Page 197 - Ebook HTKH 2024

components of digital transformation. Addressing these infrastructure gaps will be
crucial for ensuring the widespread adoption of digital technologies across all sectors in

Vietnam.
Workforce skills gap
The shortage of skilled labor is another significant barrier to digital transformation
in Vietnam. Many Vietnamese enterprises lack the technical expertise needed to
implement and manage digital technologies effectively. A study by Pham (2020)
revealed that only a small percentage of the workforce possesses the necessary skills in
fields such as AI, data analytics, and software development. The limited availability of
skilled workers means that businesses often struggle to recruit and retain talent capable

of driving digital initiatives. This skills gap is particularly pronounced in SMEs, which
account for the majority of businesses in Vietnam. Without the right human capital,
enterprises face difficulties in executing and sustaining their digital transformation
strategies (Nguyen et al., 2021).
Financial constraints
Digital transformation often requires significant upfront investment in technology,

infrastructure, and training. While large corporations may have the financial resources
to invest in advanced digital technologies, SMEs, which make up over 98% of all
enterprises in Vietnam, often lack the capital to support digital initiatives (Doan &
Vuong, 2019). As a result, many businesses are hesitant to embark on digital
transformation due to concerns over costs and the long-term return on investment (ROI).
Additionally, SMEs face difficulties accessing credit and financing for digital
transformation projects. The lack of financial support can delay or limit their ability to

adopt digital technologies, leaving them at a competitive disadvantage compared to
larger firms (Nguyen et al., 2021).
3.1.3. Digital transformation and sustainability
Digital transformation is not only about improving business efficiency and
competitiveness but also about enabling enterprises to operate more sustainably. The
intersection of digital transformation and sustainability, often referred to as "digital

sustainability," has been identified as a critical area for businesses looking to reduce
their environmental impact while enhancing operational efficiency (Rudolph & Figge,
2017).
Digital technologies can help businesses achieve their sustainability goals by
optimizing resource use, reducing energy consumption, and minimizing waste. For
example, AI and IoT technologies can be used to monitor energy usage in real time,
allowing businesses to identify areas where energy consumption can be reduced
(International Energy Agency, 2020). Furthermore, cloud computing and data analytics

enable businesses to track and measure their environmental performance, leading to
more informed decision-making and greater accountability.
In Vietnam, digital technologies are increasingly being used to support green
initiatives in industries such as manufacturing and agriculture. For instance, IoT-
enabled sensors are helping agricultural enterprises monitor soil quality, water

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