Private economy faces challenges of green transformation and digital transformation

General Secretary To Lam works with the Central Policy and Strategy Committee on a number of strategic solutions to create a breakthrough in developing the private economy in Vietnam in the coming time. Photo: Phuong Hoa/VNA

Faced with rapid technological development, environmental pressure, international integration requirements and fierce competition, Vietnamese private enterprises are forced to change - not only to survive but also to develop sustainably. This is not only an intrinsic requirement of enterprises but also a requirement from the highest level of policy, especially the recent directive of General Secretary To Lam: "The private economy needs to develop strongly but with direction, with responsibility to society, the environment and the future of the country".

Green transition: No longer an option, but a must

In the context of increasingly serious climate change, the international community is increasing pressure on reducing emissions, using renewable energy and clean production. Vietnam - a country committed to achieving net zero emissions by 2050 - is gradually institutionalizing this goal. And private enterprises are one of the central actors in implementing this.

However, according to a report from the Vietnam Chamber of Commerce and Industry (VCCI), more than 70% of small and medium-sized enterprises are not ready for green transformation. The main reasons are lack of capital, lack of technology and lack of understanding of international environmental standards. Meanwhile, the cost of investing in renewable energy, circular processes or “green” certificates is very high.

Mr. Le Bien, Phu Tan village, Phu Rieng commune, Phu Rieng district grows melons using advanced Israeli technology, giving better yield and fruit quality than conventional farming - Photo: Ngan Ha

A paradox exists: if they do not go green, businesses will gradually be eliminated from major export markets such as the EU, the US, and Japan; but if they do, they face serious financial risks.

Solving this paradox requires the participation of the entire ecosystem: policies to support green loan interest rates; tax exemptions and reductions for businesses applying environmentally friendly technologies; building a domestic carbon credit assessment system; and strengthening links between businesses and international organizations to access climate finance.

In particular, green transformation should not only be understood as a technological problem - but also a long-term business strategy, linking development with environmental responsibility and corporate ethics.

Digital Transformation: Opportunity to Restructure and Go Global

If green transformation is an ethical and responsible requirement, digital transformation is the key to improving productivity, efficiency, and competitiveness - vital factors for the private economy in the new era.

Digital transformation is not just about software application, but also about comprehensive restructuring of business models towards dataization, smart connection and process automation. Enterprises may not need to hire more staff but still increase revenue; can expand global markets without having to open offices in each country.

However, a worrying reality is that the majority of Vietnamese private enterprises - especially the micro, small and medium sized groups - are staying out of the digital game. According to a survey by the Ministry of Finance, only about 20% of Vietnamese enterprises have carried out basic digital transformation, mainly using email applications, social networks or accounting software.

Meanwhile, pioneering digital transformation businesses such as Mobile World, VinFast, FPT, Fast Delivery... have shown clear effectiveness: optimizing costs, capturing customer behavior in real time, and flexible management during crises (such as the Covid-19 pandemic).

The State's leading role and policy orientation

General Secretary To Lam emphasized: “Private economic development needs to be linked to the national development strategy. Enterprises cannot go alone in the transformation jungle”. This poses new requirements for the role of the “creating State” - in which the State does not do it for them, but accompanies, guides and supports the system. Specifically: It is necessary to legalize the concepts of “green transformation” and “digital transformation” in legal documents related to enterprises; perfect the system of measuring and evaluating enterprises according to ESG criteria (environment - society - governance); create conditions for the formation of venture capital funds, green funds, and digital banks specializing in supporting innovative enterprises. In particular, business associations and professional organizations need to promote their intermediary role in connecting knowledge, technology and supporting enterprises in implementing transformation strategies.

Private enterprises need to proactively reposition their roles.

Transformation does not come from the outside, but must start from the internal strength of the enterprise. It is time for Vietnamese private enterprises to review their long-term development strategy: enterprises exist to make profits, but profits must go hand in hand with responsibility and adaptation. Boldly invest in knowledge: do not transform green/digital based on "short-term interest", but need a specialized department and a methodical plan. At the same time, it is necessary to build a culture of innovation, accept trial - error - learning. Vietnam's private economy is entering a decisive stage. Either they adapt, regenerate and lead or are left behind. That is not only the choice of each enterprise but also the fate of the entire economy if there is a lack of timely companionship, direction and support from the State.

Green transformation and digital transformation are two doors opening the future for Vietnam's private economy - but they are also two "mountains" that need to be overcome with courage, knowledge and policy support. In the new development flow, as General Secretary To Lam emphasized: "The private economy cannot stand outside the national development revolution. They must be the force that creates, contributes and develops together". That is the call, the strategic direction and also the great expectation of the country for the private sector in the journey of sustainable development and deep integration.

Source: https://baobinhphuoc.com.vn/news/4/172640/economic-private-return-to-challenge-green-return-to-digital-return