Challenges of the fourth industrial revolution

Investment in science and technology must be increased

Identifying challenges

According to Prof. Dr. Ngo Thang Loi from the National Economics University, Vietnam faces two major challenges in taking advantage of the wave of digitalization, artificial intelligence and other new technologies sweeping the world.

First, Vietnam’s economy has low productivity, while the country doesn’t have world-leading economic groups or corporations, and scientific and technological applications remain poor.

Therefore, the fourth industrial revolution might enlarge the development gaps between Vietnam and developed countries, unless the country adopts the right policies and thinking.

Second, the fourth industrial revolution results in strong development of new technologies and robots. Accordingly, the way Vietnam intends to develop some industries, with the advantage of low labor costs, will be significantly affected. The development of science and technology can lead to mass unemployment, as a large number of Vietnamese laborers will not be able to adapt to new technologies, resulting in a bigger gap between the rich and the poor, and ultimately in potential social conflicts.

Its declarations notwithstanding, many argue that Vietnam is not yet committed to the development and application of science and technology. They point to the fact that spending for science and technology (including state investment and capital from businesses and the community) accounts for only one percent of the country’s gross domestic product (GDP). The rate is 2.2 percent in China and 4.5 percent in the Republic of Korea.

Thinking innovation

Despite the many challenges, the fourth industrial revolution offers certain opportunities for Vietnam. One is the fact that the country can benefit from other countries’ scientific and technological achievements that are more advanced, according to Dr. Luu Bich Ho, former director of the Ministry of Planning and Investment’s Development Strategy Institute.

The fourth industrial revolution is introducing advanced technologies that help create new products and services, increase productivity and promote innovation. This causes pressure on domestic producers to enhance investment in science and technology in order to create higher quality products that attract consumers. By doing so, businesses will grow strongly and contribute to increasing the competitiveness of the economy and helping Vietnam achieve its industrialization and modernization targets.

Ho said the biggest challenges faced by Vietnam in participating and benefiting from the fourth industrial revolution are the low skill levels of its labor force and poor investment in science and technology. It’s time for Vietnam to confront and overcome these challenges to avoid being left behind, he said. This means increasing investment in science and technology and renovating education to develop a qualified workforce capable of receiving and applying advanced scientific and technological achievements in order to increase labor productivity.