Vietnam’s grand illusions about industry 4.0

By Dinh Hong Ky   October 22, 2018 | 05:57 pm PT
The fourth industrial revolution is just a notion, not a magic wand, and businesses need to keep running constantly to survive.
Dinh Hong Ky, vice chairman of Saigon Association of Construction and Building Materials.

Dinh Hong Ky, vice chairman of Saigon Association of Construction and Building Materials.

I recently visited a company in Bologna city in Italy and was impressed with what I saw: They have created an app for designing and manufacturing building materials using artificial intelligence and big data.

Users can find information about building materials from brands around the world and use it to create their own interior design. Thus, for the first time, a lay person can do the job of a professional interior designer, thanks to this app.

I admired their work and so asked them how they came up with such a product. They told me they built and updated it over several years as information technology progressed rapidly.

And so I eagerly began to discuss industry 4.0, big data, artificial intelligence, Internet of Things, cloud computing and digitization, only to find out to my surprise that they know nothing about those trends. They just did what they have always done and kept learning from the new things.

Thanks to running an export business, I have the chance to meet with business people from various countries. What has astonished me is that every time we used the term “fourth industrial revolution,” companies from the U.S., Britain, France, and Italy did not understand what we meant.

When I explained to them about the “opportunities and challenges,” they said they did not pay too much attention to the revolution, and that information technology has been changing nonstop over the past 20 years and they just keep up with the latest trends as much as they can.

But in Vietnam, I hear the term “industry 4.0” almost every day. For more than a year now from the central government to local governments and businesses, people have constantly been talking about the fourth industrial revolution.

Before a flight I read the news and saw the jury asking a contestant at a beauty pageant a question about industry 4.0. When I landed I received an email from the Party unit of HCMC’s Binh Thanh District inviting businesses to a conference titled “Industry 4.0: opportunities and challenges.”

It seems like every section of Vietnamese society has jumped on the bandwagon, eager to embrace industry 4.0, assuming that the revolution has broken out around the world.

But I think what we actually need now is concrete action.

A worker holds a metal frame at an assembly plant that produces smartphone in Hanoi, Vietnam, July 5, 2017. Photo by Reuters/Kham

A worker holds a metal frame at an assembly plant that produces smartphone in Hanoi, Vietnam, July 5, 2017. Photo by Reuters/Kham

For instance, a simple task would be to create a better business environment and provide practical support to companies and startups so that they can persist instead of giving up halfway.

Many Vietnamese startups have chosen Singapore as their base instead of their home nation. Singapore has created a friendly business environment with rational tax policies and administrative procedures.

The Monetary Authority of Singapore (MAS) in 2015 launched a $225-million initiative to help financial firms set up innovation labs and to fund infrastructure to deliver financial technology (fintech) services.

And it is not just Singapore: other Southeast Asian countries too have specific policies designed to help their businesses make good use of new technologies.

But in Vietnam, it is very difficult to see such action from the government.

On the other hand, the apparent obsession with industry 4.0 has made many people look at it like some kind of panacea. At a Microsoft forum recently, I saw a company promise to undergo a digital transformation and claim its motto was “change or die.”

I also run a company and I think digitization is good but it does not mean digitization automatically guarantees success for a company.

The first and foremost mission of a company is to cope with the fierce competition in the market and make profits to remain a going concern.

A firm looking to digitize should already be professional with capable staff and known in the market for making good and competitive products.

Of hundreds of thousands of Vietnamese firms that are struggling to survive now, how many can survive and grow? Excessive propaganda and hasty conclusions about the “industrial revolution” will probably cause confusion and instability in the business community.

There will be small firms with limited resources, but a “change or die” mindset means they would not hesitate to spend large sums on the race to equip themselves with new technologies, which is not always necessary.

We should not hype any revolution because our life neither stays the same forever nor turns upside down in the blink of an eye.

If mobile phones were a luxury for Vietnamese just a few years ago, it is a common sight now to see street vendors using smartphones, and nobody touted an industrial revolution when this change occurred.

In recent times there have been many conferences and seminars on e-governance and smart cities. I cannot tell if the industrial revolution has indeed taken place, but what I know for sure is that Tesla’s self-driving car can never travel on the jammed and flooded streets of HCMC, and computer engineers will always be afraid to work in Vietnam for fear of unsafe food.

There is no 4.0 revolution in education to ensure children in mountainous and remote areas do not drop out of school or have to swim past streams, climb up cliffs and wade through mud to reach school, or in healthcare to ensure each patient has their own bed and do not have to share it with others.

Improving the quality of life for everyone each and every day should be the primary goal of the authorities. When you can specify the development goal then 4.0 or 5.0 is simply a name.

*Dinh Hong Ky is a business person and vice chairman of the Saigon Association of Construction and Building Materials. Opinions expressed here are his own.

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