The Future of Artificial Intelligence in Vietnam: An overview

The Future of Artificial Intelligence in Vietnam: An overview

Table of Contents

Artificial Intelligence (AI) is no longer a figment of our minds or a work of fiction; it is all around us, whether we notice it or not. It has developed dramatically on a global scale in the digital era over the last few decades.

AI has the potential to completely transform economies. In terms of both development and application, Vietnam is well-positioned to benefit and become a leader. In this article, Innovature BPO will look at Artificial Intelligence in Vietnam, discuss how AI is affecting Vietnam, and present some particular use cases for AI.

Is Vietnam Prepared for AI Development?

The Future of Artificial Intelligence in Vietnam: An overview

A country’s or territory’s readiness for AI technology is assessed using three pillars: governance, technology, and data infrastructure.

According to the Ministry of Information and Communication’s 2019 report, Vietnam has over 30,000 ICT enterprises of various sizes, roughly 955,000 IT workers, and over 80,000 university and college graduates with majors in information and communications technology. Furthermore, Vietnam has quickly risen to become the new IT hub in Southeast Asia, as well as one of the world’s favored destinations for IT outsourcing services. Because of the country’s open economic environment and vast labor pool, AI applications in numerous areas have made great development.

When it comes to AI development, however, Artificial Intelligence in Vietnam is thought to have a low starting position. In comparison to the United States, the current world leader in AI, or other Western countries, Vietnam’s AI industry is still in its early stages.

Despite the fact that Vietnam has trailed behind in the battle for AI, it is worth mentioning that this Southeast Asian country is investing heavily in digital transformation in order to catch up and obtain a competitive advantage.

The International Development Research Centre (IDRC) in Canada and Oxford Insights in the United Kingdom jointly produced an annual report in which Vietnam was ranked sixth in ASEAN and 62nd globally for the 2021 Government Artificial Intelligence Readiness Score. Surprisingly, the Readiness Score Artificial Intelligence in Vietnam has hit 51.82 out of 100 for the first time, surpassing the global average of 47.72 and propelling the country 14 places higher than the previous year.

The Foundation of Government

Vietnam quickly grasped artificial intelligence’s actual potential, both now and in the future, as well as its rising significance in the fourth industrial revolution. As a result, the Vietnamese government has made significant investments in artificial intelligence (AI) and other cutting-edge digital technologies such as machine learning, blockchain, big data analytics, the Internet of Things (IoT), and cloud computing. Several government AI policies and programs have been put in place to encourage Vietnamese firms and innovative start-ups to promote AI research, development, and application in new business models.

For example, the government is investing in R&D, offering tax breaks to companies that use AI technology, and encouraging the expansion of the startup environment. The Vietnam AI Grand Challenge, a program launched in 2019 to foster the development of AI technology, is one example. It provides AI businesses and researchers with money, support, and tools to help them develop and commercialize their AI solutions.

Vietnam has also established a number of AI Centers of Excellence at universities and research institutions to promote the advancement of AI technology. The centers support and resource researchers while also collaborating with industry partners to develop Artificial Intelligence in Vietnam solutions for a variety of industries. AI has the ability to significantly alter the way businesses are conducted and to promote economic growth.

Notably, the country recently adopted the National Digital Transformation Programme, which would run from 2025 to 2030. The tangible goal is to double the digital economy’s growth by 2025 and establish a solid platform for future digital transformation processes that will slowly prepare Vietnam for AI. According to the deputy head of the Ministry of Science and Technology, Vietnam’s improvement in its AI Readiness Score can be ascribed to the country’s active participation in technology-based activities and the release of the national policy for AI development.

The Technology Pillar

The technology pillar refers to a country’s or territory’s internal digital capabilities, often known as the technology sector. A nation with a vibrant and competitive tech sector will have enough resources and experience to efficiently embrace, develop, and deploy AI technology in various fields, resulting in a complete Artificial Intelligence In Vietnam ecosystem.

At this point, Vietnam’s Minister of Planning and Investment stated that the ministry had established a digital ecosystem for innovation and new technologies and proposed a national innovation center to support technological breakthroughs and facilitate Vietnamese entrepreneurs’ creative ideas.

