The nature of the Fourth Industrial Revolution, or Industry 4.0, is an institutional revolution, according to Nguyen Van Binh, Politburo member and head of the Party Central Committee’s Economic Commission.

Resolution No.52 recently issued by the Politburo requests the National Assembly and the government to revise and perfect legal frameworks as well as issue new mechanism to pilot and encourage the development of new products, services and business models emerged from a digital economy, Binh said at a forum on Industry 4.0 held in Hanoi on October 3.

Accroding to Binh, the Industry 4.0 is a global trend on the back of rapid advancement of science and technologies, in which the focus is on digital technologies that bring mass transformation to social life and business activities..

Binh added the resolution on the Industry 4.0 takes priority on promoting science, technologies and innovation in all fields, aiming to establish smart cities, e-government and eventually a digital government.

Participation in the Industry 4.0 would bring positive impacts on economic growth, however, Vietnam’s level of readiness in joining this trend remains low, Binh said.

Binh attributed flaws in Vietnam’s current legislation to the present situation. For example, legal framework for activities in a digital or sharing economy has not been created, while Vietnam still lacks regulations permitting the pilot implementation of new products, services and business models from the Industry 4.0, particularly those in relation to private data, digital identification and verification, among others.

Mechanism for venture capital

To develop a digital economy, Le Dang Dung, CEO of Viettel, said it is essential to link big data centers and legal frameworks to develop 4G and 5G networks.

Dung urged government agencies to timely issue license for network providers in developing next-generation technology with simplified procedures.

Additionally, national database, such as database on citizens, national resources, enterprises, among others, is a vital part of a digital economy, Dung said, saying there should be incentive policy to encourage enterprises with sufficient financial capabilities and resources to join this field.

Dung recommended the government provide a mechanism for venture capital, in which all parties must accept the risk nature of a project, instead of having to comply with complicated procedures for project investment.

Similarly, Tran Thanh Hai, CEO of Be Group, said Vietnam needs to gather sufficient resources, from human factors to technological foundation to grasp opportunities coming from the Industry 4.0.

This would require incentive polices from the government to encourage investors to join fields of big data, or artificial intelligence (AI), Hai added.

For example, Hai said the government could consider providing incentive tax policies for people working in innovative industries, while enterprises operating in fields of big data, AI, should also receive incentives for investment expansion.

At the forum, Deputy Prime Minister Vu Duc Dam said the government would issue a proposal allowing pilot implementation of new business models and products.

Nevertheless, given the uncertainty of the Industry 4.0, Vietnam is required to have capable human resources to take advantage of the current trend, at the same time be ready to adopt to any change that comes from new business models.

Nguyen Chi Dung, minister of Planning and Investment, said the upcoming national strategy on the Industry 4.0 would focus on building an e-government towards the goal of digital government for greater transparency and efficiency.