Vietnam's burgeoning digital technology sector is on the cusp of significant transformation following the introduction of the new Digital Technology Law (DTL), which is poised to bolster the country's economy and help transition its tech industry to global standards. For the first time, the government explicitly recognizes the digital technology sector as pivotal for economic development, providing not only legal frameworks but also fostering innovation and creativity within the industry.
The law is expected to generate substantial investments, with forecasts indicating the digital technology industry's revenue could reach $152 billion by 2024—a staggering 35.7% increase compared to its 2019 figures. According to official data, Vietnam's contribution to the global digital technology market has also seen growth, rising to 31.8% of the total revenue from just 21.35% five years prior. With around 54,500 active technology companies and 1.67 million workers—an increase of 67% since 2019—the potential for economic expansion is clear.
“Digital technology is truly the driving force leading Vietnam toward the digital age,” noted industry analysts. The DTL aims to establish legal recognition for the tech industry, paving the way for comprehensive policies to support it. By fostering the creation of digital enterprises, the government seeks to encourage economic growth through innovation and design, moving beyond mere assembly and outsourcing.
On November 30, 2024, during the eighth session of the 15th National Assembly, discussions around the law highlighted various facets necessary for the comprehensive development of the digital technology industry. The draft emphasizes important areas like research and development, creating digital infrastructure, and establishing standards for the burgeoning sector.
One significant element included under the DTL is the treatment of the semiconductor industry as a key component of digital technology. The law revises previous frameworks to encompass the entire semiconductor supply chain, ensuring Vietnam establishes itself as not only a consumer but also as a producer and innovator within this high-tech field.
Artificial Intelligence (AI), another cornerstone of the draft law, receives specific attention as the government seeks to define standards and management principles. “The principles of AI development must serve humanity’s prosperity and happiness, and should uphold transparency, accountability, and fair use,” emphasized government officials during the assembly discussions. This move positions Vietnam well to leverage the rapid advancements in AI, integrating them responsibly within its cultural and ethical frameworks.
The digital law also addresses digital assets and cryptocurrency, aiming to establish legal definitions and protections for these intangible assets. It describes digital assets as data-created properties which can be generated, stored, and exchanged electronically, reflecting current technological realities. This framework is anticipated to attract greater investment and innovation within blockchain technology and related sectors.
To facilitate easier business operations, the legislation introduces mechanisms for controlled testing of new technology—a measure aimed at reducing regulatory burdens faced by innovative startups. These controlled environments will allow for experimentation with new digital technologies and business models without the constraints of existing laws, as long as they are managed responsibly and transparently. “Our goal is to cultivate innovation through targeted and flexible regulatory measures,” the government reiterated.
To complement these legislative changes, enhanced incentive policies are being proposed to encourage investment and growth within the digital technology sector. This includes tax deductions, credits for research and development, and support for special projects focusing on key areas like AI, software, and data analytics centers. The government is committed to ensuring these incentives provide greater benefits and are aligned with broader economic goals, avoiding overlaps and disjointed policies.
Overall, the DTL stands as part of Vietnam’s broader strategy to transition to a digital economy. By recognizing the importance of technology within all sectors of the economy, from education to production, the DTL not only aims at fostering domestic growth but also positions Vietnam as a competitive player on the international stage.
The law is reflective of the government's ambition to accelerate the nation's digital transformation. Despite facing challenges—including ensuring adequate infrastructure and educational resources—the potential gains seem promising as the country gears up for the innovative future. Through these initiatives, Vietnam hopes to not only increase its number of tech companies but also nurture homegrown talents capable of international caliber.
A brighter digital future seems on the horizon for Vietnam—a future where technology and innovation drive economic resilience and growth, transforming how industries function and how people interact globally.
