Main pillars for re-inventing growth model

As traditional growth drivers based on natural resources and low-cost labor approach their limits, the Party and the government have identified science, technology, innovation, and digital transformation as decisive factors for national development rather than merely supporting pillars for key industries, under Politburo Resolution No. 57-NQ/TW.

Experience from other countries and Vietnam’s own development show that sustainable growth increasingly depends not on low costs or production expansion but on a nation’s ability to generate knowledge, absorb technology, develop digital infrastructure, and foster innovation. In this context, six breakthrough strategic pillars could help reposition Vietnam’s growth model and provide a practical foundation for accelerated development in the new era.

Pillar 1 Institutional reform

From control to development-oriented governance: Vietnam’s development model will require a fundamental shift in how the State operates. The 14th National Party Congress identified strengthening governance and development facilitation as a core priority, signaling a move away from a system centered on “management and control” toward one focused on governance, service delivery, and measurable outcomes. 

A more agile legal framework: As technologies such as fintech, blockchain, AI, and digital assets evolve rapidly, Vietnam’s legal system must become more flexible and adaptive. Rather than relying on rigid, rules-based regulation, policymakers should adopt principle-based frameworks that can evolve with technological change and create space for innovation.

Closing the implementation gap: Despite a growing number of major policies on science, technology, innovation, and digital transformation, implementation remains uneven. Improving execution capacity and reshaping the mindset of public officials will be essential.

Expanding regulatory sandboxes: Vietnam has introduced initial frameworks, including Resolution No. 05/2025/NQ-CP on crypto asset markets and Decree No. 94/2025/ND-CP on banking sandboxes. Yet implementation remains incomplete across strategic sectors such as AI, blockchain, open data, autonomous robotics, unmanned aerial vehicles (UAVs), fintech, and green finance. 

From ex-ante control to ex-post oversight: Regulatory reform should move away from excessive pre-approval requirements toward post-supervision, while introducing liability protections for objectively risky technology experimentation. Such a shift could encourage businesses and researchers to pursue innovation more aggressively.

Creating specialized innovation zones: Vietnam could pilot dedicated innovation hubs with preferential rules on data, investment, taxation, and emerging technologies. Ho Chi Minh City could position itself as a digital finance and fintech center, Da Nang as a hub for AI and semiconductors, Hanoi for GovTech and public data, and Khanh Hoa province for smart logistics and the marine economy.

Unlocking commercialization of research: Research priorities have shifted from being merely “applicable” to commercially viable. Yet classifying intellectual property generated from publicly-funded science and technology projects as State assets has fueled concerns over capital loss, discouraging commercialization and limiting practical deployment.

Pillar 2 Human capital

Building a strategic technology workforce: Vietnam needs to develop talent in core technologies such as AI, semiconductors, big data, cybersecurity, robotics, biotechnology, and new energy, while improving the quality of engineers and digital workers adapting to automation and AI. This will require a fundamental overhaul of education and training. 

Creating an ecosystem to attract and retain talent: Talent policies should move beyond financial incentives to foster a stronger research and innovation environment. Experts need greater autonomy, access to data and laboratories, and clearer pathways to commercialize research. Vietnam should also develop regional high-tech talent ecosystems based on local strengths while improving living conditions for professionals.

Strengthening university-industry links: Vietnam should expand international partnerships, scholarships, joint laboratories, university spin-offs, and intellectual property-sharing mechanisms to accelerate commercialization. Recent policy directions also envision allowing lecturers and researchers to participate in businesses built from research outcomes.

Pillar 3 Data infrastructure & AI

Building a unified national data platform: Vietnam needs an integrated national digital architecture with standardized data systems, interoperability, digital identity, cybersecurity, and data-sharing mechanisms to address fragmentation and overlapping investments across ministries and localities.

Treating data and computing power as strategic infrastructure: Under the Law on Data 2024 and Resolution No. 03/NQ-CP, priority should be given to national data centers, high-performance computing (HPC) systems, AI centers, and interoperable open-data networks. The Ministry of Public Security could further integrate population databases and expand VNeID into a national digital super platform, while domestic cloud infrastructure and Vietnamese large language models (LLMs) should also be accelerated.

