Hanoi needs to encourage the private sector to set up a venture capital association and seek incentives for venture investment to boost business development, local experts recommended at the seminar "The Role of Innovation for Capital Businesses" on October 1 in Hanoi.

Hosted by the Hanoi People's Committee in cooperation with the Ministry of Science and Technology, the seminar was part of Techconnect & Innovation Vietnam 2024, which celebrates the 65th anniversary of the Ministry and the 70th anniversary of the liberation of Hanoi.

To improve innovation in the capital goods industry, the experts urged greater collaboration between research institutes, universities, and companies to address key challenges.

Delegates discuss how to incentivize Hanoi to innovate. Photo: Laodongthudo Newspaper

Speakers noted that while the demand for innovation is high, Vietnamese businesses, particularly in the capital, continue to face limited funding, a shortage of skilled workers, insufficient information about new technologies, and market access barriers.

To address these issues, companies need support in management consulting, technology transfer, branding, and partnership. It requires a better business environment with supportive policies, experts said.

Tailoring policy packages for different business groups

At the seminar, Nguyen Truong Phi from the State Agency for Technology Innovation (Ministry of Science and Technology) emphasized that innovation is crucial for Vietnam to maintain rapid and sustainable growth in the next phase of development. Current mechanisms and policies provide a legal framework to support companies in their technical and technological needs in researching, developing, producing, and marketing various technological capabilities.

Financial incentives are boosting confidence in technology investment, and companies in Hanoi enjoy special benefits under the amended Capital Law of 2024. However, it requires more cooperation among sectors and state agencies.

Phi categorized businesses into four groups based on their development goals: large, small and medium, science and technology-based, and innovative start-up. "To address the specific needs of these groups, tailored policy packages need to be developed to ensure that they can effectively "absorb" the benefits when these policies are rolled out," he stressed.

Hanoi - leading innovation hub in the country and South East Asia

Hoa Lac Hi-tech Park is to be established to foster technological innovation and entrepreneurship.

Nguyen Quoc Ha, Deputy Director of Hanoi's Department of Science and Technology, said Hanoi aims to establish itself as the leading innovation center in Vietnam and the region, with the Hoa Lac Hi-tech Park at its core, supported by research institutes and universities, and with enterprises at the forefront.

The city has launched a series of programs and specific plans to encourage and support enterprises in technology innovation, build a vibrant startup ecosystem, develop the science and technology market, and attract top domestic and international experts and scientists.

The recently approved Capital Law is expected to address existing challenges in science management and strengthen innovation activities in research institutes, universities, and enterprises.

Ha also highlighted the significant impact of innovation activities on different sectors, including production, business, and educational institutions.

Hanoi has emerged as Vietnam's leader in the 2023 Provincial Innovation Index (PII). The city tops the national ranking with 168 science and technology enterprises, accounting for 21% of the approximately 800 such enterprises nationwide.

In addition, Hanoi is home to more than 1,000 innovative start-ups, accounting for more than 26% of the national total. The city also boasts nearly 300 high-tech agricultural production models that have produced positive results. In addition, digital transformation is being actively implemented in all local units.

Le Hong Son, Permanent Deputy Chairman of the Hanoi People's Committee, speaks at the opening ceremony. Photo: Hanoimoi Newspaper

At the opening ceremony of Techconnect & Innovation 2024 on September 30, Le Hong Son, Deputy Chairman of the Hanoi People's Committee, highlighted the city's commitment to connecting businesses and individuals with scientists, experts, and scientific organizations.

He said the amended Capital Law has introduced specific mechanisms and incentives to support the development of high-tech zones, innovation centers, and advanced technology business models in Hanoi.

The amended law includes provisions to encourage the application and transfer of technology, to help companies invest in research and development (R&D), and to facilitate the commercialization of research results. It also allows universities, research institutes and public scientific organizations to establish companies.

Son emphasized that an important new feature of the law is the mechanism for controlled experimentation (sandbox) in certain sectors, especially for emerging technologies. This helps Hanoi adopt technological advances while fostering the growth of innovative start-ups.

"Hanoi is committed to working with businesses, organizations, and scientists to create the best conditions for the development of science, technology and innovation," the Son said.