Vietnamese companies flag significant Industry 4.0 investments

31 October 2018 4 min. read

PwC has taken the pulse of the Vietnamese workforce to gauge perceptions on the coming impact of Industry 4.0 technologies, finding that while companies were set to make significant investments there remained much uncertainty overall.

Conducted in collaboration with the Vietnam Chamber of Commerce and Industry and the Vietnam Business Council for Sustainable Development, a PwC survey of Vietnamese managers in industries set to be most heavily impacted by the rapidly emerging technologies of Industry 4.0 (such as artificial intelligence, the Internet of Things and robotic automation in the manufacturing sector) has revealed much ongoing uncertainty as to the coming implications.

Overall, just 27 percent of respondents stated a belief that they fully understood the concepts and impacts of Industry 4.0 (which, it should be noted, is still being highly debated among global thought leaders…), while 30 percent said they had heard of but were unclear on the concept, a similar number said they understood it but were unsure of the impacts, and 14 percent admitted to only a limited understanding.Industry 4.0 challenges in Vietnam compared to global peersDespite the general uncertainty, some 65 percent of respondents held positive perceptions of what Industry 4.0 would deliver for their organisations and personal role and career, while 31 percent were still undecided and just 4 percent stated a negative perception. The greatest expected benefits for organisations included the improved speed of product delivery and completion, improved access to customers, and improvements in product quality.

And the revolution is already underway. Nearly a quarter of respondents stated that they were already experiencing the effects of Industry 4.0, with another 43 percent expecting to be significantly impacted within the coming three years. Over a third each of the respondents expected the largest impacts to be felt in terms of the digitisation of horizontal and vertical business value chains, and in respect to the changing nature of digital business models and customer access.

In line with the prevailing positivity, and despite the uncertainties, the organisations of Vietnam are especially keen to invest in Industry 4.0 technology compared to their international colleagues, at rates of two to three times higher than the global median. Overall, investments in digitisation were estimated to be around 9 percent of annual revenues for Vietnamese companies, expected to rise to around 22 percent within the next five years. A previous survey by PwC in 26 leading economies pegged the global investment estimate at closer to 5 percent.Employee levels of understanding of Industry 4.0 in VietnamStill, there remain local concerns surrounding the lack of digital standards, data privacy and security, and insufficient skills in local talent, particularly as to a limited understanding of the specific skills, knowledge, and capabilities required to for digital integration. As a contrast, the top three concerns internationally were the lack of clear digital operations vision and support from top management, unclear economic benefits, and the high financial investment requirement.

All in all, the survey data suggests that while certain elements of the impact of Industry 4.0 are yet understood, organisations in Vietnam are ready to back emerging technologies, a finding which accords with general regional attitudes, such as was highlighted in a previous Strategy& study which showed that Asia Pacific leads the globe for digital transformations, and an earlier PwC survey which shows the attitude is reflected on the consumer side – with citizens in Vietnam and China currently the world’s biggest adopters of home artificial intelligence devices.

Grant Dennis, a senior partner in PwC’s Southeast Asia consulting practice and country lead for Vietnam, concluded on current digital landscape in Vietnam; “To move forward with Industry 4.0, acquiring and rolling out digital capabilities and infrastructure across the nation are all-important. Based on our experience, we have defined a number of practical recommendations, from building awareness via industry bodies to incentivising network development and creating innovation hubs.”