Ho Chi Minh City taps digital economy to power post-merger growth

Ho Chi Minh City taps digital economy to power post-merger growth

Ho Chi Minh City has entered a new growth phase driven by high productivity and advanced technology, with the digital economy as a key driver.

Lam Dinh Thang, director of Ho Chi Minh City Department of Science and Technology, said the city has entered a new development phase driven by high labour productivity and advanced technology, with the digital economy seen as an inevitable growth engine.

"Ho Chi Minh City has made the digital economy one of its key development pillars, setting targets 5–10 per cent above the national average. It aims for the sector to account for 25 per cent of regional GDP this year and 40 per cent by 2030," Thang said at an August 12 seminar on the digital economy as a growth driver for the southern metropolis, co-organised by Ho Chi Minh City Department of Science and Technology and the University of Economics Ho Chi Minh City (UEH).

"Our goal is for the city’s digital economy to truly and effectively contribute to a double-digit economic growth rate starting from 2026," Thanh added.

Photo: Le Toan.

Meanwhile, according to Nguyen Huu Yen, deputy director of Ho Chi Minh City Department of Science and Technology, to develop a strategic roadmap for the coming period, the city needs to rely on five pillars: improving the institutional framework, developing digital infrastructure, enhancing human resource quality, building an innovation ecosystem, and strengthening cooperation and linkages.

"In particular, Ho Chi Minh City will leverage the central urban area’s advantages in services and innovation, Binh Duong’s industrial strengths, and Ba Ria-Vung Tau's seaport and tourism potential, to form a comprehensive digital economy value chain," said Yen.

Assoc. Prof. Dr. Tran Minh Tuan, director of the Department of Digital Economy and Digital Society under the Ministry of Science and Technology (MoST), shared the formula for success in the digital economy.

First, according to Tuan, the digital economy must be measured by online results. "The MoST has deployed an intelligent survey tool on smartphones, allowing citizens to evaluate action programmes. Based on these evaluations, we can directly measure the impact of initiatives in numerical terms, and from there adjust relevant policies."

Second, the wholesale and retail support ecosystem should include e-commerce platforms (such as Shopee, Lazada), customer relationship management systems (salesforce), warehouse management systems, online payment platforms (such as Momo, ZaloPay), and data analytics tools to optimise business operations.

Third, is a demand-supply connection model that coordinates between central and local levels, a structured collaboration aimed at addressing imbalances in resources, products, and services between central and local governments through mechanisms such as information exchange, shared responsibility, resource allocation, and unified policies to achieve socioeconomic efficiency.

In addition, the MoST is implementing plans to enhance the role of small- and medium-sized enterprises (SMEs) in digital transformation. SMEs currently account for 97 per cent of all enterprises and contribute 60 per cent of GDP, but their labour productivity is three to four times lower than the regional average.

"The ministry has developed a set of digital transformation assessment indicators for SMEs, and proposed solutions such as digital signatures, e-invoices, e-commerce, and AI platforms tailored to each sector," Tuan said, adding that SMEs are the focus due to their simple business models and the potential to boost productivity by 15–20 per cent if digital transformation is successfully implemented.

Meanwhile, Assoc. Prof. Dr. Pham Khanh Nam, rector of the School of Economics, Law, and State Management (under UEH), said Ho Chi Minh City should prioritise the development of a shared data repository, encourage digitalisation, and connect data from multiple sources, while ensuring privacy protection and cybersecurity.

At the same time, the city needs to invest heavily in developing technology platforms and high-quality workers, forming an innovation community, and supporting Vietnamese-made technology products.

Despite its many advantages, Ho Chi Minh City also faces significant challenges. One major challenge is the disparity in the level of digitalisation between regions, particularly between Ho Chi Minh City, Binh Duong, and Ba Ria-Vung Tau.

In addition, cybersecurity is emerging as a major issue as the city becomes a mega-urban area, increasing the risk of cyberattacks. Moreover, changing the digital mindset and culture of citizens and businesses, especially SMEs, remains a long journey that will require greater guidance and support from the city government.

VIR