The Ministry of Planning and Investment would collaborate with the Ministry of Science and Technology to support Vietnam’s AI communities in their research and development of this digital technology. Furthermore, the ministry stated that it had set all favorable conditions to attract domestic and international investment in Artificial Intelligence In Vietnam. At the Vietnam Venture Summit in June 2019, 18 local and foreign funds agreed to invest $425 million in Vietnamese start-ups over the following three years.

The Infrastructure and Data Pillar

The availability of trustworthy data and safe digital infrastructure that can support AI technology is measured by the data and infrastructure pillar. In comparison to other AI industry titans, Vietnam’s data and computing infrastructure are very basic, with numerous constraints, most notably fragmented and poor-quality data. This represents a significant barrier in Vietnam’s effort to nationalize Artificial Intelligence In Vietnam technologies.

As a result, the country has prioritized the construction, maintenance, and development of data infrastructure in the long run in order to expedite the economic development of AI technology while also facilitating the efficiency and effectiveness of AI research development and application.

Vietnam’s AI readiness score for data infrastructure reached 51.87, representing a significant step forward in the journey toward full-scale Artificial Intelligence In Vietnam deployment in the near future.

Challenges Artificial Intelligence In Vietnam

Vietnam’s “debut” in the AI Readiness Chart of 100 countries is only the beginning of a long-term endeavor to investigate the actual potential of artificial intelligence technology and its applications. As a result, there are numerous obstacles in the path of Artificial Intelligence In Vietnam competing with industrialized countries in the AI industry.

On the limited side, typically, financing and human resources are the most significant impediments to the development of Artificial Intelligence In Vietnam route.

The Future of Artificial Intelligence in Vietnam: An overview


AI technology necessitates significant expenditures in order to create applications with the greatest efficiency and productivity. As a result, the Vietnamese government must urgently commit adequate resources for AI research. So, the national strategy emphasizes the Ministry of Planning and Investment’s critical role in encouraging domestic organizations (such as Viettel, FPT, VinGroup, and VNPT) and capitalists to fund AI development, as well as attracting foreign investors from around the world to invest in the Vietnamese AI industry. This is a “nerve-wracking problem” that the government must address in its own time.

And it appears that things are on the right track since we are seeing some encouraging indicators regarding funding for Artificial Intelligence In Vietnam. Specifically, at the Vietnam Venture Summit 2020, Vietnam obtained a guarantee from both foreign and domestic investors to spend $800 million in the country’s startup ecosystem over the next three to five years. In addition, there are 155 venture capital investors betting on Vietnam. Vietnam’s high-tech application projects in the sphere of digital transformation, including e-commerce, fintech, and AI, have secured nearly $1 million in funding through the Aus4Innovation Programme in 2021. At this rate, Vietnam will quickly overcome financing constraints and boost AI development within the country.

Last but not least, Vietnam was one of the few countries that effectively contained the global epidemic and survived as well as thrived throughout the challenging period, making this country an enticing destination for investment and company start-ups.

AI Experts are in short supply

Vietnam, like most “rookies” entering the AI race, lacks human resources specializing in this technology. Despite the fact that Vietnam has a significant edge over other nations in the area and throughout the world in terms of IT labor force, the country does not yet have a large pool of AI experts, which will make staffing for local AI projects problematic. Over 1,600 Vietnamese are actively studying and working in AI-related sectors, according to World Intellectual Property Organization (WIPO) indices. Only 300 of them are thought to be AI professionals. This suggests that Vietnam’s AI human resources are insufficient.

According to Cisco, the Vietnamese Information Technology (IT) sector would confront a shortfall of approximately 500,000 ICT employees by 2020. Only 400,000 engineers worked in IT last year, while 50,000 IT students graduated. Even fewer engineers are anticipated to be trained in data or AI technologies. Furthermore, many of these engineers are looking for chances abroad. According to a 2018 survey, 57% of people working in AI or blockchain technology would relocate abroad if given the option.

Simply put, Vietnam requires a significant increase in employees with competence and hands-on experience in AI technology. Faced with such a challenge, the government has two top-priority missions ahead of it: nurturing and cultivating domestic AI talent and connecting AI communities in Vietnam with Vietnamese expatriates who conduct research and development of AI for large tech companies from around the world.

