More Policies are Expected to Promote Science, Technology and Innovation in Vietnam

More Policies are Expected to Promote Science, Technology and Innovation in Vietnam

By Nga Dao | 19 October 2022

Photo by Minh Luu on Unsplash

The World Intellectual Property Organization (WIPO) has released the 2022 edition of the Global Innovation Index (GII), tracking the most recent global innovation trends against the background of an ongoing COVID-19 pandemic. This year, Vietnam ranks 48^th among 132 economies and together with Iran and the Philippines are “the middle-income economies with the fastest innovation performance growth to date”, according to WIPO. This is also the 12^th year in a row that Vietnam continues to be among the record-holders for outperforming in innovation.

This achievement should be attributed to the Government’s strong direction, supportive policies and investment incentives for the development of the national ecosystem for science, technology and innovation over the past decade.

Vietnam’s policy framework for the promotion of science, technology and innovation (STI) is quite comprehensive. This covers investment incentives for STI activities and initiatives provided in the  Investment Law and Corporate Income Tax Law, mechanisms in support of startups and SMEs under the Law on Support for SMEs, Decree 39/2018/ND-CP and Decree 38/2019/ND-CP, support for human resources development and promotion of technology transfer under the 2017 Law on Technology Transfer, among others.

This year, Deputy Prime Minister Vu Duc Dam signed off Decision No.569/QD-TTg dated May 11, 2022, issuing a strategy for scientific-technological development and innovation until 2030. The strategy sets key targets for 2030, aiming for Vietnam to be among the top 40 GII countries with science and technology (S&T) investment accounting for 1.5%-2% of GDP, 40-50 Vietnamese S&T organizations on regional and international rankings, and 40% of total companies having innovation activities.

The strategy provides directions for the development of advanced technologies in information and communication, biology, new materials, manufacturing and automation, marine, disaster and climate change control, energy, environment, aerospace, smart building and transport. With regard to ICT, priority will be given to research and application of cloud computing technologies, IoT, AI, blockchain and metaverse as well as the building of big data centers to help accelerate digital transformation and development of digital government, digital economy and digital society. It is aimed that Vietnam will master cybersecurity, 5G, quantum and terahertz technologies.

The Government also plans to build a system of national, regional, and sectoral innovative centers as well as startup support centers that connect with hi-tech parks, residential areas, financial centers, venture capital funds, universities, and research institutions in order to form innovative clusters.

In the same move, very recently Prime Minister Pham Minh Chinh instructed the Ministry of Science and Technology (MOST), government agencies and local authorities to implement a series of solutions in order to boost the development of Vietnam’s S&T market. The instruction follows a hybrid conference chaired by the Prime Minister in late September that brought together many cabinet members, scientists as well as representatives of ministries, international organizations, universities, research institutions and companies to discuss challenges and solutions for the S&T market development. Such solutions include developing and piloting incentives for commercialization of research outcomes, encouraging public-private partnerships and private investments in such commercialization projects; encouraging enterprises to import core technologies; formulating policies to encourage startup, innovation, development of big data and shared data so as to boost the growth of the S&T ecosystem.

To facilitate STI activities, this year the National Assembly already approved the amended IP Law. From now to 2026, the top legislative body plans to revise and pass several other laws, including the Law on Science and Technology, the Law on Technical Regulations and Standards, the Law on Product and Goods Quality, and the Law on Atomic Energy.

With the current incentives, upcoming solutions and policy changes, it is expected that the local S&T market will become more lively and attractive, promising new opportunities for all relevant actors, including the private sector to join. It is therefore strongly recommended that companies closely monitor developments of Vietnam’s STI policies and S&T market should they consider making investments in this area in Vietnam.