Developing Knowledge Economy in Sustainable Growth Strategy

To implement effectively the strategy of sustainable economy growth in the period of 2011-2020, experts recommended that apart from promoting different solutions, Vietnam needs to boost the development of knowledge economy. The orientation is very flexible and suitable to the world economy’s development trend at present as well as in future.

According to the World Bank (WB), a nation which wants to move to the knowledge economy needs to build four main pillars, comprising education, invention, information and technology (IT) and communications infrastructures and system of economic policies and institutions.

 

Based on average indexes from data of the four main pillars, the WB has built the Knowledge Economy Index (KEI) in order to assess preparations of each nation to move to the knowledge economy. There are total 81 criteria to compare the correlation of 132 countries, with the lowest score of zero and the highest of 10. According to the KEI 2006, Viet Nam got 3.17 score and ranked the 96^th of 132 nations. Viet Nam dropped back most of East Asian - Pacific countries (EAP) about knowledge economy index. Viet Nam’s score of 3.16 was much lower than the EAP’s average score of 6.61. However nationally, Viet Nam has remarkably improved its status, rising 12 ranks against 1995 when the country got 2.62 scores.   

 

Over the past years, the Vietnamese government has paid special attention to education and listed education among leading priority policies. The state budget for education has constantly increased for years. However, compared to other countries in the region and the world, Viet Nam’s education still keeps a wide gap. The rate of university and college students of Viet Nam is only 16 per cent, in comparison to the EAP average of 38 per cent. Under the current reports of the UNESCO, the major obstacle to the Vietnamese education’s development pace is the low rate of university students.

 

Moreover, to make the education become practical to the national economic growth, it is necessary to boost other factors, for example the policy of encouraging innovation and creation; the training fields suitable to the economy’s demand; application of scientific and technological researches and connection between training schools and enterprises. According to the modern economics, the education and the above-mentioned factors create a concept called the Total Factor Productivity (TFP). This is a new concept which is to assess the role of knowledge accumulation in the economic growth, apart from tradition accumulations of capital and labor. Under the concept, scientists show that if from 1960 to 2003 South Korea’s GDP per capita increased 11 times, contributing to bring South Korea to become a developed country, up to 72 per cent of the growth came from the knowledge accumulation, with the university development playing an extremely important role. 

 

Many economists worried that behind the data of economic growth in width, there were alarming signals relating to the growth quality, effectiveness and competitiveness. The proportion of TFP has gradually fallen down and stands at about 20 per cent currently. This is ominous because those of regional countries still remain quite high like Indonesia, 43 per cent; the Philippines, 41 per cent; Thailand, 35 per cent. Obviously, Viet Nam has not yet solved the math of education development and not trained qualified human forces to serve the economy’s demand.    

 

Regarding invention, Viet Nam has few invention works. According to scientists, all three countries of Thailand, Singapore and Viet Nam mostly had the same point of departure in 1973. But by 2000, Viet Nam’s number of scientific works published on international magazines was only equal to those of Thailand and Singapore at the time of 1980. Currently, the number of scientific works of Thailand is five times higher than Viet Nam’s while Singapore exceeds us 12.5 times although its number of scientists is less than. Despite the fact that Viet Nam has an enormous team of over 2 million scientists, tens thousands of PhD and MA, nearly 2,000 professors, 6,000 associate professors and millions of bachelors and engineers, the country’s invention field is much inferior to other ASEAN countries. 

 

Among the four main pillars of the knowledge economy, the IT and communication is the one having the strongest growth with 3.49 scores (compared to the world’s average score of 6, Malaysia 7.3 and Singapore 9.19). However, Viet Nam’s force of IT workers remains modest and many of them lack experiences. Of the total 40 million Vietnamese workers, only 20,000 ones are operating in the IT field and there are only 3,500-4,000 IT graduates annually. In addition, Viet Nam’s ICT growth is lowest in the region. Viet Nam reaches 3.49 scores of ICT index, compared to the EAP’s 7.04 scores. 

 

Notably, the Vietnamese software industry reached the average growth pace of over 30 per cent over the past ten years. With many priority policies for the IT sector particularly software industry, Viet Nam expects to train nearly one million IT experts and the sector’s growth reaches 30 per cent-40 per cent by 2015. The country also hopes to become the world’s third biggest provider of software only after India and China. In term of the software processing, if the annual growth pace of 40 per cent continues to be kept, by 2020 Viet Nam’s export turnover of software will be able to get US$3.5 billion. The main markets of Viet Nam’s software exports are North America, Japan and Europe.     

 

According to the assessment of international organizations, although the growth pace of Viet Nam’s IT and communication has maintained double-digit since 2000 up to now, Viet Nam’s status in the world’s map of knowledge economy still stands at the medium-low level due to the low point of departure. Even, some criteria of Viet Nam like the willingness for the e-economy stand mostly at the bottom.

 

Over 25 years of implementing the reform and development process, Viet Nam’s system of economic policies and institutions have been improved step by step. The WB reports in recent years all recognized the Vietnamese economy’s achievements among developing countries. One of the important policies having contributed to bring achievements is the decentralized economy which reduced the number of state firms while increased private enterprises and moved the economy structure from the concentrated planning to the market orientation with a series of reforms in order to make the legal system transparent and suitable to the international standards.

 

However, Viet Nam is still a developing country with many barriers such as transparence of economic policies, corruption and weakness of legal enforcement.

Associate Professor Ph.D Han Viet Thuan of the National University of Economy said in the years to come, the government should further invest in education as well as carry out a comprehensive reform in the sector, starting from basic issues such purposes of the Vietnamese education. The move is significant to help Viet Nam more quickly access to the knowledge economy. Thuan expressed the need to universalize the junior high education nationwide while universalize the senior high education in urban areas, industrial zones and populous areas. Training more workers in the science and technique fields, skillful workers, managers; expanding the education and science cooperation with foreign countries and sending a number of laborers in the strategic fields to study abroad are also vital in the upcoming time. 

 

Besides, Viet Nam needs to develop and improve the invention capability. The fact shows that few countries can gain the high development pace without the good system of property. In near future, Viet Nam must focus on building the legal system on intellectual property rights. According to the International Property Rights Index, Viet Nam ranked low, at the 80^th among 120 surveyed countries in 2010.   

 

Thuan expressed that Viet Nam needs to build and upgrade its IT and communications infrastructures. Decision No. 246/2005-CP on IT and communication development strategy by 2010 and a vision to 2020, along with Decision No. 51/2007-CP of the government have outlined measures for the development of IT and communications in next ten years.

 

However, to carry out the strategic orientations, authorities would continue to study and offer more specific policies, for example the priority policy for enterprises who invest into IT infrastructures. Enterprises should be given priorities in hiring flats in high-tech parks, borrowing bank loans, in exporting or importing IT products and services in accordance with Viet Nam’s integration commitment.

 

One urgent task in developing IT and communications facilities in Viet Nam is the construction of high-tech parks. Apart from current parks such as Saigon Software Park, Quang Trung, Lang-Hoa Lac High-tech, Haiphong software center, Danang software park, Hue software center, the country should build more new ones in the northern region, particularly Hanoi and Haiphong.

 

Experts also recommended Viet Nam to complete the system of economic policies and institutions, specifically the reform of management mechanism. In accordance with the IT term, this is special software to operate the society. Viet Nam also needs to increase the governmental transparence, boost anti-corruption and facilitate the people to attend law-making process.