Chairman’s Insights – May 27th 2019
New Opportunities for UK Business
On Friday the British Ambassador HE Gareth Ward addressed members of the British Business Group Vietnam on the UK’s new industrial strategy and opportunities in line with the Vietnamese Governments Industry 4.0 Strategy. I quote below
“As to current trends. UK exports were up 9% last year, underpinned by strong Vietnamese economic performance, which is driving the growth of the middle class. People flows are accelerating with a record 310 thousand Brits visiting Vietnam in 2018, and a record number of nearly 20 thousand visas issued to Vietnamese last year. So far in 2019, visa demand is up around 25%. Just recently we had the biggest ever Government delegation of Vietnamese visit the UK – 90 leaders from Universities and Schools, led by the Education Minister. With Vietnam due to host ASEAN and join the UN Security Council next year, not to mention host Formula 1, there will be much more profile for Vietnam in the UK, which I hope will drive UK business interest.
Of course there is lot of political energy and media focus on Brexit, and here in Vietnam, my team is working to ensure a smooth transition and continuity for business in our trading and political relationship under all scenarios. We are making good progress with the Vietnamese Government on that. But today I would like to raise eyes to the 10 year horizon, and focus on the big issues which will shape our relationship.
With 1% of the world’s population, the UK produces 15% of the most frequently cited research papers globally. And half of those papers are co-authorised internationally. I arrived in Ho Chi Minh City this morning from the Mekong Delta, where I joined a research team from Hull University who were working with Can Tho University to analyse patterns of sediment shifting, to predict flood risk from climate change. The Mekong is the world’s 2nd most biodiverse delta, after the Amazon. 40% of the delta could be flooded by rising sea water by 2050. The UK will push to raise R&D to 2.4% of GDP to keep us as an innovation and research superpower, and an attractive partner for rising Asian countries.
Our Industrial Strategy highlights 4 grand challenges. The first is Artificial Intelligence and the Data driven economy. The UK attracted more than $1.3bn of investment into AI in 2018, as much as the rest of the EU put together. We are in a position to compete in the top league, with China and the US, for innovation in this sector. And we can bring this to South East Asia, as for instance Prudential is doing with Babylon’s AI health check application, which could reduce the burden on public health systems here, as it is in the UK.
The second is clean growth. Last month the UK had the first week without coal power since the industrial revolution. We have pushed coal down from 40% of our energy in the last decade to near zero by innovating in offshore wind. We are a world leader in the technology, the regulation and the financing – the price of wind power been cut in half over the last few years. We can help bring that to Vietnam, as we are doing already in Taiwan.
The third is an ageing society, where the disease burden and the social care implications have already changed significantly in the UK. Vietnam currently has a young population, but it will age quickly within the next 2 decades. I have visited 8 Vietnamese hospitals, public and private, during my year in Vietnam so far. There is a gap between demand and delivery, but there is also good potential for innovation. I saw AstraZeneca conducting cancer drug trials in one hospital – of great importance for the shifting disease burden here.
Finally we believe that future mobility, with self-driving electric vehicles and smart infrastructure, will improve safety, air quality, and efficiency. The Faraday Institution is the UK’s independent institute for battery technology, with a 4 year programme to put the UK at the forefront of research and industrialisation for electric power.
Vietnam also has significant potential in Industry 4.0. – it has the highest ratio of digital economy to GDP in SE Asia and has one of the fastest growing e-commerce sectors. The Government has a set a target of 1 million IT related workers by 2020, and they are currently on track for 600 thousand, meaning a big opportunity in education and skills for the UK. I have seen leading companies like FPT competing successfully for global business, for instance doing data driven work for Airbus on plane efficiency.
We are engaging with the Vietnamese government through our Prosperity Fund programmes on digital health, smart cities, green finance, and clean energy. For instance, the UK Building Information Modelling approach has been adopted by the Ministry of Construction, which should give our consultants a competitive advantage in this field in the future.
I have aimed to set out a picture of how UK and Vietnamese policies on innovation and digital are compatible, and how the UK’s industrial strategy should put us in a position to partner with Vietnam as it pursues industry 4.0. I am conscious that you will be at the sharp end of this process, and our role will be to provide you with advice and support to put British business in a place to succeed in Vietnam”.
I believe all attendees found this speech highly informative (as I did) with a positive steer to the opportunities aligned to the UK’s new development strategy and the opportunities aligned to Vietnam’s Industry 4.0 strategy.
Kenneth M Atkinson