A Review of Science, Technology and Innovation in Vietnam

• Vietnam is approaching the crossroads of development. To boost GDP growth under labor and capital constraints, the country will have to rely more on gains driven by productivity. This will require considerable improvements in domestic innovation capabilities.

• SWOT analysis of Vietnam’s science, technology and innovation (STI) system

+ Strengths:

- Strong economic performance and diminishing poverty levels.
- Geographical location in one of the world’s most dynamic regions.
- Sizeable labor force and favorable demographics.
- Substantial national education effort and good secondary education performance.
- Attractiveness for investment by multinational enterprises.
- Export strengths in a range of sectors.
- Good reputation in science and technology (S&T) fields such as mathematics, and specialization in agricultural research and biology.
- Progress in creating and sustaining a set of organizations and institutions to support innovation.
- Regional initiatives of national benefit.

+ Weaknesses:

- Low levels of productivity and income.
- Inadequate framework conditions and disincentives for innovation.
- Limited access to finance for enterprises.
- Inefficiencies in state-owned enterprises.
- Infrastructure deficiencies.
- Weak performance of the teaching and learning system.
- Low level of sophistication of production and exports.
- Little innovation and even less research and development capacity in the business sector.
- Weak performance of public-sector research.
- Weaknesses in the S&T infrastructure as regards laboratories and research equipment.
- Seriously underdeveloped information base for innovation policy making.
- Inadequate STI governance arrangements and policy implementation.

+ Opportunities:

- Further developing the human capital and skills base involving the sizeable Vietnamese diaspora.
- Nurturing a dynamic business sector and its innovation capabilities.
- Diversifying and upgrading the economy.
- Developing a healthy attitude to risk-taking.
- Improving effectiveness of the innovation system in terms of economic and social impact.
- Strengthening inclusive growth.

+ Threats:

- Unfavorable macroeconomic developments and a slowdown in growth.
- Failure to improve the institutional and business environment by tackling banking system reform and corruption.
- Increasing brain drain.
- Failure to prepare for increased international competition.
- A looming middle-income trap.

• Recommendations:

- Improving framework conditions for innovation
- Improving public governance of the innovation system
- Strengthening the human resource base for innovation
- Fostering innovation in the business sector
- Increasing the contribution of public research
- Fostering innovation linkages