Vietnam needs to get ready for Fourth Industrial Revolution

The Industry 4.0 Summit and Expo 2018 took place in Hanoi from July 12-13 under the theme of “Vision and Development Strategy in the Fourth Industrial Revolution” with the attendance of nearly 1,800 representatives from localities, domestic and foreign experts, businesses, and embassies.

Opening ceremony of the Industry 4.0 Summit (Source: VNA)

The event, jointly held by the Vietnamese Government and the Party Central Committee’s Economic Commission, saw leaders of ministries and sectors joining experts on smart industry and information technology in discussions on the development strategy and application of Industry 4.0.

     PM Nguyen Xuan Phuc delivers speech at the Industry 4.0 Summit. (Photo: VNA)
     PM Nguyen Xuan Phuc delivers speech at the Industry 4.0 Summit. (Photo: VNA)

Talking to participants, Prime Minister Nguyen Xuan Phuc said with the resolve of the whole political system and the will of the people, Vietnam is ready to overcome any challenges ahead, moving forward to grasp opportunities presented by the Fourth Industrial Revolution.

He said Vietnam has been actively researching new global technologies – such as the Internet of Things, big data, and artificial intelligence – in an effort to improve its competitiveness and boost innovation.

However, PM Nguyen Xuan Phuc admitted, Vietnam is still slow in accessing the core and the latest trends of Industry 4.0.

While Industry 4.0 brings about both opportunities and challenges for every country and its people, low-income countries like Vietnam may still be left behind if they fail to swiftly grasp new strides in science and technology – Deputy PM Vu Duc Dam

To truly capitalise on its opportunities and minimise any unwanted impacts of the Industry 4.0, the Vietnamese Government is determined in building focused long-term orientations and concrete policies. The country also needs the support of development partners, businesses, and international experts with the wave of scientific-technological breakthroughs as well as its increasing integration into the world, he noted.

The PM offered some key solutions such as enhancing cooperation with foreign partners in accessing the Industry 4.0; updating on development trends and experiences in the world, especially experiences in dealing with such unwanted impacts as unemployment and social problems; further connecting domestic and overseas Vietnamese sci-tech experts; and promoting relations with other countries, international organisations, and multinational enterprises to select suitable models and experiences for application in Vietnam.

Domestic and foreign representatives at the summit (Photo: VNA)
Domestic and foreign representatives at the summit (Photo: VNA)

At the summit, PM Phuc thanked those countries and international organisations – including UN agencies, the World Economic Forum, the Organisation for Economic Cooperation and Development, and the World Bank – who have stood side by side with Vietnam in its development process.

Head of the Party Central Committee’s Economic Commission Nguyen Van Binh at the summit (Photo: VNA)
Head of the Party Central Committee’s Economic Commission Nguyen Van Binh at the summit (Photo: VNA)

However, an irrational approach will make Vietnam lag behind regional countries in terms of technology, and face redundancy of unskilled labourers, and inequality in society, he said, adding that soft power, cyber space security and trans-boundary cyber-crimes are other challenges that need to be tackled.

Some speakers at the summit said Vietnam is currently adequately prepared, compared to other countries, for the Fourth Industrial Revolution. They suggested the country prioritise education and training, especially in technical skills, while issuing policies to encourage information technology application in all spheres.

There were also five conference sessions debating mega trends of the Fourth Industrial Revolution, namely the building of smart cities, the development of smart manufacturing industry, the next generation of banking and finance, and visions and development strategies for smart agriculture.

Meanwhile, an international expo held on this occasion housed stalls introducing solutions and services in such key areas as agriculture, industry, energy, telecommunications, health, transport, finance-banking, and e-commerce.

The highlight of the event was the appearance of Sophia, the world’s first robot citizen. The special guest responded to various questions related to sustainable development and potential to apply artificial intelligence in production.

