Ho Chi Minh City Accelerates Its Digital Transformation

Ho Chi Minh City is revving up its engines to drive a future powered by advanced technology. With a formidable annual budget of 502 trillion VND (approximately US$20.5 billion), the city is making strategic investments in blockchain technology, artificial intelligence, and 5G connectivity. This robust initiative is part of a national roadmap that envisions a digital economy contributing 30% of GDP by 2030 and 50% by 2045—a playbook for transforming economic landscapes.

Investing in Tomorrow’s Technology

At the heart of this transformation lies a commitment to allocate at least 3% of the annual budget toward research and development in emerging technologies by 2030. This proactive strategy is designed to stimulate innovation and cultivate an ecosystem that supports thousands of tech startups. By establishing five centers of excellence in key technological fields, the city is creating an environment where both established enterprises and new ventures can thrive.

“The new initiative is the city’s local implementation of Resolution 57-NQ/TW…”

Such a focused investment not only boosts the local tech scene but also makes a strong statement about the city’s ambition to lead in digital transformation. Business executives and tech enthusiasts should note how such funding safeguards innovation, much like maintaining a high-performance engine that powers continuous progress.

Raising Standards in AI and Blockchain

Vietnam has earned recognition for its leadership in blockchain technology, frequently topping indices such as the Chainalysis ranking. Blockchain’s success is a boon for the nation, providing a blueprint for secure, transparent digital transactions. However, despite these accolades, Vietnam’s artificial intelligence capabilities still rank 39th globally and 5th in Southeast Asia. This gap highlights the challenges of catching up with global leaders in AI, even as concerted efforts are underway to bridge the divide.

By applying lessons learned from its blockchain advancements, Ho Chi Minh City aims to accelerate AI research and applications through targeted investments and international partnerships. Such measures are expected to boost the overall ecosystem for AI in business, driving efficiencies and new opportunities across industries.

Competing in High-Tech Manufacturing

The digital push extends beyond software and into the realm of hardware with significant investments in chip-making—a critical ingredient for modern electronics. Intel’s US$1.5 billion facility in Ho Chi Minh City stands as a testament to the region’s growing prowess in making chips for electronics. Meanwhile, a competing US$1.6 billion facility in Bac Ninh, operated by Amkor, is intensifying the race. This healthy competition is expected to spur innovation and attract additional investments in high-tech manufacturing.

Such moves not only enhance the technological infrastructure but also position Vietnam as a formidable player in the global supply chain for electronics, ensuring long-term competitiveness and growth.

Transforming Everyday Commerce with Cashless Payments

The city’s ambition to achieve an 80% cashless payment rate is set to redefine daily commerce. Shifting away from physical currency can streamline financial transactions, reduce inefficiencies, and broaden financial inclusion across diverse communities. This transformation is comparable to upgrading the operating system of an economy—making transactions smoother, data more secure, and services more accessible to everyone.

What This Means for Business Leaders

• How will the 3% R&D budget allocation be managed?
  

  Strategic public-private partnerships and stringent oversight will help ensure that this investment translates into measurable technological innovations.

• What strategies will boost Vietnam’s AI readiness?
  

  Increased collaboration with global tech leaders, targeted educational initiatives, and a robust R&D framework promise to accelerate AI advancements.

• How does competition in chip-making affect the tech landscape?
  

  The rivalry between facilities in Ho Chi Minh City and Bac Ninh is likely to drive further innovation and attract even more investments, strengthening the country’s high-tech manufacturing sector.

• What measures support the growth of startups and centers of excellence?
  

  Government incentives, supportive regulatory frameworks, and dedicated funding are all part of a comprehensive strategy to nurture a vibrant startup ecosystem.

• How will cashless payments reshape everyday commerce?
  

  A shift toward digital transactions is expected to make commerce more efficient, secure, and inclusive, ultimately transforming how businesses and consumers interact.

A Balanced Approach to a Digital Future

The journey of Ho Chi Minh City encapsulates both the promise and the challenges of a digital transformation. With robust investments in blockchain and chip-making already yielding significant returns, addressing gaps in AI represents the next frontier. For those in the business arena, these initiatives offer a clear glimpse into how strategic technology investments can reshape urban landscapes and redefine global industries.

As policy, innovation, and infrastructure converge, the emerging tech ecosystem in Ho Chi Minh City serves as a powerful case study for balancing ambition with pragmatic execution—a roadmap that other cities, and indeed businesses worldwide, might well consider emulating. How about them apples?