The thirteenth Nationwide Congress of the Communist Social gathering held in 2021 set a objective of reworking Vietnam right into a developed, high-income nation by 2045, figuring out science, know-how and innovation as the first engines for this journey.
Nonetheless, for the nation to really “flip right into a dragon,” this technological drive can’t stand alone. It should be intrinsically linked to institutional reform, human useful resource growth and a sturdy industrial basis.
Policymakers should subsequently stay clear-headed and keep away from an overreliance—or “idolization”—of know-how, particularly when institutional frameworks and implementation capability stay underdeveloped.
Rising digital economic system
An evaluation of Vietnam’s technological functionality reveals a fancy image. In accordance with the World Mental Property Group (WIPO), the nation ranked forty fourth out of 133 international locations within the 2024 International Innovation Index and was praised for its promising growth potential.
Nonetheless, this high-level rating is tempered by low foundational funding; Vietnam’s spending on analysis and growth reached solely about 0.43% of GDP in 2021, considerably decrease than that of Asia’s main know-how economies. This displays a sample wherein the nation’s strengths lie in output indicators reminiscent of high-tech exports, whereas its weaknesses are concentrated in human capital and institutional high quality.
Regardless of these challenges, the digital sector has turn into a notable shiny spot. In 2024, the Ministry of Info and Communications reported that digital know-how enterprises generated roughly US$158 billion in income.
The nation had about 73,788 digital tech companies, with overseas market earnings estimated at $11.5 billion, whereas {hardware} and electronics exports alone accounted for roughly $133.2 billion. These figures present that “Vietnamese digital enterprises are progressively shifting from meeting and outsourcing to creation, self-design and mastery of core applied sciences.”
The macroeconomic momentum from this shift has additionally turn into clearer. In 2024, the digital economic system was estimated to account for 18.3% of GDP, rising at a mean annual price above 20%—the quickest in Southeast Asia. With Vietnam among the many ten fastest-growing e-commerce markets on the planet, the digital economic system is undeniably taking part in an more and more essential position in nationwide growth.
Regarding limitations
Alongside these constructive alerts, Vietnam’s know-how sector faces clear and critical limitations.
First, the nation nonetheless depends closely on meeting throughout the know-how worth chain. In accordance with the Normal Statistics Workplace, {the electrical} and digital sector exported about $126.5 billion in 2024. Nonetheless, home value-added stays skinny, as native enterprises management few phases involving design, requirements or mental property.
Second, the semiconductor {industry}—the spine of the digital economic system—stays nascent. Latest overseas direct funding from multinational companies reminiscent of Amkor Know-how, Hana Micron and Intel has spurred development in meeting, testing and packaging (ATP), however home capability stays restricted.
A 2024 report by the Semiconductor Business Affiliation and Boston Consulting Group projected that Vietnam may enhance its world share of ATP from about 1% in 2022 to 8-9% by 2032. Nonetheless, home functionality in high-value areas reminiscent of design and front-end fabrication stays embryonic, with the outlook relying closely on the execution of efficient know-how switch insurance policies.
Third, the bottleneck in high-quality human assets stays unresolved. The federal government has introduced a objective of coaching 50,000 semiconductor engineers by 2030, supported by a long-term growth program.
Nonetheless, translating these ambitions into sensible functionality would require internationally standardized analysis applications, hands-on coaching alternatives and open mechanisms to draw overseas specialists.
Regional classes
To capitalize on its latecomer benefit, Vietnam can draw essential classes from the centered methods and insurance policies of its regional neighbors.
South Korea presents a lesson within the scale of funding required. The nation maintained one of many highest R&D intensities within the OECD, spending 5% of its GDP in 2023. In April 2025, the South Korean authorities introduced plans to broaden semiconductor funding to 33 trillion gained (about $23.2 billion) and unveiled a plan to assemble a “mega semiconductor cluster” by 2047, supported by vital tax and infrastructure incentives.
Taiwan, in the meantime, supplies a mannequin for technological depth and dominance. The island’s R&D expenditure reached NT$937.3 billion ($30.63 billion) in 2023, with 78.1% pushed by its electronics and optoelectronics industries.