Sophia, the world’s first robot citizen,responds to Vietnamese reporters’questions. (Photo: VNA)
Sophia, the world’s first robot citizen,responds to Vietnamese reporters’questions. (Photo: VNA)

Vietnam calls for science technology experts

Vietnam continues the call for more incentives for experts, scientists, as well as domestic and international enterprises to accompany Vietnam in its adoption of the Fourth Industrial Revolution, stated Prime Minister Nguyen Xuan Phuc while hosting a reception for experts, scientists, and representatives of organisations and enterprises participating in the Industry 4.0 Summit and Expo 2018.

   Prime Minister Nguyen Xuan Phuc meets with experts, scientists, and       representatives attending the summit (Photo: VNA)
   Prime Minister Nguyen Xuan Phuc meets with experts, scientists, and       representatives attending the summit (Photo: VNA)

At the meeting, guests hailed the role played by the Vietnamese Government in shaping and developing technology amidst the Fourth Industrial Revolution.

They expressed hope that the PM and the Government will give timely and suitable policies so as to aid a breakthrough in the area of artificial intelligence, and suggested that the Government should create widespread consensus among the society, thus creating “digital chances” for enterprises and people to engage deeper with Industry 4.0 practices.

Foreign representatives hail Vietnamese Government’s roles in shaping technologies in the context of Industry 4.0.(Photo: VNA)
Foreign representatives hail Vietnamese Government’s roles in shaping technologies in the context of Industry 4.0.(Photo: VNA)

Representatives from businesses proposed that the Government help enhance the quality of human resources, especially high-quality personnel in the field of information technology.

Besides, the Government should build special policies for IT enterprises, while continuing to reduce administrative procedures and connecting points, thus creating favourable conditions for enterprises to launch new technologies.

Speaking at the meeting, Head of the Party Central Committee’s Economic Commission Nguyen Van Binh affirmed Vietnam’s special focus on developing IT, and that Vietnam will consider the building of specific policies following the model of a “legal framework 4.0” to create optimal conditions for enterprises and people to take advantage of technological productions in the future.

Highlighting the significance of the Industry 4.0 Summit and Expo 2018, PM Phuc expressed his hope that the delegations will give answers to the question of how Vietnam can become successful in the Fourth Industrial Revolution and also clarify some of the Industry 4.0-related concepts.

Participants should contribute to the design of policies and solutions for Vietnam to actively catch up with the revolution, he said.

The PM stated that Vietnam is integrating deeper into the world economy with 15 new generation free trade agreements, with an increasingly open economy and high GDP growth. The country has been strongly affected by the world’s economic fluctuations, including those pertaining to Industry 4.0 and artificial intelligence.

Vietnam has formed a strong ecosystem for renovation, he said, holding that it is important to continue designing and completing its policies and legal framework. This will aid a faster expansion of Industry 4.0, as well as the greater science and technology revolution, he noted.

The PM underlined that currently, the legal system of Vietnam has matched international law, including in the sensitive areas of telecommunications, banking, and insurance.

Vietnam has jumped 12 notches on the Global Innovation Index for 2017 and two for 2018, the PM stressed but also acknowledged that Vietnam is still weak in the stage of implementation, requiring more drastic measures to enhance the speed of IT application, especially among science and technology officials and enterprises.

   Vietnam leaps two places in GGI 2018 (Photo: VNA)
   Vietnam leaps two places in GGI 2018 (Photo: VNA)

He asserted that Industry 4.0 brings both opportunities and challenges for each country, business, and individual, and that they should raise their awareness of the issue to apply more scientific advances.

Building smart cities – trend of Industry 4.0

Vietnam has made progress in applying applications of the fourth industrial revolution in various areas of life, including smart urban development.

Hanoi gears towards smart urban area 

Hanoi aims to become a smart and sustainable urban area in the future, which will also help fulfill some of the city’s growing demands, said Chairman of the municipal People’s Committee Nguyen Duc Chung.Speaking at a symposium in Hanoi on July 13 as part of the Industry 4.0 Summit and Exhibition, Chung said, like other super urban areas in the world, Hanoi has faced challenges such as rapid urbanisation and migration flows, along with issues regarding planning, traffic, security, health care, education, energy, housing development, and environmental pollution.A smart and sustainable urban model must ensure convenience, safety, and hospitality for residents on the basis of the application of major Industry 4.0 technologies, he noted.