Developing regional data ecosystems: Open-data ecosystems tailored to regional strengths could help drive the digital economy and smarter governance. 

Balancing innovation, digital sovereignty, and data protection: Vietnam could draw lessons from Estonia’s open-data governance, China’s AI expansion, and the EU’s regulatory framework to shape its own approach. Stronger AI capabilities should go hand-in-hand with digital sovereignty and personal data protection, including the potential creation of a national data exchange to stimulate the data economy.

Scaling national AI computing capacity: Building sovereign AI infrastructure will be critical to long-term competitiveness. Tax, credit, and investment incentives should also be expanded for strategic digital technology platforms.

Pillar 4 Strategic technologies

Prioritizing core technologies: Vietnam should focus on strategic technologies such as AI, semiconductors, data infrastructure, cybersecurity, robotics, advanced materials, green technologies, and smart manufacturing. Advancing these sectors will require closer coordination across ministries and agencies.

Aligning sectoral priorities: Under Decision No. 808/QD-TTg, ministries have been assigned distinct mandates: the Ministry of Science and Technology oversees AI, core technologies, and 5G infrastructure; the Ministry of Agriculture and Environment develops biotechnology and agricultural traceability; the Ministry of Industry and Trade advances smart logistics and energy technologies; while healthcare, cybersecurity, UAVs, and AI-based financial supervision are being prioritized by relevant agencies.

Building regional technology clusters: Localities should develop specialized high-tech clusters based on regional strengths. Bac Ninh and Thai Nguyen could deepen electronics and semiconductor supply chains, Da Nang could emerge as an AI and microchip hub, Ho Chi Minh City could focus on green energy and hydrogen, while Lao Cai and Lai Chau provinces could move toward deep processing of rare earth minerals rather than raw exports.

Strengthening domestic technology firms: Vietnam also needs stronger domestic technology champions and more autonomous R&D capacity. 

Pillar 5 Startups, innovation, & co-creation

Building an enterprise-centered innovation ecosystem: Vietnam’s innovation ecosystem should place businesses at the center, with the State acting as an enabler, universities driving research, and enterprises commercializing technology. The National Innovation Center could expand its role as a hub connecting startups, corporations, investors, and universities, while blended public-private venture funds could help share risks.

Linking innovation to regional strengths: Innovation ecosystems should align with local economic priorities and the 20 strategic technology missions outlined in Decision No. 808/QD-TTg. Public procurement should also position the State as the “first customer” for Vietnamese technology products, helping firms scale.

Strengthening the State-university-business nexus: Closer collaboration between government, universities, and businesses will be key to commercializing research and building large-scale technology firms. 

Pillar 6 Dual transition & green growth

Aligning technology with green growth: Science, technology, innovation, and digital transformation should support sustainable development through better resource management, emissions monitoring, energy optimization, and environmental protection. Vietnam should accelerate a “dual transition” model that combines digitalization and decarbonization to boost green productivity and climate resilience.

Applying advanced technologies for sustainability: AI, the Internet of Things (IoT), blockchain, and Earth observation satellites can strengthen environmental monitoring, energy efficiency, and climate adaptation. 

Developing biotechnology and smart healthcare: Biotechnology and smart healthcare should become strategic growth sectors. Priorities include next-generation vaccines, stem-cell and immune-cell therapies, personalized medicine based on genetic data, and 3D-printed medical devices.

Scaling green finance and carbon markets: Carbon markets, green finance, and environmental technologies will be essential to attracting international environmental, social, and governance (ESG) capital and supporting businesses in their green transition. Priority areas include renewable energy, smart grids, and UAV and satellite systems for environmental monitoring, alongside a national green transition fund to support technology upgrades and compliance with global standards.

(*)Professor Nguyen Khac Quoc Bao, Dr. Nguyen Kim Duc, and Dr. To Cong Nguyen Bao, University of Economics Ho Chi Minh City.