Digital conversion will help Vietnam increase labor productivity by 8-10%

Representative of the Department of Computerization said, according to the forecast, if there is no change in number, the average labor productivity increase of Vietnam in the coming years is about 5 – 6%, but thanks to the conversion of the number we have can increase productivity by 8-10%.

Also, according to the representative of the Department of Computerization, Ministry of Information and Communications, the transformation has posed many challenges for Vietnam, which can include big challenges such as: enterprises will be more bankruptcies if they are delayed, number change, network security, lack of manpower, privacy protection or the risk of losing jobs in digital conversions.

However, agency representatives of the Ministry of Information and Communications are directly researching and drafting a National Number Transformation Project, which also says that Vietnam has great opportunities to make breakthroughs and developments in digital transformation.

Analyzing in detail the opportunities for Vietnam to increase labor productivity through digital conversion, the representative of the Department of Computerization said, according to the forecast, if Vietnam does not convert the number, it will increase the average labor productivity in the coming years, it is about 5-6%, but thanks to digital conversion, we can increase productivity by 8-10%. “When the labor productivity has increased to 8-10% thanks to the digital transformation, Vietnam is able to overcome the middle income trap,” emphasized the representative of the Department of Computerization.

In addition, thanks to the digital transformation, Vietnam will have the opportunity to conduct smart economic and social fields, promote innovation, start up technology, especially strengthen and enhance get national competitiveness.

Currently, Vietnam’s national competitive ranks 77th in the world, 6th in ASEAN. If speeding up the number conversion, according to the representative of the Department of Computerization, Vietnam will be able to bring national competitiveness to the Top 3 position, Top 4 ASEAN regions in the coming time.

Referring to social opportunities, representatives of the Department of Computerization said that, thanks to the digital transformation, the public agencies’ activities will be open and transparent, contributing to reducing corruption. “At that time, we had a more effective government and especially through a digital transformation that can narrow the gap between the rich and the poor, the digital divide. Those are great opportunities that digital transformation will bring to Vietnam,” said the representative of the Department of Computerization.

Assessing the current situation of Vietnam, according to the draft 1.05 of the National Shift Project, after more than 30 years of renovation, Vietnam’s economy and society have achieved great achievements. According to the World Bank’s assessment, the innovation process has helped bring the Vietnam from one of the poorest countries in the world to become a middle-income country, with an increasingly high position in the international arena. However, compared to developed countries, Vietnam is still a middle-income country, the level of competition in the economy is not high. One of the main factors affecting people’s level of income is labor productivity. Vietnamese labor productivity is still very low, even compared to other countries in the region.

Specifically, according to the analysis report from data of the General Statistics Office, the average labor productivity of a Vietnamese person is equal to 1/23 Singaporeans, equal to 1/6 of Malaysian, equal to 1/3 of Thai people. The main cause of low labor productivity is low labor capacity (knowledge, labor skills), the level of application of science and technology in limited production and business.

According to the assessment of the human resources index of the World Economic Forum (WEF) for ASEAN countries in 2016, 41% of Vietnam’s human resources are rated low skills, only 10% are evaluated highly skilled. The report “The readiness for the future of the manufacturing industry” published by the WEF in January 2018 shows that Vietnam is not among the countries ready for the future manufacturing economy. In particular, a number of indicators are rated as weak as “Technology index and innovation” ranked 90/100; “Human capital” index ranked 70/100. Component indicators such as “Technology acquisition in enterprises”, “The impact of ICT on new services and products”, “Innovation capacity” rank 78/100, 70/100 and 77 respectively/100.

Besides, Vietnam is also facing the challenge of losing jobs in the context of the impact of artificial intelligence as well as robots. According to the International Labor Organization, about 70% of jobs in Vietnam are at high risk of being replaced by automation in the next two decades. Vietnam is identified as a high-risk country severely affected by high rates of workers working in the garment, agriculture and retail sectors, which are at high risk of being replaced.

Productivity and Quality Office