In the heart of Vietnam’s agricultural sector, a digital revolution is underway, and new research is shedding light on its complex impacts. A study published in *Sustainable Futures* and led by Do Thi Trang of the National Economics University, Vietnam, reveals that the relationship between information and communication technology (ICT) and agricultural exports is far from straightforward. The findings, based on data from 63 Vietnamese provinces over a decade, suggest that while digitalization can boost agricultural exports, there’s a tipping point beyond which the benefits may diminish.
The research employed advanced econometric models, including the Panel Vector Autoregressive (PVAR) approach and a dynamic panel threshold model, to uncover these nuances. “We found that agricultural exports have consistently had a positive impact on ICT over time,” Trang explains. “However, the effect of ICT on agricultural exports is more nuanced. Below a certain threshold, ICT enhances agricultural exports, but above this threshold, the effect turns negative.”
This threshold, the study reveals, is an ICT level of 0.54. This means that provinces with lower levels of digital transformation—many of which are focused on agriculture, forestry, and fisheries—can benefit significantly from increased ICT investment. However, provinces with higher ICT levels, which tend to prioritize industrial and service sectors, see a diminished direct impact of ICT on agriculture.
The commercial implications of these findings are substantial. For Vietnam’s agricultural sector, which is a significant contributor to the country’s economy, the research underscores the importance of targeted digitalization strategies. “Governments must prioritize investments in digitization and create rules that balance interests and increase local output and export capacity,” Trang advises.
The study also highlights the need for policymakers to consider the unique needs and contexts of different regions. Provinces with lower ICT levels may benefit from investments in digital infrastructure, while those above the threshold might need to focus on integrating ICT into broader economic strategies that encompass multiple sectors.
As Vietnam continues to navigate its digital transformation, this research provides a crucial roadmap for maximizing the benefits of ICT in the agricultural sector. It also offers valuable insights for other countries grappling with similar challenges, emphasizing the need for tailored, context-specific approaches to digitalization.
In an era where technology is reshaping industries at an unprecedented pace, this study serves as a reminder that the path to digital success is not always linear. By understanding and navigating the complexities of digital transformation, the agricultural sector can harness the power of ICT to drive growth and sustainability.