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Vietnam To Work On Industry 4.0 Implementation

Vietnam To Work On Industry 4.0 Implementation

Vietnam To Work On Industry 4.0 Implementation

According to Tran Hong Quang, director of the National Center for Socio-Economic Information and Forecast (NCIF), Vietnam has to shift towards an economic model that is more suited for Industry 4.0 due to a weakening of its current comparative advantage in natural resources and labour-intensive production. This is a view that is further reinforced by Luong Van Khoi, NCIF’s Vice Director, who said that Vietnam should focus on revising its economic model as part of the 2016 to 2020 economic reforms and aim towards improved social resources management, higher productivity and national competitiveness.

During this process, it is also essential for the country to identify sectors that have high potential and include them in the new FDI strategy. Citing a OECD research paper in which 66 million workers are projected to be replaced by machines in developing countries, Khoi further added that a number of jobs could potentially be replaced by robots such as factory work and industries such as manufacturing and processing risk being automated and will possess a lowered need for manpower.

In fact by 2025, about 42.8 million employees in Vietnam would be directly impacted by industry 4.0 and around 31 million will have to be retrained or change their jobs, Khoi continued.

Despite this, Le Huy Khoi, Head of the Industrial Policies Strategies Institute’s Study and Market Forecast Division under the Ministry of Industry and Trade, has commented that Industry 4.0 would open up more opportunities for Vietnam to grow its trade and industry sector and will encourage companies to improve their production methods, which will lead to cost reduction and improved productivity. Although, currently, awareness of industry 4.0 is still low among the business community and the technical infrastructure and technological applications have not been met. This was evidenced in a survey of 2,000 enterprises by Hanoi’s Small and Medium Enterprises Association, whereby 79 percent of the respondents indicated that they have not prepared for Industry 4.0, while another 55 percent are still attaining information regarding Industry 4.0 and 19 percent are currently working on Industry 4.0 plans. And of those surveyed, only 12 percent are executing Industry 4.0 plans.

To address those issues, Khoi has recommended that the government focus on education and work towards creating an awareness of Industry 4.0 through the dissemination of information in the political system, enterprises, business associations, research institutes and universities. Government agencies can also facilitate digital economy development, Industry 4.0 participation and application and the liberalisation of investment.

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