Against the backdrop of an unpredictable global economic situation, Vietnam is actively exploring innovative economic growth models to promote sustainable development. Experts point out that Vietnam must innovate its economic growth model through high-tech development, supporting innovative startups, and transitioning to a green economy. Vietnam’s Prime Minister Pham Minh Chinh visited the Vietnam International Innovation Expo (VIIE 2023) in October 2023, highlighting the Vietnamese government’s emphasis on innovation. This event raised public awareness of the importance of innovation and demonstrated its potential to drive economic and social progress.

Last week, Politburo member and Prime Minister Pham Minh Chinh chaired the third meeting of the Socio-Economic Subcommittee of the 14th National Party Congress. The meeting reviewed the draft report on the implementation of the first five years of the 2021-2030 socio-economic development strategy and discussed the socio-economic development directions and tasks for 2026-2030. These drafts will undergo further discussion before submission to the Politburo and the 10th meeting of the 13th Party Central Committee.

Prime Minister Pham Minh Chinh emphasized at the meeting that economic development remains a core priority. He called for reinvigorating traditional growth drivers while strongly advancing new sources of growth. Vietnam’s strategy is to promote traditional growth drivers such as investment, exports, and consumption while actively fostering the development of emerging areas such as digital economy, green economy, circular economy, sharing economy, and knowledge economy.

Challenges and Opportunities in Economic Growth

Although Vietnam’s economy achieved significant growth of 6.42% in the first half of 2024, expected to approach 7% by the end of the year, surpassing expectations for the fourth consecutive quarter, experts warn that Vietnam’s economic growth still relies on a relatively backward model. Bui Quang Tuan, former director and associate professor at the Vietnam Institute of Economics, points out that the current growth model still mainly depends on capital and labor, while the contributions of Total Factor Productivity (TFP) and labor productivity are gradually decreasing. Vietnam’s investment in science, technology, and innovation is only a quarter of the global average, accounting for about 0.56% of GDP, compared to the global average of 2.2%.

Moreover, the private sector’s investment in R&D is also low, at only 0.44%, while this ratio exceeds 80% in South Korea. Although Vietnam’s labor productivity grew at an annual rate of 5.8% between 2016 and 2020, higher than the 4.3% from 2011 to 2015, it still lags behind China and India’s 7% and 6%, respectively.

Transformation Strategies and Future Directions

Facing these challenges, the Vietnamese government recognizes the urgency of transformation and upgrading, and has clarified future development directions. Prime Minister Pham Minh Chinh pointed out at the World Economic Forum in Davos that Vietnam will continue to prioritize development through flexible policies adapting to national conditions, environment, and global trends. Experts believe that promoting science, technology, innovation, digital transformation, and green transformation are key to innovating growth models. Vietnam needs to create an environment conducive to innovation and technological development through policy support and institutional reforms to achieve quality growth.

Furthermore, Vietnam emphasizes the importance of transitioning to a green economy and digital economy. Economist Vu Tri Thanh points out that Vietnam must radically change traditional methods and fully embrace new trends such as digitalization and green transformation to drive growth. Although discussions about economic growth models have been ongoing for the past decade, transforming innovative visions into reality remains challenging. Vietnam needs to take proactive policy adjustments to avoid missing development opportunities.

Key Focus Points

• Vietnam is actively exploring innovative economic growth models, focusing on high-tech development, innovative startups, and green economic transformation.
• The government highly values innovation, placing economic development as a core priority while promoting both traditional and emerging growth drivers.
• Despite significant economic growth, it still relies on a relatively backward model, with room for improvement in technological investment and labor productivity.
• The Vietnamese government recognizes the urgency of transformation and upgrading, emphasizing the importance of technological innovation, digitalization, and green transformation.
• Experts call for Vietnam to adopt proactive policy adjustments and fully embrace new trends to achieve high-quality economic growth.

For enterprises intending to enter the Vietnamese market, Vietnam’s innovative development strategies and policy orientations offer numerous opportunities for foreign investors. Particularly in the fields of high technology, green economy, and digital economy, Vietnam is creating a dynamic and potential-filled market environment. Businesses can leverage Vietnam’s policy advantages to actively position themselves in emerging markets, optimize resource allocation, and achieve sustainable development.

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