Vietnam Comes 92nd in Technology Ranking

Vietnam Comes 92^nd in Technology Ranking

It has become an urgent issue for Vietnamese enterprises to renew their technology and equipment for further development. According to Michael Porter, economics expert, scientific and technological factors account for one third of the factors impacting competitiveness in developed countries. These may be lower in developing countries, but remain decisive factors.

According to a survey conducted in the textile and garment, and chemical industries within a report entitled ‘Technology renewal in Vietnamese industrial enterprises,’ some progress has been seen in surveyed enterprises. Vietnamese enterprises now spend three per cent of their revenues renewing technology and equipment, instead of 0.8 per cent in the past. In particular, the private enterprise of Phuoc Thinh invested 24.6 per cent of its revenues for this purpose. As a result, the enterprise has seen a high growth rate. Vietnamese enterprises’ awareness of the importance of technology and equipment renewal has improved with over 90 per cent of surveyed enterprises saying that it was of necessity.

However, the textile and garment industry is constrained in their initiative in technology as subcontracts account for over 70 per cent of their business, therefore their technology is decided by their employers. Dr Le Dang Doanh, senior economist at the Ministry of Planning and Investment said: “At present, when Vietnam is actively negotiating its accession to the World Trade Organisation (WTO) later this year, and the textile and garment industry is facing its  first year of quota removal, technology renewal has become increasingly vital.” Doanh said that the technology for Vietnamese textiles and garment making enterprises could produce low-end products. He said that if they wanted to make high-end products, they would have to meet higher requirements on technology, management and workers’ skills.   

The report shows significant difference in technology renewal in the chemical and textile and garment industries. Accordingly, 40 per cent of surveyed enterprises in the chemical industry have co-operated with domestic scientific research agencies and over 50 per cent have developed research activities, while most  enterprises in the textile and garment industries have bought equipment from foreign countries and imitated samples from foreign countries. Forty three per cent of enterprises in Ho Chi Minh City have developed their own research activities or co-operated with local research agencies. This is higher than that of 34 per cent in Hanoi. Seventy per cent of surveyed enterprises in Hanoi have bought equipment from foreign countries while this figure is put at 45 per cent in Ho Chi Minh City. Looking at the survey results and the World Economic Forum’s ranking in terms of technology innovation, there is clearly a large gap in technology between Vietnam, and Thailand and China.

Among the indices, Thailand is most successful in technology transfer, ranking 43^rd while Vietnam comes 92^nd. This requires Vietnam to make further efforts in technology investment and renewal.

• Thi Van