital economy in Vietnam However, the level of active participation in the development of the digital economy in our country is still limited and somewhat spontaneous Currently, the system of institutions, policies, as well as enforcement, dispute settlement and enforcement agencies related to digital economy development is still weak, inconsistent and effective, so it has not been exploited the full potential to develop the digital economy yet The habit of transaction, payment using cash and payment on receipt of goods of most consumers is a big obstacle, increasing costs for the whole society, businesses and people People's awareness about the digital economy is still limited, skills to use the internet safely are low, and it hasn't kept up with the speed of technology development The structure and quality of human resources have not met the requirements Science technology and innovation are not really driving forces for socio-economic development; The newly formed national innovation system has not been synchronized and effective The process of national digital transformation is still slow and lacks initiative due to limited infrastructure for digital transformation; many enterprises are still passive, the capacity to access, apply and develop modern technology is still low The digital 10 revenue from the ICT industry was US$98.9 billion, 13 times higher than the revenue in 2010 ($7.6 billion) The hardware industry is the largest branch of the ICT industry in Vietnam, contributing 89% of total revenue in 2018 ICT equipment exports accounted for about 25% of Vietnam's total exports in 2016 (this figure was only 10% in 2011) It is also the industry with the largest export turnover in the country, in which broadcasting equipment and mobile phones are particularly important product groups This can be explained because leading manufacturers based in Vietnam such as Samsung, Intel, Dell and LG are expanding their business and increasing investment in Vietnam Vietnam assembles electrical and electronic equipment, increasing exports of modern computer equipment Half of all Samsung S8, S8 Plus phones and more than 80% of the central processing units in Intel's personal computers are made in Vietnam Thanks to foreign investment in ICT manufacturing, turnover Vietnam's high-tech exports have surpassed most of its neighbors in the region Domestic ICT companies are also experiencing remarkable growth with their share prices tripling since 2012, 85 typically large companies such as VC Corp, Viettel and FPT Vietnam's software industry is also growing steadily and is beginning to become an attractive destination in the region Domestic enterprises hold a large share of the market, providing low-cost software products As of mid-2018, a total of 9,500 enterprises in Vietnam are developing digital software for the fields of finance, telecommunications, smart agriculture and government In 2016, IT outsourcing services brought in about US$3 billion in profit.86 Vietnam overtook India to become Japan's second largest outsourcing destination, second only to China Revenue from ICT by sectors (unit: billion US dollars) 13 Number of ICT enterprises in Vietnam by manufacturing sector 1.3 Ecommerce E-commerce is one of the fastest growing segments in Vietnam's digital economy According to the Department of E-commerce and Information Technology (VECITA), Vietnam's e-commerce market is growing by 35% per year, 2.5 times faster than Japan In 2017, retail sales Vietnam's online market reached 6.2 billion USD; more than double that of 2014 VECITA predicts 52% increase in online shoppers while Vietnam E-commerce Association (VECOM) predicts revenue from online apps to reach $10 billion America in 2020 The Internet has become an important tool in the exchange of information between businesses, especially import-export businesses Nearly half (49%) of enterprises in Vietnam have their own website and a third (32%) of enterprises have established relationships with foreign partners through online channels E-commerce platforms also help connect Vietnamese businesses with foreign markets, of which about 600 are exporting on Alibaba and 140 on Amazon (through a partnership with VECOM) Ecommerce in Vietnam and around the world is booming with the rapid development of mobile payment applications such as WePay, ApplePay, SamsungPay The emergence of a global cryptocurrency usable via e-wallets that allows users to transfer money to each other through peer-to-peer (P2P) transactions on the Internet as well as to pay for goods and services domestically 14 Overview of B2C e-commerce in Vietnam 1.4 Smart logistics Along with the explosion of e-commerce, the logistics industry also grew strongly In recent years, logistics businesses have grown by an average of 14-16% (equivalent to 4042 billion USD) per year Businesses operating in this field are converting from traditional logistics company systems to an e-commerce logistics companies to improve competitiveness and meet the needs of new markets According to the Vietnam Association of Logistics Service Enterprises, in recent years, the