Measuring the digital economy in Vietnam

Abstract

This study uses the concept of digital spillover and a panel model to measure the GDP contribution of Vietnam's core digital economy and digitalized economy. The proposed model is suitable for the case of countries, especially developing countries, with limited data. The calculations and analysis give three main results. Firstly, the scale of Vietnam's core economy has increased rapidly over the past 14 years. In 2007, the share of the core economy in GDP was only 1.45%. In 2019, this number increased to 7.08%. Second, the scale of Vietnam's digitalized economy grew significantly from 2007 to 2019. In 2007–2011, the digitalized economy accounted for 4.90% of GDP. This number increased to 11.56% for the period 2016–2019. Third, the growth of the digitalized economy is mainly based on the growth of the core digital economy. Therefore, the digital spillover effect in Vietnam's digitalized economy during the 13 years has only slightly changed. This study implies that Vietnam needs policies to develop the core digital economy and especially promote digital transformation to achieve the national digitalized economy goal of 20% of GDP by 2025 and 30% by 2030, respectively.