Barriers to digital transformation facing Vietnamese businesses

Struggling with numerous obstacles

In the field of personal data protection, although Viet Nam has issued Decree No. 13/2023/ND-CP, implementation in practice remains challenging. Many small and medium-sized enterprises (SMEs) still lack understanding and resources to ensure compliance. In terms of cross-border data management, storing information on overseas servers remains common, while regulations on data transfer abroad and the requirement to establish local servers in Viet Nam (as stipulated in Decree No. 53/2022/ND-CP) continue to pose difficulties for businesses.

In product traceability management, although the Ministry of Science and Technology has issued Circular No. 02/2024/TT-BKHCN (effective from June 1, 2024), guidance from authorities and enforcement by businesses remain insufficient, leaving the problem of unclear product origins widespread.

Another obstacle lies in the habit of manual paperwork and hesitation to adopt new systems, while many customers are still unfamiliar with electronic contracts or online verification, making digital transformation less effective than expected.

From the perspective of a company providing RFID-based traceability solutions, an important component of Viet Nam’s national digital transformation programme—Pham Van Tho, Chairman of the Board of Viet Nam Anti-Counterfeiting Technology Joint Stock Company (ACTIV), remarked that while the application of digital technology in Viet Nam is advancing rapidly, the legal framework has yet to catch up.

He also noted that the number of SMEs is rising quickly, but many business owners lack legal awareness, leading to incomplete compliance. Furthermore, the substantial costs associated with infrastructure, equipment, software, cloud services, specialised personnel, and ongoing maintenance and training remain a major burden for businesses.

From a regulatory perspective, Pham Van Quan, Deputy Director of the Department of Industry under the Ministry of Industry and Trade, stated that Viet Nam’s digital infrastructure and technology ecosystem are still underdeveloped. The AI infrastructure remains weak, lacking big data and high-performance computing platforms necessary for industrial-scale development.

Cybersecurity and data protection are also pressing challenges, as the growing number of internet-connected devices and production lines increases the risks of data breaches and cyberattacks, necessitating appropriate state-issued standards and management regulations.

Moreover, awareness of digital transformation among businesses is uneven; some remain reluctant to adopt new technologies due to lack of information or fear of risk. This highlights the need for greater guidance and support from regulatory authorities.

Removing key bottlenecks

According to Mai Thi Thanh Oanh, Deputy General Director of Coc Coc Company Limited, the Government should continue to remove legal barriers and ensure fair competition between domestic digital platforms and international technology corporations, while maintaining the requirement that Vietnamese user data be stored within the country. She also stressed the need for policies that support partnerships between businesses and academic institutions to develop a high-quality technological workforce — one that is both technically proficient and market-savvy.

Le Thu Hang, Deputy Head of the Business Consulting Division at the Ha Noi Investment, Trade and Enterprise Promotion Centre, noted that the private sector continues to face numerous barriers in accessing capital, resources, technology, and supporting infrastructure. Therefore, she stressed that finalising policies, dismantling institutional bottlenecks, and removing barriers to unleash the sector’s potential and create breakthroughs is crucial to enhancing the internal competitiveness of Vietnamese enterprises.

“The private sector still faces many barriers in accessing capital, resources, technology, and supporting infrastructure.”

— Le Thu Hang, Deputy Head of the Business Consulting Division (Ha Noi Investment Promotion and Business Support Centre)

The reality demonstrates that to ensure coherence between legislation and implementation, the Government needs to issue more detailed and flexible regulations that can keep pace with the rapid development of technology. Pham Van Tho stressed the importance of broad consultation with experts and the business community to ensure feasibility, while also urging the prompt issuance of technical standards, norms, and model procedures accompanied by clear and practical guidance for enterprises.

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