PROMOTING DIGITAL TRANSFORMATION IN VIETNAM: CURRENT SITUATION, CHALLENGES, AND DEVELOPMENT ORIENTATIONS

Summary

Digital transformation is an inevitable development trend in the context of the Fourth Industrial Revolution, playing a vital role in enhancing the efficiency of state governance, the competitiveness of enterprises, and the quality of life for citizens. In Vietnam, digital transformation has been identified as a key driver of socio-economic development through the implementation of the National Digital Transformation Program to 2025, with a vision toward 2030. This paper analyzes the current situation and proposes solutions to promote a comprehensive and sustainable digital transformation, thereby contributing to the realization of a digital government, digital economy, and digital society in Vietnam.

Keywords: Digital transformation, digital economy, digital government, digital infrastructure, digital technology, Vietnam

INTRODUCTION

In the context of the Fourth Industrial Revolution taking place vigorously across the globe, digital transformation has become an inevitable trend, playing a decisive role in enhancing national competitiveness, governance efficiency, and the quality of public services. Digital transformation is not merely the digitization of data but rather a comprehensive process of changing operational models, methods of production organization, management, and service delivery based on digital technologies. In Vietnam, digital transformation has been identified as one of the key drivers promoting socio-economic development. The Government has issued the National Digital Transformation Program to 2025, with an orientation toward 2030 (Prime Minister, 2020), setting the goal of developing a digital government, digital economy, and digital society. Many sectors, industries, and localities have taken the first steps on the journey of digital transformation, yielding initial positive results. However, this process is also facing numerous challenges in terms of institutions, infrastructure, human resources, and public awareness. If these challenges are not addressed promptly, they will hinder the modernization of the economy and the construction of an e-government.

THE CURRENT SITUATION OF DIGITAL TRANSFORMATION IN VIETNAM

Digital transformation in Vietnam has made remarkable progress in recent years, reflected in the increasingly complete legal framework, the expansion of digital infrastructure, and the growing adoption of digital technology across sectors. However, alongside these achievements, the process still faces many barriers that require timely recognition and resolution.

Achievements

First, in terms of institutions, the Government issued the National Digital Transformation Program to 2025, with an orientation toward 2030 under Decision No. 749/QĐ-TTg, which clearly identifies three pillars: Digital Government, Digital Economy, and Digital Society. This serves as an essential guideline for comprehensive, in-depth, and sustainable digital transformation in Vietnam. Accordingly, the Government has directed ministries, central agencies, and all 63 provinces and cities to develop and implement their own digital transformation plans, ensuring synchronization while maintaining flexibility suited to local contexts.

Vietnam has achieved notable progress in various global digital transformation rankings. According to the United Nations, in 2024, Vietnam improved its position in the E-Government Development Index (EGDI) by 15 places, ranking 71st out of 193 countries, reflecting efforts to enhance digital public services and governance. Simultaneously, the Global Innovation Index (GII) by the World Intellectual Property Organization (WIPO) recorded Vietnam’s advancement by two ranks to 44th out of 133, showing an increasingly favorable innovation environment. In cybersecurity, according to the International Telecommunication Union (ITU), Vietnam rose eight places to rank 17th out of 194 countries in the Global Cybersecurity Index (GCI), demonstrating strong national commitment to securing cyberspace (Minh Hoàng, 2025).

Regarding digital infrastructure, Vietnam has made remarkable progress. By the end of 2024, over 82.4% of households had access to fiber-optic broadband, surpassing the 2025 target. The commercialization of 5G by major carriers such as Viettel and VNPT has enhanced connectivity speeds, paving the way for the development of high-tech applications such as the Internet of Things (IoT), Artificial Intelligence (AI), and Big Data. Meanwhile, the phasing out of 2G services reflects the determination to shift toward a new-generation, synchronized, and efficient network infrastructure.

In the public sector, the establishment of the National Population Database has produced clear results, with over 1.3 billion data queries and 537 million synchronized records, ensuring interconnectivity among 18 ministries and 63 localities. The VNeID electronic identification application has been increasingly utilized, supporting online public services, healthcare, education, and finance. By the end of 2024, 45.79% of end-to-end public services were available online, with a goal of reaching 80% by 2025.

In the digital economy, Vietnamese enterprises—particularly startups and large corporations—have adopted platforms such as ERP, CRM, e-commerce, and cashless payment systems to enhance management efficiency and expand market reach. The Ministry of Information and Communications has developed a set of digital economy measurement tools at the local level, enabling provinces to identify strengths and weaknesses and build appropriate development roadmaps. According to the e-Conomy SEA 2024 report, Vietnam’s digital economy reached an estimated value of USD 30 billion, ranking second in Southeast Asia.

For citizens, widespread smartphone ownership (over 87%) and high-speed Internet access have laid the foundation for a digital society. People are increasingly familiar with online learning platforms, telemedicine, digital banking, and e-wallets, improving quality of life, saving time and costs, and promoting equality in accessing public services.

Challenges and Limitations

Despite significant progress, Vietnam’s digital transformation process continues to face considerable limitations and challenges in terms of institutions, infrastructure, human resources, technology, and public awareness. If not properly addressed, these issues could negatively impact the quality, pace, and sustainability of national digital transformation.

