The Digital Economy Is an Important Driver of Economic Growth, With Targets of Accounting for 20% of GDP by 2025 and 30% by 2030, Compared With 16.5% in 2023. To Achieve These Targets, the Digital Economy Must Consistently Grow at About Three Times the Rate of GDP Growth.

AI in 2023: reaching every household

In its report on trending searches in Vietnam in 2023, Google noted that AI had become a popular keyword and a hot topic. Many leading technology companies are competing to bring AI applications to end users, and 2023 marked the point when AI was no longer confined to a small community, with applications widely serving millions of Vietnamese people: writing essays, composing poetry, creating literary works, writing reports, generating avatars, and more. Generative AI is making remarkable advances, becoming an increasingly accessible tool and opening up a range of trends in everyday applications. As early as January, when OpenAI did not yet support registration in Vietnam, quite a few people were already finding ways to create or purchase accounts to try ChatGPT.

According to the 2022 Government AI Readiness Index report by Oxford Insights, Vietnam ranked 55th among 181 countries worldwide. In Vietnam, users are highly interested in topics such as “ChatGPT artificial intelligence,” “benefits of artificial intelligence,” and “artificial intelligence software.” Notable applications include banking, where AI is being widely adopted for electronic know-your-customer (eKYC) identity verification and AI chatbots are used to advise customers. In healthcare, VinBigData has used AI (VinDr) to help doctors diagnose diseases more effectively.

In addition to high-profile applications from OpenAI, Microsoft, Google, and others around the world, users are also exploring AI products developed by Vietnamese people. In 2023, many AI products emerged with technologies mastered by Vietnamese developers: FPT launched FPT AI Mentor, Vietnam’s first corporate training advisor; LovinBot announced two products offering AI content-writing assistance for individuals and businesses. Most recently, a large language model called PhoGPT, a specialized version of ChatGPT for Vietnamese users, became the first open-source model of its kind released in Southeast Asia, a few weeks ahead of Singapore’s AI model. Many experts believe that general-purpose AI adoption is expected to surge by 2026, with more than 80% of businesses incorporating general-purpose AI models and applications into their operations, up from less than 5% currently.

Generative AI has enormous development potential

The National Digital Transformation Program identifies four main priorities for 2024: developing digital data, digital governance, developing the digital technology industry, and digitizing economic sectors, thereby creating momentum to increase labor productivity and achieve rapid and sustainable economic development. The specific elements of these four main priorities for national digital transformation in 2024 include developing digital data as a key production factor in the development of the digital economy; ensuring rapid and healthy development of the digital economy through digital governance; developing the digital technology industry as the leading industry supplying technologies, products, services, solutions, and digital content for digital economic development; and digitizing economic sectors in conjunction with improvements in economy-wide labor productivity, output, management, and innovation—this is the main area for the development of the digital economy, opening up new opportunities for development.

The digital economy (DE) is an important driver of economic growth, with targets of accounting for 20% of GDP by 2025 and 30% by 2030, compared with 16.5% in 2023. According to the report “Vietnam’s Future Digital Economy: Towards 2030 and 2045,” Vietnam’s GDP could increase by an additional 0.38% to 1.1% annually under different digital transformation scenarios. Currently, Vietnam’s internet economy, a component of its digital economy, consistently ranks among the fastest-growing in the world. Within the digital economy, the core digital economy (information and communications technology) accounts for more than 60% of total value, while the sectoral digital economy accounts for only just under 40%. Thus, the scope for future digital economic growth lies in the penetration of digital technologies, platforms, and data across economic sectors and fields. To achieve the targets for the digital economy’s share of GDP in 2025 and 2030, the digital economy must consistently grow at about three times the rate of GDP growth.

Regarding the digital economy’s impact on labor productivity, based on the four digital economy development scenarios in the report “Vietnam’s Future Digital Economy: Towards 2030 and 2045,” a “traditional production function” economic model estimated that the digital economy would contribute an annual average of 7–16.5% out of the 100% of overall labor productivity growth during 2020–2030. This additional contribution appears relatively modest in the early years of digital transformation and the initial stage of AI adoption. However, the expectation is that Vietnam will follow the productivity growth pattern estimated by McKinsey, whereby generative AI’s contribution to GDP through productivity gains would be about twice its contribution through the creation of new ways of doing business. A current preliminary estimate projects that generative AI will contribute as much as VND 14,000 billion to the digital economy by 2030, excluding spillover effects on labor productivity growth across the economy.

Vietnam has missed its labor productivity growth target for three consecutive years, and the target for 2024 has been lowered from that for 2023, even though labor productivity growth must be regarded as a driver of rapid and sustainable economic development. In this context, the widespread adoption of AI, particularly generative AI, should be regarded as an important means of increasing productivity and improving the skills of workers across generations, not only in businesses but first and foremost in the public sector. According to the Ministry of Information and Communications, a digital work platform or a virtual assistant supporting officials and civil servants would enable virtual assistants to handle at least 70–90% of tasks, particularly those requiring compliance with numerous regulations and the processing of large amounts of data. This would improve labor productivity and work quality, while making people’s work more interesting by allowing them to focus on creative tasks. Reluctance to take responsibility and act also stems partly from an inability to fully grasp regulations, especially when these documents contain contradictions or overlaps, or are interpreted and applied differently. The Ministry is also directing the development of four main assistants: a virtual assistant supporting officials and civil servants; a virtual assistant identifying contradictions in legal documents; a virtual assistant providing legal support to citizens; and a virtual assistant supporting judges. This is entirely consistent with a major trend in generative AI development in the coming years: generative BYOAI (generative AI that users bring with them to support their work).

Generative AI is rapidly transforming our world, and this trend will continue to accelerate in the coming years. The AI revolution offers opportunities to all countries, especially those that adapt quickly, dare to change, and embrace change. By seizing opportunities and leveraging the benefits of AI, developing countries will be able to achieve breakthrough development and catch up with developed countries, thereby shaping a future that is not merely an extension of the past.

Authors: Prof. Tran Tho Dat, Nguyen Thi Thuy Duong — National Economics University (NEU)

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Link: https://cafef.vn/ai-sang-tao-o-viet-nam-va-tiem-nang-kinh-te-188240123130439532.chn

This is an automated translation. If you notice any errors, please contact the Department of Communications, National Economics University at phongtruyenthong@neu.edu.vn.