It’s 2050 in Vietnam’s commercial hub, Ho Chi Minh City. At lunch time, office workers pour out onto the streets, queueing at the stalls to collect a steaming hot bowl of pho. Some things never change. But there’s no exchange of cash or even swipe of credit cards.
Instead, people pay for their food – and almost everything else from transport to taxes – using the country’s own digital currency. Today, this doesn’t yet exist, but Vietnamese civil servants are preparing for future scenarios where this and other emerging tech reshapes the nation.
The country’s Ministry of Science and Technology is working with Data61, a specialised unit from the Australian Government, to identify where Vietnam could be in 20 years. “The work we’re doing is to determine the trends that will shape the development of Vietnam’s digital economy”, says Dr Lucy Cameron, who is leading this project.
This approach is called foresight planning and was first developed for the military, but is increasingly used by businesses and government. The Singapore Government has its own foresight and scenario planning unit, while the EU has units to help planners across Europe, Cameron says. Malaysia has also started training civil servants in foresight analysis, and the UNDP Global Centre of Public Service Excellence is championing the approach in the developing world.
Cameron’s team are using data to identify “megatrends” that could disrupt Vietnam. They have created a “trends database” to identify common features using data from the World Bank, Asian Development Bank and national statistics. “It will be about plotting possible futures and what actions will improve resilience for the Vietnamese community and economy.”
She has identified seven megatrends that will matter to Vietnam. These are in a preliminary stage and include emerging tech; globalisation and international trade; skills; urbanisation; environmental resilience; and innovation networks.
But data does not tell the full story, she adds. Governments need to be aware of disruptive and new forces with no historical indicators, like blockchain. To complete the foresight analysis, Cameron and the Vietnamese government conducted workshops in the country’s three largest cities to hear from government leaders, tech industry, businesses and startups. “We tested what we considered to be the megatrends, asked if there’s anything missing or new trends that we couldn’t see.”
What are the futures?
Cameron’s team are now using these megatrends to identify scenarios that could take place in the future. There are four scenarios being discussed with the Vietnamese Government.
One is where Vietnam continues on its current trajectory and there’s little change. The second is one where there is major digital transformation, which changes Vietnam’s institutions and the regional economy. Third is where Vietnam’s tech industry grows, but digital adoption is low so it becomes an outsourcing hub for developed nations. Fourth, where domestic adoption is high but the tech industry is small, so it has to import tech expertise.
These trends also help identify “critical points of change” in the future – like the scenario where Vietnam develops its own digital currency, Cameron says. Another could be a massive cyber attack that might destroy trust in critical systems, like online banking.
What will this mean for Vietnam?
What do these scenarios mean for Vietnam’s goal of becoming a high income country? “One of the major challenges to Vietnam is increasing labour productivity”, Cameron says. These scenarios can help the government identify areas of investment that will improve productivity and ensure the economy grows sustainably. “What happens in the next five years is going to be critical to achieving that aim.”
As about 38% of the workforce is unskilled, “many jobs in agriculture and manufacturing are vulnerable to automation”, says Cameron. Analysis of the country also shows that “the lack of highly skilled IT professionals is leading to vulnerabilities, particularly in cyber security”. Vietnam was ranked 101 out of 193 countries – below Myanmar, Laos and Cambodia – in a global cyber security index in 2017.
Tech will be crucial to increase productivity in traditional growth areas like manufacturing and agriculture. “Vietnam needs to apply and/or develop some new technologies such as AI, automation, biotech, big data,and blockchain in order to boost our manufacturing as well as agricultural production,” says Nguyen Duc Hoang, the Head of Technology Development at the State Agency for Technological Innovation, Ministry of Science and Technology.
The country has already started to trial new tech in agriculture. A fish farm, for example, is using IOT sensors to control water quality and reduce fish diseases. Meanwhile, ”blockchain systems are being piloted to improve food provenance in Vietnam and encourage better farming practices”, Cameron says.
Online retail tech will have a huge impact on small businesses, which employ more than half the country’s working population. E-commerce is already one of the fastest growing sectors of the economy, but Vietnam needs stronger fintech platforms to create more trust and continue growing the industry. “We have great potential in developing e-commerce, but the financial infrastructure on the internet is currently weak and unsecure”, notes Nguyen.
The government plans to use data to improve services and support to businesses. It is developing “open national databases” on citizens and businesses that will provide companies with information on business trends, Nguyen says. “Future projects should focus on collecting as much data as possible since the statistical system in Vietnam is still very weak.”
Cameron and the Vietnamese Government will take these draft scenarios and trends back to civil servants and businesses to test them further. “What we want is for each of the scenarios to be plausible and possible in 20 years’ time,” she says.
The final four scenarios will affect policy decisions and plans across government, she adds. It will “feed into a number of planning documents across innovation, ICT development, communications and information policy.” It could also change how industries are supported and education is funded. The scenarios will provide a “better basis to make those long term decisions”, she says.
This project will also help identify future areas of collaboration between Australia and Vietnam, Cameron hopes. It has been funded by the Australian Government’s Department of Foreign Affairs, as part of a larger programme called Aus4Innovation. “This is the first study in a whole raft of innovation programmes between Australia and Vietnam to identify areas where we can do some technology exchange and assist in their development through innovation,” Cameron says.
Whether Vietnam’s economy is reshaped by a new digital currency or some other emerging tech, the country’s civil servants are certain that they need to be prepared for new disruptions. The pho will still be there in 2050, but everything else is a future that needs to be written.