Digital transformation key development driver for Vietnam in ‘new era’: Party chief

Vietnam sees digital transformation as a critical development driver in the new era, exerting great impacts on productive forces and production relations, Party General Secretary and State President To Lam has affirmed.

In an article written on the occasion of National Day (September 2), Lam highlighted the role digital transformation would play in the country’s future prosperity.

He recalled a transformation in production relations and the building of a socialist-oriented market economy in Vietnam after the country regained independence in 1945 under the Party’s leadership.

From 1979 until the sixth National Party Congress in 1986, Vietnam experienced severe crises, partly due to non-uniformity between productive forces and production relations. The productive forces were restrained not only in the case of backward production relations but also when some elements of production relations greatly surpassed the development level of productive forces.

Resolution 10-NQ/TW dated April 5, 1988 of the Politburo was a breakthrough step in reforming production relations in agriculture when it officially recognized the household as an independent economic unit. The resolution allowed the handover of long-term land use rights to farmers.

In just one year after implementing the resolution, Vietnam managed to overcome a long period of food shortage and exported 1.2 million tons of rice for the first time.

“The appropriate adjustment of production relations created a new motivation for the development of productive forces, taking the country out of crisis and into a period of all-round renewal and international integration,” Lam wrote.

More than three decades after initiating the Doi moi process in 1986, Vietnam is expected to record an average GDP growth rate of 5.7-5.9% per year in the 2021-2025 period, ranking it among the fastest-growing economies in the region and the world.

Its GDP is projected to top $500 billion by 2025, resulting in a per capita income of approximately $4,650, positioning Vietnam in the upper-middle-income group.

By the same year, Vietnam’s workforce is expected to reach 53.2 million people, with the proportion of laborers in agriculture forecast to decrease significantly to 25.8%. Around 70% of the workforce will have received training.

“The focus will be on developing high-quality human resources that can meet the demands of the Fourth Industrial Revolution in key areas such as semiconductors, artificial intelligence (AI) and information technology, gradually forming a contingent of workers with increasingly enhanced digital thinking and skills.”

Lam stressed that AI, Internet of Things (IoT), big data, and cloud computing were gradually becoming essential production tools across various industries and sectors. Infrastructure, particularly digital infrastructure, was being developed strongly. Telecommunications and broadband internet networks have extended coverage over the entire country, providing a foundation for developing the digital economy and digital society.

Development of production tools in the digital economy was creating profound changes in productive forces, leading to conflicts with existing production relations, he noted.

“While new productive forces are forming and developing rapidly, there remains a gap between the quality of human resources and the requirements of the country’s development in this new phase. Training of human resources, particularly those working in the high-tech sector, remains a significant challenge. Production relations still contain many inadequacies, failing to catch up with the development of productive forces.”

Meanwhile, mechanisms, policies and laws have not synchronized fully and overlapping remains, thus failing to create a truly favorable environment to attract resources from both domestic and foreign investors, as well as from the people in general. Implementation of laws and policies remains a weak link, Lam said.

He pointed out that there were limitations in administrative reforms and the development of e-government and digital government.

A revolution

Vietnam should carry out a revolution with robust and comprehensive reforms to adjust production relations and create new motives for development. Digital transformation with the application of science and technology was such a revolution that would restructure production relations, making them align with the outstanding progress of productive forces, Lam said.

Digital transformation was not merely the application of digital technology in socio-economic activities but also the process of establishing a new, advanced and modern mode of production – the "digital production mode", in which the prominent characteristic of productive forces was the harmonious combination between humans and artificial intelligence, with data becoming a resource and an important means of production; and production relations also undergoing profound changes, particularly in the form of ownership and distribution of digital means of production.

Changes in production relations will create major impacts on the superstructure, open up a new mode of social governance, create new tools in state management and fundamentally change the interaction between the State and citizens, and between social classes.

The Party chief outlined four key tasks to realize the nation’s digital transformation targets.

The first task is to complete mechanisms and legal system, steadfastly pursuing the goal of a socialist-oriented market economy while keeping up with development trends of the era. For this, it is important to build legal corridors for the digital economy and enact strong mechanisms and policies to promote digital transformation in all socio-economic sectors, encouraging innovation and protecting intellectual property rights.

The second task is to unleash and maximize all resources in society, creating: suitable mechanisms and policies to mobilize enormous resources; and an open and transparent investment climate to draw both domestic and foreign investment for science technology development and innovation. This would also include maximizing human resources and creating breakthrough mechanisms to attract domestic and foreign talents; and building a strategy to develop human resources with adequate knowledge, skills, and innovative and creative minds.

The third task is to reform and build a streamlined and effective state apparatus. This requires slashing unnecessary intermediaries; accelerating decentralization and delegation of power in tandem with enhancing inspection and supervision; perfecting inspection and supervision mechanisms; promoting application of information technology, building a digital platform to connect and share data among agencies and organizations.

The goal is to become one of top 50 leading countries in the world and the third in ASEAN in terms of e-government and digital economy by 2030.

The fourth task is to promote digital transformation alongside ensuring security and safety. This task requires a focus on building a digital society, comprehensively digitalizing state management activities and providing high-level online public services.