Last updated: Thursday, February 21, 2019


Developing Market of Science and Technology in Vietnam

Posted: Tuesday, September 11, 2018

Technological innovation is a vital requirement, said Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), at the Forum on “Interconnecting Model to Promote and Develop the Market of Science and Technology in Vietnam” held recently in Hanoi.

Dr Loc said, Vietnamese companies’ applied technological level is quite backward. According to a survey conducted by VCCI, nearly 60 per cent of manufacturing and processing enterprises are using technologies which are over six years outdated. Up to two-thirds of their technologies come from developing countries, with more than a quarter from China. Technologies originated from developed countries such as the United States, South Korea, Japan or the European Union (EU) account for only 32 per cent, with nearly 20 per cent used before 2005.

Technological innovation is an urgent need against the backdrop of international integration and especially the Industrial Revolution 4.0, to improve the competitiveness of Vietnamese enterprises, VCCI President Loc said.

To date, the Government has completed the legal framework to develop science and technology, and start-ups, and promote the scientific and technological market. A lot of policies are designed to support corporate research and promote cooperation between scientific research institutions and corporate entities.

The Ministry of Science and Technology has also launched many scientific and technological research support programmes. However, research and development (R&D) has not become an important investment or business activity in many companies; direct interconnection between enterprises with scientific and technological research institutions remains very weak; and intermediary institutions on scientific and technological markets have not yet developed. Therefore, enterprises’ internal resources for scientific and technological research are poor. In addition, their cooperation with technologists and scientists to improve their capacity is weak. The scientific and technological market in Vietnam has not really grown to help businesses find and buy technology or know-how they need.

According to Dr Loc, the corporate innovation survey result, part of FIRST-NASATI project, showed that nearly 85 per cent of enterprises carry out R&D to make new products and only nearly 14 per cent collaborate with outside units to launch product innovation research. Meanwhile, technology transfer performed by science and technology organisations to businesses is very low (less than one per cent). "Where is the remaining 99 per cent? This is a huge waste," he emphasised. This shows that the link between enterprises (demand side) with institutes, schools and scientists (supply side) in the market of science and technology is still limited. There is still a great distance between research conducted by scientists and that accepted by business practices. While enterprises are groping in technological research and innovation on their own, scientists are embracing their research works and putting them on the shelf at institutes and schools.

VCCI President Loc added that Vietnam can learn from a lot of technology transfer linkage models right in ASEAN, such as Malaysia. To boost the scientific and technological market, Malaysia introduced the knowledge transfer programme (KTP), engaged by three key actors: business, institute/school and intermediary. And business is the heart of the programme.

As a national body representative of the business community, VCCI has been active in helping businesses update and renovate their equipment. Through its cooperation programme with the Ministry of Science and Technology, VCCI has organised more than 60 seminars and forums to disseminate technology information and introduce new technologies to businesses in various fields since 2007. VCCI has introduced, connected and transferred from technologies of domestic research institutes and universities to technologies of multinational corporations to Vietnamese enterprises.

The transfer of technology from multinational corporations to domestic firms remains unsuccessful, said VCCI President Loc. Vietnam has only succeeded in attracting large corporations to invest in technologies, but has not been successful in linking multinationals with Vietnamese to diffuse the technology.

At present, Vietnam's economy has integrated with the world and FDI companies are playing the most important role in this process. 72 per cent of exports from Vietnam to the world are made by foreign-led manufacturers. Therefore, the integration of domestic businesses with the world will depend on two important standards of governance and technology. We have not yet integrated with FDI firms in Vietnam, the ratio of technology transfer from FDI firms to local partners is lowest in ASEAN. This problem needs to be addressed.

The weak technology transfer from scientific researchers to enterprises, including FDI firms, results in little technological improvement in Vietnamese companies. Therefore, business development is an important approach. "In linking the development of scientific and technological market, enterprises must play a central role and scientists are partners. Technological scientists and enterprises must be symbiotic in the value chain consisting of authorities, scientists and businesses.

In addition, according to Dr Loc, the Prime Minister decided to set up a new Committee on Public-private partnership (PPP). PPP is not only a partnership, but a private-public partnership in technological research and promotion in enterprises. The private sector is the driving force, assisted by the State, the Ministry of Science and Technology, and cooperated by scientists, to success.

"PPP is not simply the public-private partnership as we usually talked about, not just the fundraising for road and infrastructure construction, but it needs to be understood more broadly, meaning the cooperation and synergy of the State and the enterprise in industrial and technological development,” he noted.

“Public-private partnerships in technology development in key economic sectors in Vietnam are very important. I hope that we could work with the Ministry of Science and Technology to devise a PPP formula for the scientific and technological field to promote business development. This is probably one of the most important partnership programmes. Entrepreneurship and the Industry 4.0 will be the two main drivers of Vietnam's economy in the future,” Dr Loc added.

According to experts, in order to develop the scientific and technological market, Vietnam needs to create a favourable environment and foster connectivity and commercialisation of technology and intellectual properties. Foreign firms can support establishing incubator systems, transfer knowledge, train experts and managers to commercialise research results and integrate into global research networks to quickly approach the latest trend of the Fourth Industrial Revolution.


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