While it took Japan and South Korea 40 years to be among the world’s most advanced countries, Vietnam, after 45 years of independence, remains a middle-income country with low competitiveness, according to Minister of Planning and Investment Nguyen Chi Dung.

Minister of Planning and Investment Nguyen Chi Dung at the meeting. Photo: MPI.

The majority of Vietnamese enterprises mainly assemble components and parts imported abroad, which restricts them from further integrate into global value chains and form strong linkages with foreign peers, said Mr. Dung at a meeting on September 10 discussing the development of Vietnam’s science and technology sector in the 2021 – 2025 period.

The core issue for this problem is the underdeveloped technological base, stressed Minister Dung.

According to Mr. Dung, Vietnam only has 10 years to turn things around and take advantages of technologies for development since the country’s population starts aging by 2030.

In this context, the Industry 4.0 is a golden opportunity for Vietnam, the minister said, adding the country should focus on a national strategy for the Industry 4.0 and an ecosystem supporting the development of R&D and innovation companies.

At present, Vietnam has established a national innovative center with representative offices in five countries and the figure could be raised to 10 in the coming time, Mr. Dung said.

As investment in science and technology is a long-term process, Mr. Dung expected the country to prioritize major projects with strong spillover effects, attracting the participation of both foreign and domestic experts. The goal is to create new hi-tech products that have significant contribution to Vietnam’s socio-economic development, he said.

Vice Minister of Science and Technology Le Xuan Dinh said due to the economy's small scale, state budget allocated for science and technologies development is estimated at 0.53% of GDP, significantly lower than the global average of 2.23%.

A higher proportion, around 1.5 – 2% of GDP for R&D, is essential to create breakthroughs in economic development, Mr. Dinh said.

In the 2021 – 2025 period, it is estimated that VND8.45 trillion (US$364.3 million) is required for public science projects, while the Hoa Lac hi-tech park, of the largest of its kind in Vietnam, would need at least VND5.12 trillion (US$220.8 million) for further development in the next five-year period.