It’s perhaps no surprise that foreign investment is finding its way into Vietnam’s education sector in greater numbers, given the country’s long-standing belief in the importance of a good education. With large sums being outlaid by families on sending their children overseas to study, the appearance of high-quality, international-standard schools and universities is also good news for the country’s economy.

The world experienced a degree of turmoil during 2019, with trade tensions going unresolved and talk of a return to widespread protectionism. Though coming through the year largely unscathed, Vietnam is nonetheless at the mercy of global movements. While 2020 is likely to see it continue its impressive growth journey, care must be taken to avoid the negatives and seize upon the positives as global circumstances play out.

Vietnam fully recognizes that prosperity into the future depends greatly on sustainable development. Waste from production needs to be curbed, and in this regard there have been many calls for the country to move from a linear economy to a circular economy. The time has come for all involved to consider not only how to recycle and re-use waste from production, as well as daily life, but also to begin to identify viable alternatives to damaging products. 

The path towards digitalization is perhaps more problematic for agriculture than in other sectors. Sizeable investment in modern technology is coming from major players but the sector is marked by small landholdings held by farmers, which makes large-scale change a challenge. A new association has been established to improve technological infrastructure, and information to enterprises and farmers is also key to success.

Vietnam’s private sector has been tasked with taking the country’s economy forward into the future. The business environment is continually improving and further efforts are a prerequisite to the sector fulfilling both its potential and its role in development. The Party and government are both fully on-board, which puts the private sector in a position to rely on its own strengths and do the hard work needed to take Vietnam on the path to global integration.

Technology has the potential to change the way both students and adult learners go about gaining the knowledge needed for today’s ever-changing world. While they are in a position to access large swathes of information online, there remains scope for face-to-face learning to accompany technology and provide an outstanding level of education. Institutions, meanwhile, also stand to benefit a great deal from adopting the latest technology in their operations.

Insurtech is hoped to make taking out insurance policies a much more straightforward experience and address Vietnam’s low insurance penetration rate. Startups have a role to play in bolstering growth in policy numbers and protection, and some work side-by-side with insurers seeking to gain stronger capabilities in technology to stake out market share and drive penetration forward.

Digitalization is very much in vogue in Vietnam’s banking sector. Fintech players are throwing out something of a challenge to traditional banks in terms of different services, especially cashless payments. Indeed, a lot is being done all round in regard to cashless payments as this is one of the government’s top priorities and e-commerce will only grow in the future.

Proptech, or property technology, is now making its presence felt in Vietnam’s property industry. Not only is
buying and selling made easier, with more accurate valuations, technology also allows for more straightforward management over apartments, providing greater customer care and satisfaction. Modern data capture is also to the benefit of investors, who can gain broader access to information regarding locale and comparable investments.

Tourism joins a host of industries in standing to gain a great deal as digitalization fully takes hold. Smart tourism development is the catch-word of the moment, as the country looks to become a major travel destination. Industry players will need to improve their technology and make it known to potential guests exactly what it is they offer. Travellers now have a virtually limitless source of tourism information and competition is sure to heat up into the future.

Vietnam stands to benefit a great deal from the digital economy if it can make the appropriate changes as they become necessary. Among these are government policies to encourage the broader use of technology as well as improvements to institutions and the relevant legal frameworks. Perhaps no one stands to do better than startups, who tend to have technology in their DNA. In the modern era, those who act quickly will win out.

Vietnam is doing better than most in terms of gender equality in the workplace but there is still some way to go. One field where women fare particularly well is in the digital economy, where they have found it less daunting to become business owners or use their skills to move up the career ladder and secure management positions. The number of successful women nowadays provide great examples for the younger generation to follow and build upon.

Fast-moving consumer goods (FMCG) have recorded impressive growth over recent years, though something a slowdown is being seen in urban Vietnam. One key target market is Millennials, but approaching them is anything but straightforward, as traditional marketing methods no longer apply. They have money to spend, though, and an eagernesss to do so, presenting a great deal of promise for brands that win their favor.

With the requisite number of countries having ratified the CPTPP, the wide-ranging trade pact is set to come into effect early in the new year. For Vietnam, it promises greater investment and trade with a group that accounts for 13.5% of global GDP. Membership also means that the country must join the others in cutting tariffs and following a host of rules that, while difficult, will only make its economy stronger.

Agriculture, forestry and fisheries has long been a strength of Vietnam, given its fertile soil and abundant workforce. Performance, however, has often fallen short of expectations. The sector has been undergoing a major restructure for many years now, the results of which have begun to bear fruit. Issues remain, but the greater use of high-technology and the increasing presence of foreign investors auger well for continued growth.

Vietnamese enterprises have only recently begun to give R&D the attention it deserves and looked to apply science and technology in product development. Foreign investors have given R&D activities a much-needed boost, with many having manufacturing facilities in Vietnam also choosing to locate R&D centers in the country. The government is also keen to see greater investment in R&D, recognizing not only the potential but also the need.