According to Le Quoc Huu, Chief Architect of Smart City of mobile network operator Viettel, the Vietnamese Party and Government have given clear directions on using the advantages of Industry 4.0 and developing information communication technology (ICT) infrastructure.

Huu, who also joined a smart urban development project in Vietnam, said the Government has been stepping up the building of e-government recently.

Most public services are now online (88 percent), he said, adding that major ICT and telecom groups such as Vietnam Posts and Telecommunications Group (VNPT), Viettel, FPT and CMC Corporation have been setting up departments specialising in studying and developing technological applications and smart urban area solutions.

Vietnam has several advantages for the work, such as good telecommunication infrastructure and a high rate of internet users (54 percent of the country’s population). In 2016, Vietnam ranked 79th among the 139 countries in networked readiness index (NRI) and stood third in terms of telecommunications affordability. However, there are still difficulties in building smart urban areas, especially limited capital and lack of international standards, Huu said. He referred to public-private partnerships as an effective way to mobilise social investment, particularly from enterprises, to build smart cities.

Readiness of Vietnamese firms for Industry 4.0

The readiness of enterprises in Vietnam, and foreign countries in general, for the Fourth Industrial Revolution was debated at a symposium in Hanoi on July 13.

The symposium, themed “Smart Production Development: Vision and Solutions for Sustainable Development,” took place within the framework of the Industry 4.0 Summit and Exhibition. The event is expected to help Party think tanks, State management agencies and the research and business circles set forth guidelines and policies to step up technological application and development.

The impacts of Industry 4.0 on Vietnam’s society and economy are becoming more and more visible, thus requiring the Government and business circle of Vietnam to adopt strong reforms to cope with both positive and negative effects – Minister of Science and Technology Chu Ngoc Anh  

Delegates at the event also looked into mechanisms and policies which need to be streamlined in order to push ahead with smart and high-tech application in production, and thus improve the productivity and competitiveness of various enterprises and the economy.

Representatives from the world’s leading technological firms shared their experience in implementing Industry 4.0, as well as building, managing, and operating digital and smart factories.

At the symposium (Photo: VNA)
At the symposium (Photo: VNA)

The participants said information and communication technologies, plus other new trends of the Fourth Industrial Revolution, have generated both challenges and opportunities for business administrators.

Cao Duc Phat, permanent deputy head of the Party Central Committee’s Economic Commission, said smart factories with breakthrough technologies will change traditional production methods, creating new products with outstanding quality.

The automation and artificial intelligence technology will mean the cheap unskilled labour force may lose some of its advantages in the industrial sector and require a workforce suitable to the new situation, he said.

Moreover, natural resources have been gradually replaced by new synthetic materials, the official said, noting that major technological progresses in renewable energy production has helped ease the reliance on fossil fuels.

Banks make great strides in technology application

Vietnam’s banking sector has invested in developing technology amid the sweeping changes the 4th Industrial Revolution is bringing to the way people live and work. According to economic experts, the prominent technological advances of the revolution such as Internet of Things (IoTs), Big Data, Artificial Intelligence (AI) and blockchain technology have offered great opportunities for Vietnam’s banking system.

They help Vietnamese banks access international markets, enhance their ability to apply modern technology and make banking products and services more modern and efficient.

Banks make great strides in technology application.(Photo: VNA)
Banks make great strides in technology application.(Photo: VNA)

Dr. Nguyen Viet Loi , Director of  Institute for Financial Strategy and Policy under the Ministry of Finance, said the impact of the 4th Industrial Revolution on Vietnam’s banking sector can be divided into two phases.

From 2008 to 2015, the advent of cloud computing, open-source software, 3G/4G mobile data, smart phones, data analysis and social networks encouraged entrepreneurs to join the financial market, paving the way for financial technology (FinTech).

