Research and development (R&D), innovation, and science and technology are increasingly seen as the key drivers behind Vietnam’s ambition to post double-digit growth from 2026 to 2030 and perhaps beyond. But with a sea of technological opportunities ahead, a critical question emerges: Should Vietnam invest in building a sustainable “digital expressway” as its foundation, or take bold bets on breakthrough sectors?

This was the central debate during a recent discussion on shaping a sustainable regional R&D ecosystem, held under the Vietnam Research and Development (R&D) Forum 2025, a two-day event co-organized by the Association of Vietnamese Scientists and Experts (AVSE Global) and the Ninh Binh Provincial People’s Committee, in Vietnam’s northern region. Experts and policymakers explored strategic directions for the country and high-potential localities like Ho Chi Minh City, seeking fresh approaches and priority sectors that could attract investment and mobilize resources to accelerate their transformation journey.

5I framework for Vietnam

To help answer this question, AVSE Global introduced the 5I analytical framework, an expanded version of the World Bank’s original 3I model, tailored specifically to Vietnam’s context. While the original 3I framework outlines three development stages: Investment, Infusion, and Innovation, AVSE Global added two foundational pillars to the model: Innerpower and Internationalization.

“This addition highlights the importance of foundational elements, particularly an efficient public administration system and the technological capabilities of universities and local ecosystems,” said Associate Professor Tran Phuong Tra, MBA Program Director at the IPAG Business School in France and Chief of the Development Office & Economic Policy Director at AVSE Global. “A strong inner capacity is essential for Vietnam to attract major partners to collaborate, invest, transfer technology, and foster innovation.”

To operationalize this framework, Dr. Phung Duc Tung, Director of the Mekong Development Research Institute, shared a study on applying the Smart Specialization Strategy at the local level. This approach aims to help localities make effective investment decisions when resources are limited. This strategy is based on key principles: starting from existing strengths (bottom-up), prioritizing resources into selected sectors, and promoting related diversification based on core competencies.

According to Dr. Tung, the strategy analyzes the complexity of technology in relation to the strength of local capabilities. This helps determine whether a locality should follow a low-risk path, referred to as an “expressway”, or take a high-risk route, described as a “casino”, which requires more caution.

In a case study applying this model to a hypothetical merger of localities within the Southern Key Economic Zone, Dr. Tung said the initial results revealed that such mergers could create a new “super-region” with greater potential for synergy.

“Though the average level of technological complexity may not increase dramatically, the alignment between technology and the region’s internal capacity improves significantly,” he said. “For example, Ho Chi Minh City’s advanced capabilities can generate spillover effects and drive the development of related industries in neighboring provinces, helping build a stronger, more resilient ecosystem,” The study also identified specific “expressway” strategies for different industries, offering valuable opportunities to build internal strength and advance sustainable development.

Weighing growth strategies

Representing the technology sector, Ms. Nguyen Thu Thao, Director of Public Policy and in charge of Vietnam, Laos, and Cambodia at Meta in Singapore, offered a clear and firm statement on the company’s approach in Vietnam. Rather than pursuing short-term ventures, Meta has chosen to build a sustainable foundation, as demonstrated by its ViGen project, which aims to develop a comprehensive, high-quality Vietnamese language dataset.

“With ViGen, I can confidently say that Meta’s approach to R&D collaboration in Vietnam is about building an expressway, not making high-risk bets,” she emphasized. “Building a house requires long-term investment, time, and patience. It’s not about immediate gains or short-term profit. This is a long-term business strategy.” She also noted that the ViGen dataset will be open-source, available to all stakeholders, from policymakers and researchers to the startup community, with the interests of the Vietnamese people placed at the center.

However, the decision to build an “expressway” raises another critical question: how do we choose the right expressway to invest in, among so many options?

From the perspective of an investor, Mr. Do Ngoc Quynh, Secretary General of the Vietnam Bond Market Association (VBMA), warned that this question presents a major challenge to the ambitious growth goals of both the country and its localities. “How can Ho Chi Minh City record double-digit growth in the years ahead if the economic structure remains unchanged and the budget stays the same?” Mr. Quynh asked. “Without genuine solutions, it will be very difficult to identify what driving forces and key factors can lead to growth.”

There are two approaches to identifying core growth drivers, he continued. “The first is a top-down approach, where a panel of leading experts conducts analysis and makes recommendations,” he explained. “The second is a bottom-up approach, in which the government surveys investment plans from businesses to detect emerging trends and underlying momentum, then simply designs policies to allow enterprises to activate growth themselves.”

Strongly advocating for the bottom-up method, Mr. Navi Radjou, an Indian-born scholar and innovation and leadership advisor based in Silicon Valley, shared international experience underscoring the transformative power of local innovation that is independent of central government directives. “What I have discovered is that localities have incredible innovation capacity, and they are not waiting for central government approval to innovate,” he told the gathering.

New R&D path

As the discussion around growth strategies deepens, it becomes clear that Vietnam’s R&D journey requires not just capital but also creativity in how resources are mobilized and applied. In this context, a compelling alternative emerges from Silicon Valley, where Mr. Radjou advocates for a radically different approach, proposing a unique path for Vietnam’s R&D development. Instead of following the Western “spend more” model, he advocated for a frugal, flexible, and sustainable approach, which he called “Jugaad Innovation”.

Opening his address with heartfelt reflections, Mr. Radjou recalled his journey to Southeast Asia 30 years ago, when he helped countries like Thailand build their science and technology infrastructure. From growing up in poverty in India to over a decade working in Silicon Valley, he distilled a profound philosophy: “Bigger is not necessarily better.”

He pointed to a surprising reality. A landmark 2004 study found no correlation between R&D investment levels and financial performance of companies or the economic performance of countries.

Citing the US pharmaceutical and healthcare industries as an example, he noted that over the past 30 years, R&D spending in pharma increased ten-fold but returns have significantly declined. “In a world of abundance, we tend to spend more but get less,” he said. “So the real question is: in a world of fewer resources, how can we innovate better?”

The answer, he argued, lies in scarcity itself. Citing examples like the Embrace warmer, a low-cost infant incubator for premature babies that costs just $200, or 1 per cent a $20,000 Western model, and India’s Mars mission, which was carried out at a fraction of NASA’s budget, he emphasized that “there are no limits to R&D, even when budgets are tight.”

Drawing on those lessons, Mr. Radjou believes Vietnam has a historic opportunity not just to leapfrog but to become a pioneer in forging a new development path that balances economic, social, and ecological progress.

He proposed a three-pillar model for Vietnam’s next phase of R&D. First, frugality. Instead of constantly inventing from scratch, Vietnam could focus on repurposing and reusing existing technologies - a “circular knowledge economy” - and simplifying product architectures to deliver faster, better, and cheaper solutions, much like Renault did when developing the Kwid model in India.

Second, flexibility. He urged breaking down the barriers between academia and industry through co-location. One example is how French company Saint-Gobain set up an R&D center on the campus of the Indian Institute of Technology (IIT), accelerating the transition from fundamental research to commercial applications.

Third, sustainability. Take R&D labs to nature. Inspired by Brazil’s bio-economy model, where scientists and businesses collaborate to develop products from the Amazon rainforest, he argued that Vietnam, with its rich biodiversity, is well-positioned to become a global leader in this field.