number of enterprises applying technology in their operations increased from 15-20% to 40-50% However, more than half of them among these enterprises are still not using key technologies This leads to high operating costs in the Logistics industry in Vietnam – 16.8% while that of the Asia Pacific region is only 12.5% The World Bank's report on trade logistics in 2016 shows that Vietnam ranks 64th out of 160 countries in logistics development Despite its great potential, the industry's competitiveness is still quite modest compared to other countries in the region, especially in technology application New technologies applied in the logistics industry in the world have not yet been popularized in Vietnam For example, the robotic system in warehouses has only been applied by two companies in Vietnam, German Schenker and Vinamilk in Bình Dương Large domestic transport enterprises are still handling goods manually instead of using automatic distribution centers Technologies such as virtual reality or drone delivery have yet to be announced in any plans to deploy new technologies 1.5 Smart tourism Tourism is booming in Vietnam According to the Vietnam National Administration of Tourism, in the period 2016-2017, the number of international and domestic tourists as well as the total revenue from tourism increased sharply In 2017, Vietnam welcomed 13 million visitors international and 74 million domestic tourists, an increase of nearly 30% and 20% respectively compared to 2016 Also in 2017, total direct revenue from tourism reached more than 23 billion USD and contributed nearly 7.5% to GDP 15 Thanks to Industry Revolution 4.0, Vietnam's tourism industry has changed rapidly, service quality has been improved thanks to the use of a 'smart tourism model' According to a survey by the Vietnam National Administration of Tourism, 71% of international tourists to Vietnam in 2017 consulted online sources to choose a destination In addition, 64% of international tourists booked travel to Vietnam via online channels Although almost 100% of businesses in Vietnam's tourism industry use websites to introduce their products to customers, just over 50% of them Domestic enterprises have successfully applied online sales and payment methods.106 In recent years, the online hotel booking market share in Vietnam is also very large, accounting for an average of 30-40% of total sales of goods Statistics from the Vietnam E-commerce Association show that foreign businesses such as Agoda and Booking.com account for 80% of the market share Although they have just entered the market and have already achieved initial successes, Vietnamese enterprises such as gotadi.com, ivivu.com, chudu24.com and vntrip.vn still account for only a modest market share The public transport system also contributes to the growth of smart tourism For example, buses with free Wi-Fi have been introduced in some cities, making travel more convenient 1.6 Smart health In 2018, the Vietnamese health sector set specific goals of developing a smart health system, with a plan to deploy digital technologies in three main pivotal fields: smart disease prevention, intelligent examination and treatment The innovative idea of ‘Digitized Medical Communication Model’ is essentially a closed network of communication channels in the hospital environment, operated and processed over the Internet By 2018, this model has been applied by 40 hospitals and 500 pharmacies In addition, there is an online portal Medihub.vn that provides official information about services, processes, regulations, as well as information and new treatment methods of each hospital Major hospitals in Vietnam have started to build and deploy the Smart Clinic model For example, at Thu Duc District Hospital, Ho Chi Minh City, patients can book an 16 appointment through a central system connected to the hospital's general management software Customers can receive the medical examination order number automatically and the process of waiting for the appointment is also more comfortable and convenient because around the hospital there are many screens displaying medical examination order numbers Information management systems are being digitized The Ministry of Health is expanding the project on Electronic Medical Records (EMR) to affiliated units across the country after successful piloting under Circular No 46/2018/TT-BYT This electronic medical record system allows medical facilities to use digital to record, display and store medical data of each citizen Vietnam Social Insurance is also actively researching and drafting an electronic health insurance card template All these plans will help Vietnam's health sector save management costs and create conditions for patients to experience health care more conveniently 1.7 Sharing economy The sharing economy in Vietnam is growing thanks to its cloud computing platform, high smartphone usage and, and low personal property ownership among Vietnamese consumers For example, over the past five years, ride-sharing platforms (carpooling apps) have created competition with traditional taxi businesses