Digital Transformation in Manufacturing Sector: Empirical Insights from an Emerging Economy

Digital transformation stands as a significant business revolution, heralding a new economic paradigm that reshapes industry structures, stakeholder interactions and competitive dynamics. Given the volatility, uncertainty, complexity and ambiguity (VUCA) in business environments, digital transformation offers extensive industry-spanning opportunities driven by technological shifts and global competition. However, numerous firms still encounter challenges in effectively achieving digital transformation into their business operations at scale. This thesis aims to empirically investigate the interplay among crucial building blocks and their associated factors to successfully achieve digital transformation, specifically in Vietnam’s manufacturing industry. Employing a qualitative multiple case study approach, it draws on 27 semi-structured interviews with senior managers in Vietnam’s manufacturing sector—an emerging economy context—to uncover insights into the digital transformation process.

The findings identify seven essential building blocks for digital transformation in manufacturing firms, each influenced by factors that drive success or pose challenges. Firstly, the availability of advanced data serves as a primary motivation, enabling firms to make precise, data-informed decisions that enhance efficiency and competitiveness. Secondly, tactical technologies such as cloud ERP and artificial intelligence facilitate data integration and predictive insights while supporting scalable collaboration and ecosystem expansion. Thirdly, coherent value networks are crucial for strategic responses, ensuring cross-functional collaboration and consistent value delivery. Fourth, organisational structure and leadership are fundamental in redefining value creation paths, with effective leadership and a supportive culture fostering innovation and transformation commitment. Fifth, top management support is a key enabler, involving resource allocation and the driving of strategic initiatives. Sixth, barriers such as insufficient talent, inadequate training and resistance to change hinder digital transformation by disrupting process integration and data sharing. Finally, production improvements lead to higher quality and faster cycles, thereby boosting overall competitiveness.

This thesis advances digital transformation literature in the manufacturing sector by examining seven building blocks: digital technologies, motivations, strategic responses, value creation changes, enablers, barriers and business performance. It introduces an integrated framework that deepens the theoretical understanding of digital transformation, especially in emerging economies such as Vietnam. By addressing unique challenges and opportunities, the study expands existing literature that often overlooks contextual factors influencing digital initiatives. Practically, the thesis enhances managers’ comprehension of critical factors for successful digital transformation, including advanced data availability, top management support, cloud ERP and artificial intelligence. This insight enables effective resource allocation and addresses challenges such as resistance to change, talent shortages, inadequate training and lack of standardisation, fostering a culture of innovation and competitive advantage. Likewise, the findings offer valuable recommendations for policymakers facilitating digital transformation in Vietnam’s manufacturing industry. Emphasising supportive policies, the thesis outlines strategies to incentivise digital adoption. It aligns with the United Nations Sustainable Development Goals (SDGs), particularly SDG-8 (Decent Work and Economic Growth) and SDG-9 (Industry, Innovation and Infrastructure). Supportive policies can enhance productivity and efficiency, create job opportunities, improve working conditions and equip the workforce with future skills. Furthermore, investment in digital infrastructure—such as cloud computing, high-speed internet and technology hubs—is paramount for fostering a competitive and innovative manufacturing sector capable of thriving in a VUCA market.