The Vietnamese government has planned numerous actions to attain these two objectives. AI education and training have often been systematically introduced in colleges, bringing knowledge and perspective of artificial intelligence closer to youthful generations. In Vietnam, there are now over 50 colleges and academies offering AI-related specialties.

Competing for Talent with Outsourcing Companies

Startups already struggle with a restricted local talent pool, which is exacerbated by the software outsourcing industry. In Outsourcing to Vietnam, some experienced Vietnamese engineers prefer to provide supplemental software components, such as the backend needed for game businesses in China or Japan.

There is a dispute within the software engineering community about whether it is better to work for an outsourcing company versus a company that builds end-to-end products. Outsourcing businesses pay engineers well according to local standards, but their projects are frequently shorter, and competition is severe due to the race to the bottom for cheaper labor. If Vietnamese engineers do not take on those tasks, a task or an entire organization could be relocated to another nation with lower labor. In other words, because the software outsourcing sector is global, working for an outsourcing company may entail great compensation in the near term but possible long-term instability. Vietnamese product firms, on the other hand, would have fewer projects for engineers but may offer long-term career advancement.

The majority of engineers in Vietnam have worked in both outsourcing and product-oriented organizations. According to 2020 research, 43.8% of engineers work in outsourcing organizations, whereas 47.2% work in product companies. The “Make in Vietnam” trend, in which homegrown businesses manufacture globally competitive products, has the potential to shift this equilibrium.

In reality, startups may offer more fulfilling prospects for local engineers than outsourcing firms. Certain skill sets are underutilized in outsourcing since engineers are not required to innovate for their clients. Outsourcing employment is commonly seen as low-value-added labor that contributes only a minor portion of the overall production process. Entrepreneurs in Vietnam are questioning this system, claiming that they can develop higher-value solutions while competing on a global scale. Engineers in a startup culture have greater opportunities to flourish and refine their talents while contributing to technological advances.

What are the benefits of Artificial Intelligence in Vietnam today?

Given the positive legal and infrastructural changes, as well as enthusiasm from the government, entrepreneurs, and tech workers, the Artificial Intelligence In Vietnam ecosystem has grown and has some achievements.

The Future of Artificial Intelligence in Vietnam: An overview


Benefits of Artificial Intelligence in Vietnam for human resources

One of the most significant benefits of Artificial Intelligence in Vietnam is its capacity to automate many mundane and manual jobs, freeing up valuable human resources for more strategic and creative work. This would undoubtedly boost efficiency and productivity across businesses ranging from manufacturing and logistics to healthcare and finance. Furthermore, AI may assist businesses in better-analyzing data and making more educated decisions, resulting in better outcomes and higher revenues.

Benefits of Artificial Intelligence in Vietnam for the tech sector

In Vietnam’s tech sector, AI is already producing new career prospects. As the demand for AI expertise develops, there will undoubtedly be a greater need for skilled individuals in data science, machine learning, software development, and other fields. This will open up new job opportunities for young people while also promoting economic growth and creativity.

Benefits of Artificial Intelligence in Vietnam for the financial sector and fraud detection

AI technologies are being employed in the financial sector to detect fraud, improve customer service, and speed up transactions. Banks and financial institutions are already utilizing AI-powered chatbots to provide 24/7 service and answer client concerns, lowering wait times and increasing customer satisfaction. AI systems can also be used to analyze data and make investment decisions, providing financial firms with improved returns.

AI-powered fraud detection systems are becoming increasingly popular, assisting in the improvement of security and the prevention of financial crimes. With the development of AI-powered financial advisors and the use of AI to assess market trends and make investment decisions, Artificial Intelligence In Vietnam is projected to play an even larger role in the financial industry in the future.

Benefits of Artificial Intelligence in Vietnam for the healthcare

One of the most intriguing advancements in Artificial Intelligence In Vietnam is improved healthcare. Doctors and healthcare professionals can employ AI-powered systems to make more accurate diagnoses, administer more effective treatments, and enhance patient outcomes.

For example, Based on medical history, VMED’s OneAI can now give an accurate forecast of a patient’s likelihood of developing chronic diseases such as cardiovascular disease, diabetes, atrial fibrillation, heart failure, asthma (non-allergic), and chronic obstructive pulmonary disease. It may also view chest X-ray images to aid in the early detection of tuberculosis, lung cancer, and breast cancer.