Vietnam was the first country in Asia to attract Uber and was also Uber's second fastest growing market globally in 2015, after China In 2018, Grab acquired Uber's operations in the region sector, but Go-Jek's entry into the Vietnamese market in September 2018 has boosted competition in this industry Traditional taxi service providers in Vietnam are also developing their own platforms and mobile applications to compete with new entrants to the market Meanwhile, the government is also looking into whether these ride-sharing platforms need to follow the rules of traditional taxis If so, the competitive advantage of these types of services is likely to diminish 17 Percentage of enterprises using online public services industry in Vietnam (%) Peer-to-peer lending is also growing in Vietnam, with platforms like Timma, Vaymuon and Mofin providing loans for individuals and Lendbiz providing loans for businesses Through the Lendbiz service, businesses can apply for loans up to VND billion (US$44,000) without collateral and can be approved within 24 hours The Lendbiz platform is attractive to investors because of its low registration cost (only 500,000 VND, about 22 USD) and the ability to achieve high returns with an annual interest rate of up to 20% 1.8 Financial technologies Digital technology has created new business models and ‘emerging’ industries One of the fastest growing sectors is financial technology (fintech) products and services Vietnam is a rising star in the global fintech industry The number of business incubators, 18 support centers and innovation laboratories in Vietnam is 42 – higher than Indonesia (20), Malaysia (10), Thailand (5) and just behind Singapore In 2017, Vietnam had 48 financial technology companies providing payment, remittance and electronic money services However, the share of services and the products that fintech companies offer are also changing Although payment is still a type of product and service that accounts for a large proportion of fintech startups, new areas such as insurance technology (insurtech), asset management technology (wealthtech) are emerging and management technology (regtech) is attracting interest from investors around the world At the same time, the number of fintech companies involved in cryptocurrency mining is on a downward trend because the use and mining of this currency in Vietnam still has many potential risks Government agencies are considering introducing bans with varying degrees of enforcement on cryptocurrencies Companies and investment funds have also been warned to avoid investing in the currency Many ministries and sectors oppose the use of cryptocurrency mining machines Authorities will need to consider policy options to manage the problems associated with cryptocurrency fraud in the country and provide solutions to the legal and illegal use of cryptocurrencies and its role in cross-border cash flows 19 Fintech segment in Vietnam (ratio of Fintech companies operating in each specific field body) The digital economy in Vietnam during the Covid-19 Pandemic In 2020, in the context of the general decline of the global and regional economy, the growth rate of Vietnam's digital economy will still reach a positive rate of 16% - the highest in the ASEAN region The scale of the digital economy in Vietnam has increased from billion USD in 2015 to 12 billion USD in 2019 and 14 billion USD in 2020 It is expected to break through to 52 billion USD by 2025 In particular, e-commerce, one of the most important components of Vietnam's digital economy, has significantly contributed to promoting economic growth in Vietnam According to the e-commerce report in 2020, B2C ecommerce revenue growth in the period 2015-2019 is always double-digit with the average growth rate of the whole period is 25.4%, revenue scale in 2019 2.5 times higher than 2015 20 In recent years, there have been many very developed digital economic models in Vietnam, with many applications that can be installed on smartphones, helping users to call cars, deliver goods, book tickets plane, order food, rent a room, hire a tutor, hire a maid, hire a service to repair household appliances even users can connect with home health care doctors Vietnam has developed many online methods in operating, working and training of management agencies, businesses, schools Currently, the most popular among enterprises is digitalization in traffic, store, process data from production to bringing products to market Vietnam's 5G network is also being tested and is expected to begin deployment from 2021 In Vietnam, internet service charges are moderate, and fixed broadband internet service charges are among the lowest in the Asia Pacific region In particular, besides the negative impacts, the COVID-19 pandemic has partly promoted the faster development of the digital economy in terms of infrastructure and telecommunications, information technology and e-commerce Online purchases of goods and non-cash payments have increased sharply during outbreaks, thereby forming a new habit for consumers and promoting the development of the digital economy