Development potential

The IT industry and its development potential

Worldwide IT spending to be forecast to grow 5.1% in 2023

Digital transformation has proven its impact on navigating companies through uncertainty and helping them to fully utilize every opportunity to recover.

According to the latest forecast by Gartner, worldwide IT spending is projected to increase by 5.1% to 4.6 trillion USD in 2023, which is greater than the 2022 growth rate of 3%. This is due to stronger demand as enterprises push forward with digital business initiatives in response to current economic turmoil.

Despite the significant obstacles posed by global supply chain disruptions, high inflation, and political instability, the overall enterprise spending on DX is increasing. Digital transformation has proven its impact on navigating companies through uncertainty and helping them to fully utilize every opportunity to recover.

Global DX spending is forecast to reach 3.4 trillion USD in 2026 with a five-year compound annual growth rate (CAGR) of 16.3%, according to the IDC. Nearly 30% of worldwide DX spending will come from the Discrete and Process Manufacturing industries, where Robotic Manufacturing, Autonomic Operations, and Self-Healing Assets are among the leading use cases.

Other key industries with high demand for digital transformation include Professional Services and Retail, Back-Office Support and Infrastructure. The Securities and Investment Services industry will experience the fastest growth in DX spending with a five-year CAGR of 20.6%, followed closely by Banking and Healthcare Providers with CAGRs of 19.4% and 19.3%, respectively.

Worldwide IT spending

4,600 billion VND

Global DX spending

3,400 billion VND

Higher demand for IT adoption to cope with challenges

64% of Boards of Directors expect to increase risk appetite in 2023 - 2024, said Gartner. Recession, economic uncertainty, and inflationary pressures are among the top three external threats/constraints to growth. BODs are willing to accept greater risk in expanding product lines, transforming ways of working, and entering new markets.

In current global conditions, the qualities of flexibility and adaptability have never been as fundamentally valuable for enterprises as they are today. System reengineering is also expected to take place in a variety of organizations in order to build resilience during times of uncertainty and enhance responsiveness.

Technological leaders must become more agile and adaptable in decision-making. Increasing collaboration between the data and analysis, AI and software engineering practices will be critical for building adaptive systems. In addition, AI engineering will be vital for building and operationalizing composable architectures.

Vietnam to accelerate the "Digital Nation" model

Top 50 countries

E-government

30% GDP

Digital Economy

80,000

Digital technology enterprises

185 billion USD

Revenue from the ICT

25 billion USD

Foreign direct investment into high-tech industries

860 million transactions

The National Data Exchange Platform

One of the key initiatives is the implementation of the DX on a national scale led by the Information and Communications industry, aiming at the dual goals of three-core-pillar development toward “Digital Government - Digital Economy - Digital Society” and the coordination of Vietnamese tech giants to go global.

The journey of national digital transformation whilst upholding the core values of all the above three pillars will continue to be prioritized. The focus is on developing digital platforms to deliver services on demand, incorporating emerging technologies to create new services, proposing a government policy framework for digital data, earning values, and promoting socio-economic growth.

The government also set targets for the period 2024-2025. Specifically, Vietnam's E-Government aims to be in the Top 50 by 2025. The percentage of completed online applications should reach 80%, while the number of transactions through the National Data Exchange Platform will be approximately 860 million, and the rate of open data provision of state agencies may reach 100%.

With the advice of the Ministry of Information and Communications, the Prime Minister approved the National Strategy for Digital Economy and Digital Society Development to 2025, with the vision to 2030, including the goal of developing the digital economy to account for 20% of GDP by 2025 and 30% of GDP by 2030. In the 2024-2025 orientation, Vietnam will promote the development of the digital economy to reach 20% of the GDP. The number of enterprises using e-contracts may reach over 80% of the total, and the number of SMEs using digital platforms will be around 50% of the total. In 2022, the contribution of Vietnam's digital economy accounted for 14.26% of the GDP.

To nurture the 10 most prominent technology corporations that generate more than 01 billion USD annually in revenue to take pole position in the global race for digital innovation.

Based on the development strategy of the ICT industry, the total revenue of the IT, electronics, and telecommunications sectors may reach 165 billion USD in 2023. Furthermore, it may increase to 175 billion USD in 2024 and 185 billion USD by 2025.

The contribution of digital technology firms to GDP in the next three years will be between 6 – 6.5% per year. IT industry exports will reach a value of around 137 billion USD in 2023, 148 billion USD in 2024, and 160 billion USD in 2025.

By 2025, digital technology's annual revenue growth rate will be twice Vietnam's GDP. Hence, Vietnam may have around 80,000 digital technology enterprises by 2025. Moreover, digital technology products and services designed and manufactured domestically are expected to meet about 50% of the needs of state agencies. Besides, the country will be nurturing the 10 most prominent technology corporations that generate more than 01 billion USD annually in revenue to take pole position in the global race for digital innovation.

Additionally, Vietnam aims to be among the top five countries in the world in terms of revenue from software services and the production and distribution of mobile games. There will be at least eight localities nationwide, with earnings from the digital technology sector reaching over 01 billion USD in value. In addition, Vietnam targets attracting at least 25 billion USD in foreign direct investment into high-tech industries.