Ho Chi Minh City puts businesses at center of innovation

Ho Chi Minh City is prioritizing businesses as key players in innovation to translate investments in science and technology into tangible results. The city's 2026 Provincial Innovation Index (PII) ranked second nationally, with 12 out of 52 indicators leading the nation. However, Ho Chi Minh City fell short of Hanoi's 65.68 score by 6.35 points, scoring 59.33 overall.

Its input score improved from 60.59 to 65.21, while its output score dropped from 58.36 to 53.44, pushing the city to fourth place in output. Despite strong institutions, infrastructure, markets, and human resources, the city's output, such as patents, science and technology enterprises, productivity, and production value, has not kept pace with its favorable conditions.

Progress has chiefly been driven by the public sector, with improvements in administrative reform, e-governance, education spending, and the city's ranking in institutions rising from 30th to seventh. Meanwhile, the business sector and innovation outputs have weakened, with labor productivity growth close to zero and ranking Ho Chi Minh City 33rd out of 34 localities.

The main reason is that businesses have not become the center of innovation, as R&D investment accounts for only 0.08 percent of gross regional domestic product (GRDP), and weak links between businesses and research institutes and universities hinder innovation from translating into productivity gains. To address these shortcomings, the city plans to place businesses at the center of innovation through measures like increasing science and technology spending, mobilizing business investment in R&D with seed funding, commissioning business-focused research, recognizing science and technology enterprises, and implementing productivity improvement programs for manufacturing businesses.