FILE PHOTO: Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
HANOI: In the dynamic landscape of South-East Asia, Vietnam is poised on the brink of a technological revolution, aiming to leverage the power of artificial intelligence (AI) to redefine its economy, foster innovation, boost productivity and enhance global competitiveness.
In its July 2024 report, An AI Opportunity Agenda for Vietnam, Google emphasised the critical role of digitalisation and AI in transforming Vietnam’s economy, making it more diversified and competitive on regional and global scales.
The report estimated that AI could generate up to US$835bil in economic benefits across six South-East Asian economies, including Vietnam, by 2030.
To achieve the goal of having the digital economy contribute 30% of gross domestic product (GDP) by 2030 – up from 12% in 2023 – Vietnam must attract significant investment and drive AI innovation.
Google’s research highlighted that AI will play a crucial role in Vietnam’s digital economy, potentially generating an annual economic impact of 1.73 quadrillion dong or about US$69.5bil by 2030.
The study, covering 43 sectors, found that more than half could achieve breakthroughs through AI.
AI is expected to bolster Vietnam’s manufacturing competitiveness, advance the electric vehicle (EV) industry, and help meet green-energy goals. It will also enhance agricultural efficiency, address climate challenges, and support economic growth.
Moreover, AI is vital for Vietnam’s ambition to become a high-income developed country by 2045, driving productivity, attracting investment, creating high-tech jobs, and supporting micro, small, and medium enterprises, according to the report.
Despite the critical role of productivity growth in economic development, Vietnam has missed its labour productivity targets for three consecutive years, with the 2024 goal set lower than in 2023.
The Vietnam’s Future Digital Economy towards 2030 and 2045 report estimates that the digital economy could contribute 7% to 16.5% annually to productivity growth from 2020 to 2030.
Although the impact is initially modest, AI could significantly boost productivity, potentially doubling GDP contributions compared to new business models, according to McKinsey.
“This isn’t merely about typical development; it’s about breakthrough growth. Advancing AI applications will also catalyse the growth of tech startups in Vietnam,” said Do Tien Thinh, deputy director of the National Innovation Centre (NIC).
Vietnam is already harnessing AI to enhance its competitiveness as a manufacturing hub, particularly in high-tech industries like electronics and telecommunications.
Leading Vietnamese enterprises such as Viettel, FPT, VinAI, CMC, and VNPT are at the forefront of AI innovation, demonstrating the technology’s potential to benefit a wide range of businesses.
Investment in AI is also rising, with over US$4.6bil invested in Vietnamese startups from 2014 to 2023, according to the 2024 Vietnam Technology and Innovation Investment report by NIC and Do Ventures.
This reflects Vietnam’s burgeoning status as a centre for technological innovation.
Oxford Insights, in its early 2024 report, ranked Vietnam 59th out of 193 countries and territories for government AI readiness, and fifth in the Asean region. The report highlighted Vietnam’s vibrant economy, youthful and tech-savvy population, burgeoning tech sector, and influx of international investment as fertile grounds for AI innovation.
Research by Thundermark Capital also listed Vietnam and Singapore as the two South-East Asian representatives in the global Top 30 for AI research.
Vietnam’s position in AI development is supported by several key advantages.
The country’s burgeoning digital economy, aimed at contributing 20% of GDP by 2025 and 30% by 2030, provides a strong foundation for AI integration.
The rapid growth of Vietnam’s Internet economy, already among the fastest-growing in the world, further strengthens its position.
Vietnam’s young, tech-savvy population is also a significant asset.
The country has a large pool of engineers and IT professionals, many well-versed in AI technologies. This, combined with a strong emphasis on STEM education, ensures a steady pipeline of talent to drive AI innovation.
Many major international companies see Vietnam as a promising research and development hub.
Recent visits and large-scale conferences featuring foreign tech leaders like Nvidia chairman Jensen Huang and Google AI lead Jeff Dean underscore Vietnam’s potential in the field. — Viet Nam News/ANN