AI is assisting healthcare workers in identifying individuals who are at risk of developing certain disorders, letting them intervene early and avoid more serious problems from arising. This not only improves patient outcomes but also alleviates the pressure on healthcare providers, who are frequently overburdened and understaffed.

Benefits of Artificial Intelligence in Vietnam for the agriculture

Vietnam’s Artificial Intelligence will have a significant impact on agriculture. Food security is a serious worry in a country with a population approaching 100 million people and a rapidly increasing middle class. Vietnam is one of the world’s major agricultural producers, and artificial intelligence can help enhance crop efficiency and productivity. Precision agriculture is the application of technology artificial intelligence, to enhance crop yields through precise monitoring, analysis, and agricultural management. Already, collaborative ventures like the Viet-Uc Group and AquaEasy are assisting thousands of small shrimp farmers in increasing productivity. AI-powered solutions are assisting farmers in optimizing yields, growing seasons, fertilizer use, and much more.

This includes collecting data on soil conditions, weather, crop growth, water usage, and other aspects using sensors, drones, and other digital technologies to advise decisions on seed planting, fertilization, pest management, and other agronomic procedures. The goal is to boost crop yields while reducing waste and increasing efficiency.

Benefits of Artificial Intelligence in Vietnam for the manufacturing

In Vietnam, AI is already having an impact on production. Vietnam has developed into a manufacturing hub for industries such as electronics, textiles, and footwear. Artificial Intelligence In Vietnam is assisting these industries in becoming more efficient and high-quality.

AI-powered robots work around the clock, increasing production while decreasing the need for human labor. They are configured to, for example, swiftly identify and address problems, saving downtime and lowering or eliminating mistakes. Vietnamese manufacturers may utilize AI-powered robots to automate repetitive and hazardous operations, lowering the chance of accidents and freeing up humans to focus on higher-value tasks. Furthermore, the use of AI in supply chain management and logistics aids in the optimization of processes, decreasing waste and enhancing efficiency.

Universal Robots, a Danish maker of collaborative robots (cobots), encourages manufacturing industry leaders to use its cobots in Vietnam.

Artificial Intelligence in Vietnam compared to Indonesia

The shortage of talent is a structural issue that affects other regional countries as well. With six unicorn businesses, Indonesia’s AI startup ecosystem is significantly further along in its development stages than the rest of Southeast Asia. Nonetheless, its tech labor supply problem remains unresolved. According to Jonathan Kurniawan, an Indonesian AI governance expert, “Tech talent is in high demand in Indonesia, but supply isn’t quite there.” Good skills have an abundance of options. A skilled data analyst may collaborate with five different product managers, basically working on five different products.” Companies might only raise their compensation when their present talent is stretched to its limitations.

Kurianwan also blamed outdated university curricula for part of Indonesia’s engineering shortage: “Universities teach software development, but the curriculum is not updated.” There is no practical experience with Tensorflow or numpy. Computer science students are frequently required to learn on their own, obtain online certificates, attend a three-month coding school, or learn these abilities on the job, where industry tech leaders may educate them on what’s necessary.” Similarly, an APEC report found that 62% of Indonesian enterprises consider a lack of data science and analytics capabilities as a barrier to providing the full value of big data analytics to clients.

Many of the issues raised above are symptoms of a bigger structural issue caused by the fast-changing nature of technology, particularly AI. According to Kearney’s interviews and surveys, entrepreneurs in all five Southeast Asian (SEA), including Vietnam economies face the same talent shortage. More than 85% of respondents say it is difficult to attract expert AI talent, while current technical talent lacks the domain knowledge to apply AI to business problems. These lines of evidence suggest a regional ecosystem that is interrelated and suffering from similar talent difficulties, the resolution of which may necessitate a more systemic approach.

The Future of Artificial Intelligence in Vietnam: An overview
Survey respondents and interviews cited challenges to AI adoption in SEA countries. Source: Kearney

So, does Artificial Intelligence In Vietnam have the potential for development? We have reason to believe that Vietnam has all the right ingredients to soon establish itself as an AI hub thanks to the government’s dedication to and support of the sector. The potential for Vietnam to lead the digital revolution using AI is limitless if it maintains its existing dedication and efforts.

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