Millennial entrepreneurs will largely be the ones taking Vietnam's economy forward as Industry 4.0 plays a more important role globally. More adept at technology than previous generations and more exposed to the outside world, it's hoped that their abilities and desire will see Vietnam bolster its profile in the region and the world with superior products and services.

Celebrations of 45 years of relations between Vietnam and Japan are ongoing this year. Japan has actively supported Vietnam in a host of endeavors, in particular ODA and FDI, and tho two countrios also boast a complementary trade relationship that continues to blossom. Japanese enterprises are arriving in or expanding their existing projects in Vietnam as they view the country as an investment destination of choice in Asia.

The travel industry, in Vietnam and around the world, is experiencing an unprecedented level of change. Locally, international operators are arriving in increasing numbers and the concept of homestays is beginning to take hold among property owners and tourists alike. The greatest challenge for the industry worldwide, meanwhile, is the advent of new technologies that allow tourists to book virtually every aspect of their holiday online.

Vietnam’s real estate market has caught the eye of many foreign investors following the introduction of new and amended laws and policies from the government. Regional players such as Alpha King have taken note of the opportunities and are keen to change the skyline in the country’s major cities. Ten years on from the last downturn it’s in everyone’s interest to monitor the possibility of a “bubble” reappearing and take action as necessary.

Companies large and small, domestic and foreign, have begun to comprehend the important role corporate social responsibility (CSR) can play in the success or otherwise of their business. Many grapple with doing it right, however, including which activities to conduct and which personnel to assign to the task. Some have even gone beyond CSR, introducing the concept of Creating Shared Value (CSV) as a means of better reaching out to the community.

Human resources in Vietnam have generally struggled to stay abreast of the country’s economic growth. Senior positions are particularly difficult to fill, with a period of training being an accepted part of the employment landscape in almost all positions. Workplace productivity is also at the low-end regionally, despite salaries being on the increase. Issues must be addressed for enterprises to continue driving the economy forward.

Women have been slowly but surely moving up the corporate ladder to CEO, Chairwoman, and board member at many Vietnamese enterprises. The 25% of senior positions they hold, however, tend to be in smaller concerns. The number of powerful women at the helm of major enterprises provides others, particularly younger women, with the knowledge that skills, abilities and hard work can take them as far as they wish to go.

Growth in fast-moving consumer goods (FMCG) is rising every year on the back of greater availability, higher incomes, and a taste for something sweet or savory. As Tet nears, sales go higher than at any other time of year. Overall, the FMCG market sees ongoing change in products available and where they are purchased, both in urban and rural areas. Producers and retailers must therefore keep their eyes on the trends to stay in the game.

Amid a difficult global climate, Vietnam has much to celebrate from its economic and political achievements in 2017. Its economy is ticking along nicely, with handsome macroeconomic results, rising FDI, and a trade surplus. On the political front, it successfully hosted the APEC Summit  and, together with Japan, leads the push to introduce a trade pact that will supercede the TPP. All eyes and hopes are now firmly on 2018.

Vietnam and South Korea have been celebrating the 25th anniversary of diplomatic ties this year. South Korea has proven to be among Vietnam’s most valued partners over the quarter of a century, with rising trade, investment, and support, which are expected to continue well into the future. Similar in cultures, the peoples of the two countries have also established ties that make for a special relationship.

After much planning, the APEC Summit is now upon us. As host, Vietnam has selected four priorities it sees as vital for the bloc’s continued growth and prosperity. Views may differ on the details, but it’s in the interest of all 21 member economies to reach a level of consensus that enables APEC to build upon the successes of the past. All eyes are now on Da Nang. 

The Ministry of Finance's proposai to increase a number of tax rates has raised questions about what effect it will have on the economy, the business community, and consumers. While bridging the budget deficit is clearly the goal, many economists point to Vietnam's chronic overspending as being in more urgent need of repair. As simply a proposal, what the changes may mean is a question looking for an answer, but the overall response has been less than enthusiastic.

The potential of Vietnam's tourism sector has been spoken of for some time, and while tourism numbers continue to rise and related infrastructure improves almost on a daily basis, there are still many obstacles that put a break of full development. Now considered a key economic sector, greater efforts are being made by all stakeholders to address issues of concern in the sector and reap the benefits.

The advent of social media has been a boon for budding entrepreneurs using the platform to earn either a little extra cash or, in some cases, quite a lot. So much so that tax authorities are now keen to have these vendors register as a business and meet the tax obligations on their earnings. It’s proving a difficult task, however, given the nature of the platform and the ability to remain relatively anonymous. Nonetheless, efforts continue.

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Vietnam Economic Times is the publication of Vietnam Economic Times group (Thời báo Kinh Tế Việt Nam), offering timely authoritative news as well as insight and opinion on business, finance and politics issues of Vietnam. 

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Vietnam Economic Times Magazine - April 2018

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