The race to break through in the digital age

The logos of OpenAI and ChatGPT on a screen in Toulouse, France. Photo: AFP/VNA

As traditional development models are gradually showing their limits, many countries have proactively shifted direction, actively exploiting technology to reshape the economy, improve productivity and competitiveness. From developed economies such as the US and the European Union (EU) to developing countries in Asia and Latin America, the wave of digitalization and innovation is creating profound changes in development strategies.

The role of innovation

The power of innovation and digital technology is increasingly spreading globally. They help businesses operate much more efficiently. Tools such as artificial intelligence (AI), the Internet of Things (IoT), or big data help automate work, optimize production and business processes, and significantly reduce costs, thereby increasing labor productivity in all fields. Not only that, technology also creates completely new economic playgrounds, such as giant e-commerce platforms, convenient financial services on smart devices (Fintech), or sharing economic models (such as car booking, house rental via application). This promotes the emergence of new and more flexible ways of doing business.

At the national level, being at the forefront of technology and innovation brings a huge competitive advantage. Countries that are quick to apply technology will attract more investment capital, talent and create products and services with higher value in the international market. However, the impact and approach to digital transformation vary across regions. Developing countries see this as an opportunity to "leapfrog" and skip the costly intermediate stages of technology development. However, they also face challenges of underdeveloped network infrastructure, lack of human resources with technology skills and disparities in access to digital technology. Meanwhile, for developed economies, this is the "key" to maintaining a leading position. Their goal is to continue to improve existing industries, create new high-tech industries and solve the problems of a developed society.

The Organization for Economic Cooperation and Development (OECD) has stressed that investment in digital technology and innovation capabilities is a key factor in helping economies maintain sustainable growth. Meanwhile, the World Bank (WB) has also recommended that developing countries should take advantage of digital transformation to expand access to services, finance and education, thereby creating new added value.

Looking Internationally

Realizing this huge potential, many countries have developed specific action plans. Singapore is a typical example with the ambition to become a "Smart Nation". They invest heavily in network infrastructure, encourage the use of data and bring technology into every corner of life. The Singaporean government creates very good conditions for technology startups to develop through financial support policies and business incubators. Thanks to that, Singapore has become the leading technology center in Southeast Asia, attracting a series of international technology corporations.

In the US, innovation is fueled by massive investments in research and development (R&D), both from the government and private corporations. A system of prestigious universities closely linked to businesses, along with abundant venture capital, has created fertile ground for the world's leading technology companies to emerge and grow. The CHIPS and Science Act, passed by the Biden administration in 2022, with a total funding of more than $280 billion, is a prime example. In addition, the private sector in the US - including large technology corporations such as Google, Meta, Amazon, Microsoft - also plays a central role in creating a strong innovation ecosystem.

However, the Visual Capitalist report points out that in 2023, the US R&D investment level (3.4% of GDP) still needs to increase to compete with countries like South Korea (5% of GDP). South Korea is a model for integrating AI and IoT into high-tech zones like Pangyo Techno Park. The South Korean government is investing heavily in a national AI strategy, with the goal of infiltrating AI into every field from manufacturing, healthcare to transportation.

Meanwhile, the EU considers digital transformation an important pillar for building a green economy and strategic autonomy. The "Digital Europe" program and the EU NextGeneration Recovery Fund have allocated tens of billions of euros to invest in digital infrastructure, data, cybersecurity and digital skills for workers. The EU's goal is that by 2030, 75% of businesses will use cloud computing and big data, and 80% of adults will have basic digital skills.

Even in emerging economies, impressive innovations are emerging. Brazil’s Porto Digital Technology Hub is a case in point. It has transformed an old city into one of Brazil’s largest technology parks, attracting many IT and innovation companies thanks to effective public-private partnerships and attractive policies to attract talent. The Brazilian government is pushing to replicate this model to bring technology closer to traditional sectors such as agriculture, education and construction.

No longer a trend

Innovation and digital transformation are no longer trends but the most important growth drivers of the 21st century. The success of leading countries shows that a clear strategy, persistent investment in technology and people, and building an environment conducive to innovation are decisive factors.

Technology and innovation are becoming strategic foundations for countries to improve productivity, develop sustainably and strengthen their competitive position. However, in many countries, legal institutions have not kept up with the pace of technological development, causing difficulties for startups. Moreover, large digital platforms such as Facebook and TikTok dominate the market, making it difficult for local businesses to compete. Therefore, countries need to build long-term strategies, reform institutions and cooperate internationally, thereby turning challenges into opportunities to rise in the global economy.

For Vietnam and other developing countries, learning from international experience and building strategies suitable to specific conditions is a key issue to not miss the "train" of the Industrial Revolution 4.0, towards a fast, sustainable and inclusive economic development.

According to VNA

Source: https://doanhnghiepvn.vn/cong-nghe/cuoc-dua-de-but-pha-trong-ky-nguyen-so/20250501083523498