Vietnam will not be a partner to Industry 4.0 'if it is stuck in Bureaucracy 1.0': WB

Speaking at the Industry 4.0 Summit 2018, Ousmane Dione said that Vietnam has successfully inserted itself into select global value chains and achieved a remarkable reduction in poverty. However, in the years ahead, disruptive technologies will present both challenges and opportunities for remaining on this successful trajectory.

In terms of digital adoption, Vietnam shows strengths and challenges. The World Bank’s Development Report 2016 on Digital Dividends ranks Vietnam’s Digital Adoption Index at 0.46 out of 1-point scale, higher than the average of global lower middle-income countries.

Internet penetration is 54 percent, and 40 percent of Vietnam’s population are social media users.

However, according to a recent survey of Alphabeta, Vietnam fares lowest in the region in other digital measurements.

In the labor market, the ILO forecasts that 56 percent of all employment in Cambodia, Indonesia, the Philippines, Thailand and Vietnam is at high risk of being replaced with technology over the next decade or two. This poses the question for Vietnam of how to operate to forge ahead, or even leapfrog.

Ousmane Dione suggested that Vietnam must upgrade the way its government functions because technologies alone cannot solve the puzzle and “Government will not be a partner to Industry 4.0 if it is stuck in Bureaucracy 1.0”.

A three-factor formula, or a tripod including technologies, institutions, and people, is necessary for Industry 4.0 to really help Vietnam achieve its development aspirations.

In term of technologies, Ousmane Dione recommended that Vietnam needs to grasp integrated digital solutions.

“The government should adopt a holistic approach to how technology can support reforms for impact and transform its development outcomes. An interoperability infrastructure as a foundation would strengthen the Government’s relationship, optimize its investments and link central level agencies, national and sub-national governments,” said he.

Robust open data among government institutions and between the government and the public, will allow data to be used in ways that yield dividends for tomorrow.

Besides, the representative of World Bank said that Vietnam should promote fintech as well as use blockchain to boost efficiency and safeguard data privacy.

In terms of institutions, Ousmane Dione stressed that Vietnam government needs to put in place institutions and streamline its business processes to enable innovation.

Moreover, in human capital terms, “the country must invest now in skills and health for the workforce of the future in the context of aging population and lower the share of Vietnam’s population in working age,” said he.

The World Bank Country Director for Vietnam insisted that investing in research and development will be critical for Vietnam to join the frontiers of Industry 4.0. “Made in Vietnam” should be replaced with “Researched and Developed in Vietnam.”