From 2016-2020, the development of artificial intelligence, blockchain, data science, digital identification and biometrics will lay an infrastructure foundation to transform personnel usage, focusing on using artificial intelligence instead of traditional bankers. Digital identity has become the footing of basic identification and been secured through biometric factors such as voice recognition or fingerprints.

Experts predicted that by 2020, the four most-affected areas of FinTech will be consumer banking, transfers and payments, asset management, and insurance.

Findings from a survey on banking services, user behaviour and trends in Vietnam released by the International Data Group (IDG) Vietnam in 2017 showed that e-banking solutions are increasingly used for convenience and to save time. Some 81 percent of respondents said they have used e-banking solutions for transactions, compared to only 21 percent in 2015.

Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh speaks at the event (Photo: VNA)
Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh speaks at the event (Photo: VNA)

Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh said that commercial banks have developed new services in the direction of full digitisation.

Outstanding services include the auto banking model (Livebank) of Tien Phong Bank (TPBank), the digital bank Timo of Vietnam Prosperity Bank (VPBank), the digital banking strategy of Orient Commercial Joint Stock Bank (OCB); Digital Lap of Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and  the Military Commercial Joint Stock Bank (MB) with the virtual assistant application Chatbox.

Nguyen Hung, General Director of TPBank, said digitalisation is applied to all banking products and services from payment, money transfer, lending, saving to financial management.

The finance-banking sector is at the forefront of opportunities to join the Fourth Industrial Revolution. With a population of nearly 100 million by 2025, and one of the world’s highest smartphone usage rates, Vietnam is considered one of the countries able to thoroughly modernise finance-banking services – Party Central Committee’s Economic Commission Ngo Van Tuan 

The development of digital banking models, such as Timo or LiveBank, is an example of this trend, enabling banks to meet young customers’ need for banking services anytime and anywhere, he noted.

Ngo Thi Hang from the Department for inspection and supervision of domestic credit institutions under the SBV’s Banking Supervision Agency said the emergence of the 4th Industrial Revolution brings opportunities to Vietnamese banks to extend outside of the country, expand their activity and build their brand abroad.

In addition, thanks to the revolution, they can also access and expand supply of appropriate banking products and services to those who do not currently have bank accounts in remote areas, she said.

However, she noted that besides the promising opportunities, the revolution also poses many challenges to Vietnam’s banking and finance sector.

Hang stressed the need to build new laws for banking sector reform, adding that banks’ business models and financial resources for basic construction investment need to be fine-tuned to adapt to the trend of high technology application.

According to Director Loi, the SBV has been setting up a Steering Committee on Fintech, which is working to develop a legal framework for this area.

However, there is still a lack of policy mechanism to attract investment in Fintech, he noted.

Technological development can drive agricultural restructuring

Vietnam should capitalise on advancements in technology to restructure its agriculture based on three key pillars, said Deputy Minister of Agriculture and Rural Development Ha Cong Tuan. Tuan made the suggestion as part of his opening remarks at a seminar on the visions of and solutions to a smart and sustainable system of agriculture, which was held in Hanoi as part of the activities at the Industry 4.0 Summit and Expo 2018.

According to the official, the first pillar is the application of technology, particularly high-tech, to agricultural production on a larger scale. The second is promoting the reorganisation of agricultural production towards forming supply chains, with enterprises placed at the centre, and towards allocating support from farmers and cooperatives in terms of supply, technological application, origin tracing, and trademark building. The third covers serious and practical institutional reform, making business climate transparent, and improving competitiveness to boost domestic and international investment in agriculture.

He said Vietnam exported 36.4 billion USD worth of farm produce in 2017 and the figure is likely to reach 40 billion USD this year. The official also pointed out some of the shortcomings of agricultural development in Vietnam, which include products falling short of potential, scattered production, low value added farm produce, and the low rate of technological application.

   Exports of key farm produce up 9.7 percent in H1. (Photo: VNA)
   Exports of key farm produce up 9.7 percent in H1. (Photo: VNA)