According to data from the Payment Department (SBV), in the first quarter of 2021, transactions via the internet reached 156.2 million items with a value of 8.1 million billion VND, up 28.4% in value compared to the previous quarter same period in 2020; transactions via mobile phone channel reached 395.05 million items with a value of more than 4.6 million billion, up 103% in value; QR code channel reached 5.3 million items with a value of 4,479 billion VND, up 146% According to the Ministry of Information and Communications, Vietnam has great opportunities to develop the digital economy For the first time in history, Vietnam is going with the world in the fourth industrial revolution, the digital transformation revolution, and we have a great opportunity to break through and rise Along with that, Vietnam is a large market with a lot of potential for new business models, with a large population, a period of golden population structure, a large workforce, and a large 21 number of internet users and large and rapidly growing smartphones will create attractive markets for the digital economy Vietnam is also located in the center of Southeast Asia, of Asia, an area that is considered to be the center of the development of digital technology and the global digital economy In particular, COVID-19 is a global disaster but also a hundred-year push for digital transformation, digital economic development However, the development of the digital economy in Vietnam is also facing many difficulties That is the imbalance between fields and regions; legal issues, network security and ensuring user privacy In addition, Vietnam's awareness, habits and quality of human resources are not "really ready" for the digital economy The annual Vietnam economic report published by the Institute for Economic and Policy Research (VEPR), University of Economics, Hanoi National University published at the end of May 2019 shows that up to 85% of Vietnamese industrial enterprises South is still outside the digital economy, only 13% at the beginner level CHAPTER 3: SOLUTIONS TO THE DIGITAL ECONOMY IN VIETNAM In order for the digital economy in Vietnam to develop strongly in the coming time, through analyzing the current situation, the author recommends focusing on implementing the following solutions: Firstly, build and perfect the legal and institutional environment to meet the requirements of the period of international integration in the digital economy It is necessary to enact the National Strategy on digital transformation and digital economy soon At the same time, develop and publicize the sector planning on information technology development and application On that basis, promulgate standards for information exchange between agencies and units to create linkages and synchronization in the process of infrastructure investment and development based on information technology application In addition, the State should issue decrees on data sharing; on the protection of personal data; on electronic authentication; on the protection of personal data and 22 ensuring the privacy of individuals; regarding the handling and settlement of disputes and conflicts over operations, as well as the interests of subjects participating in activities, business, commerce and civil in the digital environment Secondly, it is necessary to equip with knowledge and unify thoughts and actions on the digital economy, thereby drastically transforming the thinking of leadership in socioeconomic management and administration in the context of the digital economy Vietnam needs to identify the digital economy development and integration strategy as the trend of the times, an important and necessary direction in the national development orientation, an opportunity for Vietnam to break through It is necessary to soon switch to thinking about management and administration in the direction of what is not prohibited, people and businesses are allowed to do; new business models and methods that are unknown, unmanageable, but not harmful, should be tested for operation and from practical requirements to research, find suitable management methods, and learn at the same time Third, improve the quality of education and human resource training for the digital economy Research and change training content and methods in order to build human resources capable of receiving new production technology trends; focus on promoting training in science, technology, engineering and mathematics, foreign languages, informatics; develop training programs, re-train professional knowledge; provide flexible self-learning ability, suitable for each organization and individual, etc There should be policies to connect the domestic and foreign scientific and technological communities, especially with the Vietnamese community in other countries Fourth, the Government should make efforts to invest in upgrading digital infrastructure, as well as modern digital technology solutions to deploy smart connected digital applications, accelerate non-cash payment applications, effective e-government… The government must be the leader in