From War to Web3: Vietnam’s digital transformation story

Last week, Vietnam's Central Steering Committee on Science, Technology, Innovation and Digital Transformation launched three digital platforms to track and drive the implementation of Resolution No. 57 - a national goal signed into effect last December with the objective of bringing the nation into a digitally-powered future.

This shift toward digital innovation, artificial intelligence (AI) development, and inclusive technology adoption mirrors a broader wave of digital acceleration seen across Southeast Asia. Nations like Indonesia, Thailand, and the Philippines are undergoing similar transitions, driven by rising internet penetration, young tech-savvy populations, and robust startup ecosystems. Singapore, already a global leader in smart technology, continues to set benchmarks with its AI governance and city-wide digital integration. Meanwhile, Malaysia is actively executing its MyDIGITAL blueprint to become a regional digital economy leader. Within this context, Vietnam stands out for the speed, depth, and inclusiveness of its transformation.

Vietnam’s digital journey is rooted in its economic transition in the late 20th century. The introduction of the Doi Moi policy in 1986 marked a turning point, when market-oriented reforms replaced rigid central planning and unleashed a wave of private enterprise that laid the foundation for today’s digital economy.

When the US trade embargo lifted in 1994, Vietnam embraced foreign investment and technology. Tech pioneers like FPT, founded in 1988, began as modest ventures and soon evolved into national champions. Initially focused on food processing tech, FPT pivoted to information technology, securing early partnerships with IBM, HP, and Compaq. This global exposure helped standardise Vietnam’s tech landscape and prepared it for integration into the global economy.

More than two decades down the road, Covid-19 became a catalyst for Vietnam’s digital leap. While global economies stalled, local tech companies like FPT responded with agility. This resilience paid off, leading to new contracts with international firms such as Ford and NXP, reinforcing Vietnam’s reputation as a reliable outsourcing destination.

Since 2020, digital tools such as remote collaboration software, AI applications, and cloud infrastructure have become commonplace. According to CPA Australia’s 2024–25 Small Business Survey, Vietnam leads 11 Asia-Pacific economies in digital transformation metrics. These include e-commerce, digital payments, social media use, and IT investment. Notably, 44% of small businesses prioritised AI in 2024—up from 22% in 2023—and 47% use AI tools for business decisions.

E-commerce is thriving: 91% of small firms earned more than 10% of their revenue from online sales, and 84% relied heavily on mobile payment platforms like MoMo, Moca, and ZaloPay. The payoff is clear: 88% of small businesses reported improved profitability due to tech investments, the highest rate among the surveyed countries.

However, digital growth brings new risks. In 2024, 60% of Vietnamese small firms suffered losses from cyberattacks, prompting 62% to reassess their cybersecurity protocols. Still, optimism remains high: 92% expect growth in 2025, and 93% are confident in the national economic outlook. International expansion is also booming, with overseas revenue projected to rise from 15% in 2024 to 28% in 2025.

Vietnam is emerging as a regional AI leader, thanks to ambitious public-private initiatives. In 2024, Nvidia signed a cooperation agreement with the Vietnamese government to establish a national AI R&D center. It also acquired local startup VinBrain to enhance research capabilities.

Meanwhile, FPT announced a $200 million AI factory to develop generative AI tools, autonomous driving technology, and cloud services powered by Nvidia chips. Vietnam’s AI economy is forecast to reach $120–130 billion by 2040, accounting for 10–12% of national GDP.

Other Southeast Asian countries are making similar AI bets: Indonesia has invested heavily in smart cities and AI talent programs, while Thailand is focusing on agricultural automation and AI-driven tourism analytics. Yet Vietnam's comprehensive, inclusive, and export-oriented strategy gives it a unique edge in the regional AI race.

A major factor in Vietnam’s digital momentum is its focus on future-ready talent. FPT University, founded in 2006, addressed early skills gaps by training software engineers and AI specialists tailored to industry needs. The government aims to expand this pipeline, with a goal of training 5,000 AI professionals and supporting 500 AI-focused startups by 2030.

Tech giants are also investing in talent. Google has partnered with the National Innovation Center (NIC) to provide AI scholarships, startup accelerators, and upskilling programs.

Globally, this emphasis on education and digital literacy echoes the strategies of countries like India and Estonia, which have used tech-enabled talent development as the backbone of their digital economies. Vietnam is now entering that conversation.

Some steps in the journey of Vietnam’s digital ambitions:

Some key infrastructure targets include universal broadband by 2025 and nationwide 5G by 2030. Currently, 26% of the population already has 5G access and more infrastructure is being put in place to serve at least 90% of the population by the end of this year. VNeID, the unified digital ID system, was just made available to foreigners this month.

According to the report of the Central Steering Committee on Science, Technology, Innovation and Digital Transformation, over 73,000 homegrown digital technology enterprises are already operating throughout the country. Major tech corporations are closely involved in the development of digital transformation policies.