First, the institutional and legal framework for digital transformation remains incomplete and inconsistent. Although the Government has issued several key documents, such as Decision No. 749/QĐ-TTg on the National Digital Transformation Program and the National Strategy for Digital Data Development, legal provisions concerning personal data protection, cybersecurity, electronic identification, and data sharing are still insufficient and fragmented. Many agencies struggle with the application of technical standards, leading to difficulties in data integration and interoperability. According to Phạm Thị Giang (2024), delays in establishing a unified legal framework have reduced the operational efficiency of national information systems and created “bottlenecks” in data sharing among ministries and localities.

Second, there remains a significant digital infrastructure gap between regions, particularly between urban and rural areas and between lowland and mountainous regions. While major cities such as Hanoi, Ho Chi Minh City, and Da Nang have heavily invested in 5G, data centers, and cloud computing, many remote provinces still face unstable Internet connections, outdated telecommunications systems, and insufficient devices. According to the Ministry of Information and Communications (2024), although 82.4% of households are connected to fiber-optic broadband, this rate remains uneven; several border communes still lack adequate mobile base stations. This greatly restricts access to digital services such as online education, e-government, and telehealth in rural areas.

Third, digital human resources remain insufficient in both quantity and quality. Digital transformation requires not only IT engineers but also a workforce with basic digital skills for daily production and service operations. However, research shows that the proportion of Vietnamese workers possessing fundamental digital skills remains below the regional average. Specialists in advanced fields such as AI, cybersecurity, Big Data, and system programming are still in short supply. While many universities and colleges have introduced digital technology programs, curricula often lag behind practical demands, with limited hands-on experience and weak alignment with labor market needs.

Fourth, digital awareness among businesses and citizens remains limited. Many enterprises—especially small and medium-sized enterprises (SMEs)—still view digital transformation as an expense rather than a strategic investment. According to Bùi Anh Tuấn (2025), the proportion of Vietnamese enterprises with formal digital transformation strategies remains low. The main barriers include lack of information, insufficient financial resources, and shortage of skilled personnel. Reluctance to change and fear of technological risk further hinder businesses from adapting to the digital economy.

Finally, digital inequality persists, leading to a potential “digital divide.” Elderly people, low-income groups, ethnic minorities, and residents in disadvantaged areas often struggle to access online public services due to a lack of devices, skills, and technical support. This not only affects the inclusiveness of digital transformation but may also deepen social inequalities if timely policy interventions are not implemented.

ORIENTATIONS FOR DIGITAL TRANSFORMATION DEVELOPMENT IN VIETNAM

To promote comprehensive and sustainable digital transformation, Vietnam must implement a synchronized set of long-term strategic solutions—placing citizens and businesses at the center, technology as the driving force, and institutions as the foundation.

1. Complete the institutional and legal framework for digital transformation.
   Accelerate the issuance of legal documents such as the Personal Data Protection Law, the amended Law on Electronic Transactions, and decrees on digital identity, open data sharing, and cybersecurity. Develop a set of national technical standards for digital platforms to ensure compatibility and interoperability within the national digital ecosystem.

2. Develop modern and synchronized digital infrastructure.
   Invest in broadband expansion, fiber-optic transmission upgrades, and nationwide 4G/5G coverage—particularly in rural and remote areas. Encourage enterprises to develop domestic data centers to ensure data sovereignty and national cybersecurity. Expand practical applications of the VNeID electronic identification system across healthcare, education, banking, and public services.

3. Enhance digital human resource development.
   Implement structured digital skills training from primary to higher education. Develop specialized training programs in AI, Big Data, cybersecurity, and blockchain. Foster collaboration between government, businesses, and educational institutions to build a flexible, innovative digital workforce ecosystem.

4. Promote digital transformation among enterprises, especially SMEs.
   Launch support programs enabling SMEs to access affordable digital platforms and receive consultancy suited to their operational capacities. Encourage digital business models, e-commerce, cashless payment, and digital management (ERP, CRM) through tax incentives, credit access, and training support.

5. Enhance public awareness and digital literacy.
   Conduct large-scale communication campaigns to improve understanding of digital transformation benefits, focusing on rural and ethnic minority communities. Develop “digital villages” and “digital communes” to reduce regional disparities in digital access.

6. Strengthen international cooperation and foster innovation.
   Actively engage in global digital organizations and forums to acquire advanced technologies and governance models. Encourage investment and technology transfer from major domestic and international tech corporations—especially in critical sectors such as AI, semiconductors, and quantum computing.

REFERENCES

1. Bùi Anh Tuấn (2025). Digital transformation of Vietnamese enterprises: Opportunities and challenges in the new era. Retrieved from Kinh tế và Dự báo.

2. Minh Hoàng (2025). Vietnam’s strong progress in international digital transformation rankings. Retrieved from Thị trường Tài chính Tiền tệ.

3. Phạm Thị Giang (2024). Challenges of digital transformation for modern state governance. Retrieved from Tạp chí Quản lý Nhà nước.

4. Prime Minister (2020). Decision No. 749/QĐ-TTg on the National Digital Transformation Program to 2025, with an orientation toward 2030.