Corporate Innovation in Digital Age

According to Deputy Minister of Planning and Investment Dang Huy Dong, innovation is considered a golden key for pushing up economic growth and national competitiveness. Being fully aware of this importance, in the Socioeconomic Development Strategy of 2011-2020, the Government of Vietnam clearly underlined the need to apply scientific and technological innovation to enhance corporate competitiveness and support sustainable economic growth. This means that it is necessary to reform the national innovation system, enhance the capacity of research and development (R&D) institutions, and strengthen the collaboration of R&D institutions and enterprises to raise productivity and competitiveness and develop appropriate public-private financing mechanism to support innovation.

 

However, according to recent reports by international research institutions in Vietnam and in the world, Vietnam’s innovation capability is still limited in fact. According to the Global Competitiveness Report 2014-2015 by the World Economic Forum (WEF), Vietnam’s technological readiness was ranked 99^th out of 144 economies and innovation was placed at 87^th. In the Global Innovation Index Report 2014 by the World Intelligent Property Organisation (WIPO), Vietnam was ranked at 71^st out of 143 economies by innovation index whereas other ASEAN countries had higher ranks, e.g. Singapore securing the 7^th position, Malaysia at 33 and Thailand at 48. These require the Government of Vietnam promote potential creativity, improve innovation capabilities, and bring national economy into another stage of rapid growth.

 

He added that Vietnamese small and medium-sized enterprises (SMEs) - the vast majority in the economy - reconfirm their vital roles in creating jobs and improving incomes, forming the backbone of the socioeconomic growth. However, the technological capability and innovation potential in Vietnamese enterprises is limited. Only 10 percent of total enterprises have tried to apply or apply successfully a patent within three recent years. Most Vietnamese enterprises hardly own an innovative patent. The investment of Vietnamese enterprises in technological innovation accounts only 0.2-0.3 percent of revenue on average meanwhile the rate is 5 percent and 10 percent in India and South Korea, respectively.

 

Professor Tran Tho Dat, Rector of the National Economics University, affirmed that, in this dynamic global economy, innovation has become urgent. And, innovation is a way to deploy new ideas to create value better than existing methods. However, such innovation is a long and persistent process and requires human talents, a critical mass of skilled people. In Vietnam, the business community is the engine of economic development. Vietnam’s economy has been changing model from extensive to intensive growth. This process requires economic restructuring with three contents: SOE restructuring, investment restructuring, and financial market system restructuring. Particularly, financial market restructuring has made a progress from the restructuring of commercial banking system and the restructuring of SOEs. In the context of increased competition, the business community is under pressure to change the way of doing business and governing the company. They need to strive more in innovation and translate it into competitive advantage with the ultimate purpose of organisational and economic growth.