This paper introduces a practical framework to quantify the digital economy and evaluates its growth in Vietnam, utilizing available Input-Output (I-O) tables from the OECD statistics database. Additionally, it conducts a direct comparison between Vietnam and Thailand, shedding light on their relative standings. The primary contribution of this paper lies in its devised approach for measuring the digital economy. This methodology generates meaningful estimations of the digital economy's size and drivers within a specific country. Moreover, these estimated results are suitable for cross-country comparisons. Concurrently, applying this approach to analyze Vietnam and comparing it with Thailand reveals valuable insights. Firstly, Vietnam's digital economy, amounting to US$17,458 and comprising 7.9% of GDP in 2018, exhibited consistent expansion during the 2012-2018 period. Secondly, the ICT sector, particularly foreign-invested ICT hardware manufacturing, contributes roughly 50% to Vietnam's digital economy, while contributions from backward linkages and digital transformation each account for 20-30%. Thirdly, the non-ICT sectors' contribution to the digital economy is quantifiable through three avenues: purchasing digital products and services, supplying the ICT sector, and generating value-added from within-sector digital transformation. Lastly, compared to Thailand, Vietnam lags in key digital economy metrics. Notably, the Thailand/Vietnam ratio for value-added in 2018 was 3.9 for the total digital economy, 3.2 for the ICT sector, 3.1 for contributions from backward linkages, and 6.4 for non-ICT sector digital transformation, while the ratio for GDP stood at 2.1. This insight underscores that while investing in digital infrastructure, promoting internet adoption, and attracting FDI to ICT hardware manufacturing are essential, they alone are insufficient for the rapid progress needed in advancing Vietnam's digital economy.