applying information technology to management activities Regarding digital infrastructure upgrade, it is necessary to continue to promote the deployment of 5G services to keep up with the world trend 23 Moreover, it is also necessary to encourage and support the development of domestic technology companies; support to improve the skills of small and medium-sized enterprises in accessing and applying popular technologies, management and business models in the Fourth Industrial Revolution to gain access to the global market; honor and award "Make in Vietnam" products, Vietnamese technology enterprises to arouse national pride, promote the spirit of technology entrepreneurship, and replicate successful models Fifth, ensure the safety of important national information systems, important national security information systems, improve defense capacity, effectively fight against information security infringing activities of hostile forces and criminals The government needs to increase investment in modern infrastructure, have enough bandwidth to overcome attacks that cause network congestion, and have a backup storage system to redirect data before network attacks and recover after network attacks CONCLUSION Vietnam has made significant stride in developing its digital economy over the last four decades Even when the COVID-19 pandemic caused the disruption of traditional economic activities, it created a catalyst for the development of the digital economy Vietnam's digital economy growth rate is positive at 16% - the highest in the ASEAN region However, the development of the digital economy in Vietnam is also facing many difficulties That is the imbalance between fields and regions; legal issues, network security and ensuring user privacy The document of the XIII Congress determined that by 2025, the digital economy will account for 20% of GDP, and by 2030, the digital economy will account for about 24 30% of GDP To achieve the above goal, the document emphasized the need to improve the business environment, promote innovative start-ups, and develop industries, fields and businesses on the basis of strongly applying the achievements of science and technology learning technology, especially the Industrial Revolution 4.0; focus on perfecting institutions, policies and laws in line with the market mechanism and international practices to develop the digital economy and digital society Strongly develop information technology infrastructure, build and develop synchronously national, regional and local data infrastructure to connect synchronously and unify, creating a foundation for development of the digital economy and digital society REFERENCES Cameron A, Pham T H, Atherton J, Nguyen D H, Nguyen T P, Tran S T, Nguyen T N & Trinh H Y Hajkowicz S (2019), Tương lai kinh tế số Việt Nam – Hướng tới năm 2030 2045 CSIRO, Brisbane: https://data.opendevelopmentmekong.net/dataset/fd853b31-f750-4862-908c1bcc65a44609/resource/b7d52f76-c865-4e60-806a-bc8ba3557864/download/1800566_data61_report_vietnamsfuturedigitaleconomy2040v2_vietnamese_we pdf South Can Tho University (2021): https://www.nctu.edu.vn/kinh-te-so? fbclid=IwAR2CIf0NLH42ZiHXVIWepuoib-m5n8LQIwjLcJRv7bqEswfZV2byyn8tl8 25 Chu Thi Nhuan, Chien luoc phat trien nen kinh te so Phap: Mot so goi mo doi voi Viet Nam (2021): https://www.tapchicongsan.org.vn/web/guest/the-gioi-van-de-sukien/-/2018/824313/chien-luoc-phat-trien-nen-kinh-te-so-cua-phap mot-so-goimo-doi-voi-viet-nam.aspx?fbclid=IwAR1Vg-jwK74PO0wgHkUId1x24NEGUgdJEZGMBC458BDG35-AWgyW92NMKU Thinh Van Khoa, Tim hieu ve phat trien kinh te so o Viet Nam hien (2021): http://truongchinhtrithanhhoa.gov.vn/web/trang-chu/khoa-hoc-thong-tin-tulieu/bai-viet-chuyen-de/tim-hieu-ve-phat-trien-kinh-te-so-o-viet-nam-hiennay.html? fbclid=IwAR246dn64ILoVXDg6qXBjiPSrID3bfT1ZiTky9WREteNoaPfPIatUBn _7Oc Ministry of Information and Communications: https://www.mic.gov.vn/mic_2020/Pages/trangchu_2020.aspx The World Bank: https://www.worldbank.org/vi/country/vietnam Minh Duyen, Phat trien kinh te so – don bay cho su phuc hoi ben vung boi canh dich COVID-19 (2021): https://ncov.vnanet.vn/tin-tuc/phat-trien-kinh-te-sodon-bay-cho-su-phuc-hoi-ben-vung-trong-boi-canh-dich-covid-19/16014855eae4-4098-81cf-0d474d826330 Tim hieu ve phat trien kinh te so o Viet Nam hien (2021): http://truongchinhtrithanhhoa.gov.vn/web/trang-chu/khoa-hoc-thong-tin-tulieu/bai-viet-chuyen-de/tim-hieu-ve-phat-trien-kinh-te-so-o-viet-nam-hiennay.html? fbclid=IwAR246dn64ILoVXDg6qXBjiPSrID3bfT1ZiTky9WREteNoaPfPIatUBn _7Oc 26 27 ... in Vietnam 2.3 A promising start for the digital economy in Vietnam Challenges of developing the digital economy in Vietnam 10 CHAPTER 2: THE CURRENT SITUATION OF THE DIGITAL. .. research the advantages, challenges Vietnam has and the current situation of the digital economy in Vietnam DISCUSSION OF FINDINGS CHAPTER 1: VIETNAM TODAY AND THE DIGITAL ECONOMY Digital economy. .. operating in each specific field body) The digital economy in Vietnam during the Covid-19 Pandemic In 2020, in the context of the general decline of the global and regional economy, the growth rate of