HCMC – Sustainable smart cities can be a solution to sustain international business investments for Vietnam in the digital era, experts suggested at the recent Smart and Sustainable Cities Forum held by RMIT University.
Vietnam has been an attractive destination for international businesses for the last 30 years thanks to its rapid economic reforms, rich resources and large population. According to the World Bank data, Vietnam is among the fastest-growing economies globally, with an average gross domestic product growth rate of 6.31% from 2000 to 2020.
According to Dr Erhan Atay, RMIT University Senior Program Manager for International Business and Master of International Business, Vietnam finds itself in a new era of globalization that requires a different approach to sustain its attractiveness for international businesses.
He explained that while earlier forms of globalization were mainly about the trade of labor-intensive, tangible manufactured items across borders, new globalization is about providing integrated and intangible digital services to companies and individuals. This can be called “digital globalization”.
The expert pointed out the relationship between new digital business models and international trade. “New business models rely on information technology-based applications and instant information sharing. The information flows help organizations and individuals establish new local, regional, national and international connections in trade, finance and society. All such links may help trade actors to expand their trade volume.”
Dr Atay remarked that the competition between countries and cities is increasing day by day. Each region has to “up its game” to attract investors, especially as global organizations are now more selective.
“International investors will consider new factors when choosing where to invest. These include how digitalized the destination is, how sustainable the economy is and how social the environment is. These factors will outweigh traditional investment decisions such as cheap labor, rich resources and a large population.
“In the new era, sustainable smart cities that enable the transfer of data, technology, ideas and best practices, while providing a liveable and sustainable environment, may affect the investment decisions of international business actors,” Dr Atay suggested.
Addressing the Smart and Sustainable Cities Forum, leaders from multinational companies echoed this view.
Tuyen Bui, Technical Director and Senior Advisor of international engineering advisory company Aurecon Vietnam, said, “Sustainable smart city initiatives, which aim to establish a healthy balance between economic, social, and environmental factors, will be an important criterion for new foreign direct investment.”
“Robust digital infrastructure is particularly important for smart cities to function. That means a focus on solutions such as wireless networks, smart water and energy management, wastewater recycling, an intelligent transport system and automated parking management, among others,” Tuyen said.
He underscored that while doing so, “Vietnamese cities should follow international standards and frameworks for smart city development.”
Cluster President of Schneider Electric Vietnam and Cambodia Dong Mai Lam highlighted that sustainable smart cities would have to be more digital and more electric.
According to Lam, the technology we need to implement three times faster needs to be directed in three simple directions: electrification – because this is the only way to decarbonize; decarbonization of electricity production; and efficiency.
“These three action areas have the potential to reduce emissions in line with what we need to do to transition our energy system and be back to the 1.5-degree trajectory of global temperature rise,” he said.
“Both corporate and individual customers have become more aware of the dimensions of sustainability which have to become carbon neutral and trend to net-zero. And so, we must bring disruptive technologies to make products and systems more sustainable and green premium.”
Dr Erhan Atay from RMIT University observed that HCMC, Hanoi, Danang, Nha Trang and Binh Duong are carrying out administrative reforms to initiate and accelerate smart city projects to attract more foreign investors.
“Vietnam should accelerate its sustainable smart city investments to maintain its high growth rates in the last 30 years, be a center of attraction for foreign investors, and, above all, offer a high quality of life to its residents,” Dr Atay concluded.