This decades-long technique—centered on core know-how and shut industry-academia collaboration—has enabled companies like TSMC to supply about 90% of the world’s most superior chips and to create a “silicon protect” by attracting overseas R&D facilities.
Singapore, in distinction, demonstrates the worth of constructing a symbiotic ecosystem. Moderately than investing in large factories, it targets assets to attach R&D with enterprise. R&D spending was 1.8% of GDP in 2022, guided by a S$25 billion plan centered on “selling know-how switch and strengthening companies’ innovation capability.”
Whereas Singapore spends lower than South Korea, its coverage consistency and self-discipline have turned it right into a world hub for tech startups, entrepreneurs and buyers.
What ought to Vietnam do?
From the experiences of East Asian economies, two essential areas of funding stand out for Vietnam.
The primary is the “depth” of information funding. With Vietnam spending solely about 0.43% of its GDP on R&D—a fraction of the 2.62% world common—anticipating breakthroughs in core know-how is unrealistic.
This problem is compounded by a considerable hole between analysis and software. A research by two lecturers at Hanoi Legislation College describes the nation’s R&D ecosystem as “fragmented,” with little collaboration amongst authorities regulators, non-public companies and analysis institutes, limiting the commercialization of innovation.
Second, regional coverage fashions supply clear classes. South Korea employs massive, secure assist packages; Taiwan focuses on core applied sciences; and Singapore prioritizes institutional connectivity.
Drawing from these examples, Vietnam ought to pursue a extra possible roadmap with particular, prioritized goals moderately than spreading assets too skinny. This requires motion throughout a number of interconnected fronts.
On establishments and provide chains, Vietnam must refine mechanisms for choosing national-level science and know-how missions and hyperlink public funding with company sponsorship. South Korea’s use of credit score incentives and streamlined procedures presents a mannequin for exciting employment and attracting expertise.
On the identical time, the nation ought to establish sectors of relative benefit—reminiscent of meeting, testing and packaging (ATP)—for deep funding. FDI incentives should be tied to know-how switch commitments and co-development with home companies, not simply tax holidays.
On human assets, the goal of fifty,000 semiconductor engineers by 2030 should be accompanied by standardized benchmarks and {industry} co-designed coaching applications. Taiwan’s expertise underscores the worth of tight “authorities–college–{industry}” linkage, the place college students and engineers achieve hands-on expertise on actual manufacturing traces. With out such hyperlinks, even large-scale coaching efforts will battle to generate aggressive functionality.
Efficient governance additionally requires higher knowledge and a stronger concentrate on inclusivity. Whereas the digital economic system’s 18.3% share of GDP is encouraging, the following step is to disaggregate these contributions by sector and area to design simpler insurance policies. That is essential for addressing the vast hole in technological literacy between adaptive city facilities and lagging rural areas, guaranteeing nationwide initiatives are inclusive.
Finally, policymakers should keep away from “idolizing” know-how when institutional foundations and execution capability aren’t but in place. Around the globe, main semiconductor initiatives have collapsed as a consequence of paperwork, infrastructure gaps or labor shortages.
South Korea’s success stems not solely from monetary capability however from disciplined implementation and powerful home enterprises. Taiwan doesn’t simply have TSMC—it has a “TSMC ecosystem” supported by a extremely educated, well-paid and prestigious workforce.
The lesson for Vietnam is to patiently construct dependable and clear supporting industries and establishments that instill investor confidence, whereas concurrently coaching competent specialists with stable abilities.
Vietnam’s potential for technological breakthroughs is clear in its increasing digital economic system, high-tech exports and rising semiconductor funding. Nonetheless, to translate this promise into actuality and really “turn into a dragon” by 2045, a collection of decisive actions is required.
The nation should elevate R&D spending, focus assets on high-priority clusters, standardize coaching in semiconductors and AI to worldwide ranges, and intrinsically hyperlink FDI incentives on to know-how switch and localization. Solely then can know-how genuinely function the engine propelling Vietnam towards stronger growth and deeper world integration.
Nguyen N Hanh revealed this text in Luat Khoa Journal. Dam Vinh Grasp translated it into English for The Vietnamese journal. Asia Occasions is republishing right here with variety permission.
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