Resolution 10 equals growth driven by strategic innovation
A massive strategic overhaul is underway regarding Vietnam s embrace of foreign investment Il Dong Kwon managing director and partner at BCG Vietnam spoke to VIR s Bich Ngoc about improving the quality of foreign funding and related resolutions to boost high tech sectors
Vietnam's shift from a cost-driven to an innovation-driven growth model hinges on five key policy measures. Firstly, with credit-to-GDP above 140%, the nation can access more equity, venture capital and corporate bonds, which forms part of the innovation policy. Secondly, the 200% research and development (R&D) super-deduction is positive; however, Vietnam's current R&D spending only accounts for 0.4-0.5% of its GDP.
Tax incentives alone are insufficient; hence, direct government co-funding could support early-stage, high-risk R&D. Thirdly, Vietnam can transition from a "managing" to a "facilitating" state by introducing regulatory sandboxes, reducing processing times and business conditions by at least 30%, moving away from the "request-and-approval" model, and ensuring faster, more predictable approvals.
Fourthly, developing sector-specific talent in strategic areas like semiconductor integrated circuit design and AI through industry-aligned training could be beneficial. Lastly, prioritizing anchor investors committed to technology transfer and stronger domestic links can create industrial ecosystems and make foreign direct investment (FDI) a catalyst for innovation, technology upgrading, and domestic value creation.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
