The Role of Technology in Vietnam's Social Innovation
Technology, from simple tools to modern marvels, has been the instrument of our transformation.
With the right technologies, countries have been able to resolve social innovation challenges
standing in the way of their society’s growth.
One prime example is Vietnam. By embracing technology, Vietnam seeks to further cement its
place as one of the most dynamic countries in Southeast Asia.
Like other countries, Vietnam started with labour-intensive manufacturing before moving on to
technology-intensive sectors.
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IoT upgrades for the manufacturing sector
Like other countries, Vietnam started with labour-intensive manufacturing before moving on to technology-intensive sectors.
Electronics has emerged as a spearhead of the sector. In 2013, high-tech products contributed
28.7% to the country’s GDP. By 2014, Vietnam was ranked 3rd in the region and 12th in the world
in the export of electronics.
Success has been attributed to low labour costs of around US$190 a month in 2015, much lower
than China’s. This cost advantage though, is compromised by weak productivity levels. The
average labour productivity was only about 7% of China’s in 2012.
In May 2017, Vietnam’s Prime Minister called on the country to embrace disruptive technologies
such as the deployment of IoT in industrial automation.
IoT, also known as the Internet of Things, uses smart sensors and big data analytics to enhance
manufacturing efficiency and lower the cost of production. Coupled with robotics and automation,
IoT can help by maximising production efficiency and reducing human errors.
As a champion of IoT, big data analytics and automation, Hitachi has successfully implemented
these technologies in Japan, Singapore and other countries around the world.
Besides manufacturing, the government is also disrupting the finance sector by drastically
reducing cash transactions and improving electronic payment methods.
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Towards a cashless society
Besides manufacturing, the government is also disrupting the finance sector by drastically
reducing cash transactions and improving electronic payment methods.
They have announced a policy to reduce cash transactions to less than 10% of total transactions
in supermarkets, shopping malls and distributors by 2020. It further requires 70% of Vietnamese
over the age of 15 to own a bank account by the same time period.
One of the reasons for this policy lies in Vietnam’s e-commerce market. Worth US$400,000 in
2015, it was predicted to grow to US$7.5 billion in 2025. As of 2015, about 90% of Vietnam’s
online orders were paid in cash at the time of delivery.
To help, Hitachi is working with various partners to offer non-cash payment services for online
shopping, as well as cash transfers via mobile phone. There are plans to expand it to pay for
Vietnam’s first subway, highly anticipated in the congested Ho Chi Minh City.
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Easing congestion in Ho Chi Minh City
As of June 2017, a total of 37 congestion hotspots were recorded in Ho Chi Minh City, while 131
roadworks were taking place simultaneously.
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Easing congestion in Ho Chi Minh City
As of June 2017, a total of 37 congestion hotspots were recorded in Ho Chi Minh City, while 131 roadworks were taking place simultaneously. Reports revealed that commuters spent an average
of 53 minutes a day stuck in traffic.
Ho Chi Minh City is home to nearly 13 million people, 8.5 million motorbikes and 627,000 cars.
Every day, an estimated number of 1,000 motorbikes and 180 cars are registered, a situation likely
to worsen as Vietnam is set to cut tariffs on ASEAN car imports in 2019, reducing car prices by
42%.
The authorities have been considering various options such as elevated roads, changing major
streets into one-way streets and even banning private vehicles in downtown areas. The long term
solution to this urbanisation challenge though, is an extensive metro system.
Hitachi has been tasked to deliver the first metro system for Ho Chi Minh City. Named Line 1, the
metro will connect the centre of Ho Chi Minh City with its Northeast gateway in 2018. As the first
of many, Line 1 will play a critical role in relieving the congestion in Ho Chi Minh City.
Applying technology to resolve society’s challenges is central to Hitachi. Social innovation is not a
role just for policymakers, but a role we hope to share, as we co-create a better world together.
At Hitachi, our expertise in IT and Operational Technology helps to advance social innovation and
raise the quality of life in the communities we serve.