2023 TECH INVESTMENT TRENDS IN VIETNAM
By SAVVi Team
1. Artificial Intelligence (AI):
With significant growth on a global scale, Artificial Intelligence (AI) has become ubiquitous in the today’s digital era. The technology spans across numerous industries, impacting many daily applications and revolutionizing daily life. Today AI is a key drive in the development of software and e-commerce, human resources, healthcare, retail, education, telecommunications, and many more.
The Government AI Readiness Index 2022 by Oxford Insights ranked Vietnam 55th globally and 6th in the ASEAN, which is 7 ranks higher compared to 2021. Vietnam’s AI Readiness Score also reached 51.82 out 100, surprisingly surpassing the global average of 47.72. Vietnam’s digital economy is expected to reach52 billion USD by 2025. Many experts expect to see major breakthroughs in AI technology in a variety of fields in 2023.
In addition to the considerable on-going investments made in AI and digital technologies, the Vietnamese government has established numerous national AI policies and initiatives that encourages companies and start-ups to accelerate AI research, development, and application in their current business models. At the same time, AI communities in Vietnam will have the support of the Ministry of Planning and Investment, along with the Ministry of Science and Technology, in studying and developing the technology. These Ministries have been facilitating favorable conditions to attract both domestic and foreign investments in the country’s AI landscape. Especially in Ho Chi Minh City, Vice Chairman of the municipal People’s Committee Duong Anh Duc confirmed the city’s current and future focus on training human resources, investing more in infrastructure to promote AI research and development.
Despite various challenges, particularly in funding allocation and lack of deep domain experts in the AI field, positive signs and realistic examples of Vietnam’s digital transformation efforts include the implementation of AI in real-time handling customer support, forecasting demand for using the metro, and forecasting and analyzing traffic behavior.
2. 5G connectivity
The arrival of 5G technology makes it possible to reach 10 gigabits per second download speed, which is a 100x faster than its predecessor 4G. By the fourth quarter of 2022, Vietnam ranked 10th among countries with the most 5G-connected devices globally, per The Internet data analysis website Speedtest.net.
This new technology is expected to become the digital foundation and infrastructure of a new digital economy. The 5G technology without a doubt will help accelerate Vietnam’s digital transformation, stimulate innovation and the rapid digitalization of the local industry, resulting in significant economic value. The technology will enable and facilitate the development of smart cities. More convenient public services can be provided with real-time platforms.
With super high-speed wireless connectivity provided by 5G, revenues are expected to rise in numerous sectors, with the top 5 listed by HIS Markit as machinery manufacturing, information and communication, commerce and trading, public services, and construction. The deputy director of the Ministry of Information and Communications’ Telecommunications Authority shared that 55 out of 63 provinces and cities across Vietnam have been testing 5G technology. At this time, 5G services are mainly provided at several locations, such as industrial parks, schools, research institutes, and government agencies. By 2030, 100% of Vietnam’s population is expected to have their devices connected to the 5G network.
3. Cloud computing
Cloud computing technology not only eliminates the costly expense of equipment and human resources, but also backs up and recovers data, and provide remote access to data at multiple redundant sites on the cloud provider’s network. According to GlobalData, the expected worth of the global cloud computing market is $734 billion, with an increase of 15% from 2022. In addition to cost reduction and greater flexibility, the enormous potential of cloud computing when coupled with AI paves the way for emerging technologies such as robotics and IoT (Internet of Things).
In Vietnam, the cloud computing market has reached US$133 million in 2021 and is expected to rise to $500 million by the year 2025, according to Viettel IDC. The IBM Institute for Business Value (IBV) reported that the hybrid cloud services, a mixed computing, storage, services environment between private and public cloud services, will be 43% of expenditure from numerous Vietnamese enterprises by 2023. Currently, Iaas (Infrastructure as a Service) is the dominating type of cloud service in Vietnam market due to its solutions in storage, networking, and remote data access.
The greatly increased demand for cloud storage stemmed largely from the presence of the Covid-19 pandemic with regards to distance learning, health checks, teleworking, and video conferencing. The general director of VNG Le Hong Minh noted that Vietnamese create 1.7 gigabytes of data per day. As a result, it is of the utmost importance that Vietnamese enterprises can process these billions of raw data while still ensuring the protection and privacy of users’ data. According to the general director of VNPT IT Tong Manh Cuong, the government not only should adopt strategies to assist in the digital transformation of businesses, but also build its own infrastructure for cloud computing to offer online services. To enable a robust marketplace protecting various stakeholders’ interests, a strong and transparent legal framework should be legislated to foster investment in digital infrastructures and services. In turn, this will support the growth of promising start-ups and encourage technological innovation in this digital era.
Complicated and large-scale cyberattacks pose a significant risk to Vietnam’s digital economy, which is expected to reach 43 billion USD by 2025. With nearly 5,500 instances of cyberattacks recorded within just five months in 2022, Vietnam is among the top 10 nations most exposed to cyberattacks, malware attacks, and website intrusions. Security holes in routers, security software, online meeting applications are the main ones reportedly facilitating cyberattacks. Information security risks can also stem from data harvesting systems, as noted by Nguyen Van Tuan, a information security consultant from VNPT Information Technology Company.
Regarding cybersecurity trends in 2023, Sudhir Ethiraj, Global Head of Cybersecurity Office (CSO) at TUV SUD, emphasized the importance of boosting investments in cybersecurity, with small and medium-sized enterprises focused on cost-effective cybersecurity solutions. As Vietnam’s digital transformation is rapidly accelerating, numerous organizations will be encouraged to implement continuous automated methods to facilitate an environment where best cybersecurity decisions can be made quickly and effectively. With cybersecurity expected to be built into the core of every organization, automation will become commonplace, facilitating more secure environments for innovation and commercialization. The ultimate benefits of cybersecurity, when implemented with cloud services, will be widespread making data protection, gathering, storage, and processing in Vietnam much more effective.
According to the deputy head of Office 3 of the Cyber Security and Hi-tech Crime Prevention Department, ensuring cybersecurity is among Vietnam’s top priorities to facilitate digital transformation. Businesses are highly encouraged to install updated systems to detect any unauthorized access into their databases, handle them in a timely manner, and deploy suitable countermeasures.