Introduction
Vietnam is undergoing rapid urbanization, with 36.8% of its population currently residing in 800 urban regions. This figure is projected to surge to 50% by 2040. To proactively manage this growth, the Vietnamese government has been actively planning and developing a series of smart cities since 2018. A sustainable smart city in Vietnam is an urban area that uses advanced technologies and innovative approaches to achieve economic growth, environmental sustainability, and social progress while ensuring citizen well-being. This burgeoning Vietnam smart city industry is rapidly moving from concept to concrete, large-scale projects.
The Urban Challenge: Drivers for Smart Transformation
The push for smart solutions in Vietnam is driven by necessity. Rapid urbanization has placed significant strain on existing infrastructure and resources. This is starkly illustrated by the “Urban Green Spaces” metric. Major hubs like Ho Chi Minh City (with only 2.0 m2/capita ) and Hanoi (11.2 m2/capita ) currently lag significantly behind regional counterparts like Singapore (66.2 m2/capita ) and Hong Kong (105.3 m2/capita ).
To address these difficulties, the Vietnamese government passed Resolution 6, targeting the challenges of rapid urbanization and creating a clear market for smart capabilities. The smart industry in Vietnam is seen as central to solving these pressing urban challenges.
National Strategy and the ASEAN Context
Vietnam’s government has introduced several key documents to foster smart city development. Foundational policies include Decision No. 950/QD-TTG, which approved the sustainable smart city project for 2018-2025, and Decision No. 749/QD-TTG, which acts as a guideline for provinces to create their own roadmaps.
The national framework, which aligns with the broader goals of the ASEAN Smart Cities Network Vietnam, focuses on several key features:
- Smart urban planning. Using digital technologies to optimize land use and improve public transportation.
- Smart transport. Optimizing traffic flow and reducing congestion.
- Smart energy. Promoting the use of renewable energy sources and optimizing use.
- Digital government. Increasing efficiency, transparency, and accountability.
- Sustainable development. Reducing environmental impact and promoting green growth.
Pioneering Cities: The “Big 4” in Focus
Four cities are at the forefront of this transformation: Ho Chi Minh City, Hanoi, Da Nang, and Can Tho.
- Da Nang: Named one of the world’s first 33 smart cities by IBM in 2012, Da Nang has implemented smart traffic, lighting, and water management systems.
- Hanoi & Can Tho: Both cities have implemented smart systems for traffic management, lighting, and waste management.
- Ho Chi Minh City: HCMC is pursuing development at multiple levels. It includes a city-level Smart Urban Operation Center and large-scale, district-level projects. These include the 64-hectare Saigon Sport City (Keppel Land) and the Thu Thiem Lotte Eco Smart City. Also, these large-scale developments are prime examples of industrial smart cities in the making.
Vietnam Industry 4.0 and Foreign Investment
The smart city industry is a major draw for foreign direct investment (FDI). Vietnam currently hosts 34,989 foreign investment projects spread across 48 cities. An industry 4.0 smart city relies on the integration of advanced technologies, and international investors are playing a key role:
- Bosch (Germany): Invested $450,000 in a new center to study solutions for smart cities and Industry 4.0 in Vietnam.
- Lotte Group (South Korea): Set to invest $900 million to establish a smart city.
- Microsoft (USA) & Siemens (Germany): Participating as technology partners and consultants for smart traffic, platform deployment, and other smart software infrastructure.
- ABB (Switzerland): Signed a Memorandum of Understanding (MoU) with HCMC in October 2022 to support smart city initiatives.
- Daewoo E&C (South Korea): Teaming up with other Korean companies to develop a smart city system to manage future urban growth.
Alongside FDI, domestic giants like Vingroup are key players, developing projects such as the 280-hectare Vinhomes Smart City based on an “All-in-one” model.
Save Free Copy Smart City Industry Report
The overview serves as a brief smart city industry report, highlighting clear opportunities for foreign businesses in Vietnam. Key areas include:
- Developing smart infrastructure. Investing in traffic management systems, smart lighting systems, and smart waste management systems.
- Investing in Key Economic Zones (KEZs). Funding and constructing technical, social, and environmental projects within KEZs.
- Developing e-government. Building public administrative centers and online public services to facilitate smart city development.
- Providing smart services. Focusing on high-demand sectors like smart education and smart healthcare.
Look Ahead: The Future of Smart Industry Vietnam
Vietnam’s smart city journey is ambitious and integrated with a national target for ‘net zero’ carbon emissions by 2050. The future smart industrial city is being designed to be environmentally friendly, with high-tech applications in energy, health, and education.
As the smart industry in Vietnam evolves, the focus remains on leveraging technology to create modern, civilized, and convenient 4.0 living standards. The sector presents vast opportunities, but long-term success will depend on balancing advanced technological deployment with human-centric planning and strong community engagement
Source of Asia (SOA) provides expert support for businesses looking to enter or expand in Vietnam’s dynamic smart city market. Our services include:
- Market Expansion
- Sourcing & Supply Chain
- Corporate Services
- M&A Services, etc.
Contact us to learn how we can support your smart city initiatives in Vietnam.
