In 2022, the Asia Trade and Innovation Hub (ATIH) released a series of three reports with the goal of enhancing the relationship between Victoria and Southeast Asia.
Strengthening Victoria’s Connections with Southeast Asia: Industry 4.0 in Vietnam - Opportunities for Australian Business – is the third and final report in a series from the Asia Trade and Innovation Hub (ATIH) aimed at providing a practical roadmap for business and government looking to strengthen their relationships and participation in Southeast Asia.
This report places a focus on the burgeoning tech sector, specifically edtech, agtech and logistics tech, which have been prioritised for digital transformation by the Government of Vietnam.
Overview
Australia and Vietnam are both adopting I4.0 technologies. Vietnam has further to go than Australia but is a fast-moving digital adopter, with recognised momentum in digital transformation but variable levels of readiness for I4.0. This report provides insights for Australian firms looking to explore business opportunities in Vietnam related to Industry 4.0 across the three key sectors of agriculture, logistics and higher education sectors.
Australia seeks a successful transition to a post COVID future in the Indo-Pacific region, through an effective bilateral and multilateral engagement with its Southeast Asian neighbours.
Australia and Vietnam aspire to build on 50 years of bilateral relations that span into multiple dimensional development and pathways for engagement. COVID has caused substantial loss of life and disrupted sources of livelihood for disadvantaged and marginalised communities. It also has created opportunities for businesses to accelerate digital transformation and the uptake of modern technologies.
As the world emerges from the pandemic, it has become clear that digital transformation will have an increasingly important role in the global economy.
This report adds to the growing body of research and dialogue on strengthening bilateral trade and cross-border investment between Australia and Vietnam. In this report, we largely focus on Industry 4.0 (I4.0) applications in Vietnamese education, agriculture, and logistics, consider Australian strengths and capabilities, map opportunities, and provide market insights for Australian firms.
These three sectors have been keystones in Australia and Vietnam’s relationship, underpinned by proven complementarities. The existing high-quality engagement between the two nations can now be leveraged to accelerate I4.0 engagement. Australia and Vietnam are both adopting I4.0 technologies. Vietnam has further to go than Australia but is a fast moving digital adopter, with recognised momentum in digital transformation but variable levels of readiness for I4.0.
“Vietnam is in a good but uneven position to become a digital powerhouse.”
In the past year, the Vietnamese Government has increased the national focus on digital transformation to catch the I4.0 wave in all its manifestations and enable longer-term productivity and growth. Digital transformation is now a central objective in the suite of national development strategies and directives.
This includes calls for high-tech investment by both foreign large and small investors. This and Australia’s relative lead implies that Australian companies may be well-placed to act on emerging opportunities for digital-I4.0 trade and investment.
Most Vietnamese enterprises are strongly aware of and relatively positive about I4.0. In practical terms, needs vary along a spectrum from digitisation through digital transformation to the adoption of I4.0 technologies. Readiness is highly variable. Cross-sector opportunities to build digital/I4.0 readiness, and for products and services to digitise and digitalise abound and will continue throughout this decade.
Outlook
Identifying channels and customers can be challenging and requires adaptation to the Vietnamese market but Australia has a lot to offer including industry-specific advice and training, with digital/I4.0 products, and services along the transformation spectrum in education, agriculture, and logistics. In each sector, current market opportunities reflect variable levels of readiness, and absorptive capacity. The sectoral overviews, case studies and analysis clarify the areas where Australian businesses could offer suitable I4.0 solutions and services.
In the education sector, an accelerating transition in Vietnamese universities to move to Education 4.0 provides opportunities for Australian universities, VET providers, and edtech. Opportunities are becoming clearer as needs are prioritised and readiness improves.
Agriculture is a key economic sector for Australia and Vietnam with a proud history of bilateral engagement. Vietnam agriculture faces many challenges to jump the divide between the status quo and Agriculture 4.0. There are many identifiable needs for suitable I4.0 technologies but commercial opportunities are still evolving.
Logistics is a sector which has attracted investment from leading Australian companies and has emerging opportunities for technology and services. A market for I4.0 solutions is emerging and is likely to expand quickly.
Critically, the time is now for the Australian industry to work with the government to prepare a strong Australia Inc. push around I4.0. towards Vietnam.
