Vietnam’s science and technology sector has made remarkable strides forward in recent years, but the commercialization of research results from domestic universities and institutes has been tardy and remains modest. Experts believe stronger collaboration and connectivity are needed to help local innovations reach wider markets.

According to data presented at the recent regular Trade Promotion Conference with Vietnam’s overseas trade offices, held on July 31 by the Vietnam Trade Promotion Agency at the Ministry of Industry and Trade (MoIT) and with the theme “Promoting Trade and Developing Markets for Science and Technology Products”, the innovation ecosystem has been taking shape and growing rapidly, with more than 3,800 technology startups, 74,000 enterprises in the information technology (IT) sector, and a workforce of over 1.2 million highly-skilled workers.

Around the country, over 140 universities, research institutes, and startup support organizations, from incubators to innovation centers and clubs, form a vital network driving the technology startup scene. Several sectors have witnessed the dynamic rise of innovative ventures, particularly in edtech, fintech, tourism, and real estate.

Gaining interest

Mr. Do Tien Thinh, Deputy Director of the National Innovation Center (NIC) at the Ministry of Finance, said Vietnam is currently one of the most attractive destinations for international investors. A key factor behind this appeal is the country’s impressive climb in the Global Innovation Index (GII), which has improved steadily in recent years and now stands at 44th out of 133 economies worldwide. Vietnam is also one of only three countries that have consistently outperformed their level of development in the innovation startup environment for 13 consecutive years; a strong signal in attracting foreign investment.

Vietnam led the world last year in three innovation indicators: high-tech imports, high-tech exports, and exports of innovative goods. The country’s innovation ecosystem also rose in the global rankings, placing 56th in the Global Startup Ecosystem Index. Hanoi, central Da Nang city, and Ho Chi Minh City all remained among the world’s leading startup hubs. Investment in innovative startups has also been on the rise, at times approaching $2 billion a year.

From the business side, Ms. Nguyen Thi Thu Giang, Deputy Chairwoman and General Secretary of the Vietnam Software and IT Services Association (VINASA), noted that the IT sector has expanded rapidly over the past 10-15 years. According to figures from the Ministry of Information and Communications (now part of the Ministry of Science and Technology), industry revenue reached $142 billion in 2023 and around $152 billion in 2024. This includes hardware, software, and all electronic component segments, with foreign-invested enterprises (FIEs) contributing a significant share.

In the domestic software sector alone, 2024 revenue reached about $13 billion, with roughly $7 billion coming from exports. Several software and service exporters are posting strong growth. For example, in December 2023, FPT Software surpassed $1 billion in revenue, and by December 2024 the figure had climbed to $1.7 billion. According to Ms. Giang, the international market in this sector holds enormous growth potential and remains far from saturated.

Bridging the science-to-market gap

Mr. Tran Minh, Deputy Director of the Department of Innovation, Green Transformation, and Industrial Promotion at MoIT, said Vietnam’s science and technology market has made notable progress in recent years. Among its standout achievements is a more complete legal and policy framework, creating a better environment for technology transfer, intellectual property protection, and the commercialization of research results.

Supply from universities and research institutes has increased sharply, while demand from businesses and their ability to absorb and master technology have also improved. The country now has more than 800 intermediary organizations, including 20 provincial technology exchanges and two at the regional level.

But behind these gains lies a stark imbalance. Between 2018 and 2023, a striking 85 per cent of technology transfer contract value came from abroad into Vietnam - mostly within FIEs - while just two contracts saw technology transferred from Vietnam to other countries. This reality has cemented Vietnam’s position as a “buyer’s market” and underlines how little domestic research is being commercialized.

According to Mr. Minh, the root of the problem is a lack of connection and trust between local technology suppliers, including universities and research institutes, and domestic businesses. Many Vietnamese companies have limited capacity to absorb technology, lack confidence in local research, and tend to favor turnkey foreign solutions. Meanwhile, research at universities and institutes often remains overly academic and detached from market needs, with little expertise in commercialization, creating a “valley of death” between research and application. The shortage of strong, professional intermediary organizations only widens the gap.

To fix this, he called for a shift in mindset and the creation of a multi-layered network of collaboration. This means going beyond policy-making to build the capacity of enterprises to absorb technology, fostering confidence in homegrown research, and professionalizing intermediary organizations. The spin-off model, creating new businesses from existing institutions, introduced in National Assembly Resolution No. 193/2025/QH15, dated February 19, 2025, on the pilot implementation of special policies to create breakthroughs in national digital transformation, is one key step towards connecting scientists directly with the market.

“Even with 22 technology exchanges, Vietnam’s industrial property commercialization rate is dismally low,” Mr. Minh emphasized. “Globally, about 5 per cent of patents are commercialized, while in developed countries it can reach 10 per cent. In Vietnam, meanwhile, it’s just 0.1 per cent, or one-fiftieth of the global average. IP is still treated as a formality here, not as a strategic asset.”

The science and technology market also grapples with a host of other challenges, such as weak links between government, academia, and business; under-resourced technology exchanges; a workforce that doesn’t yet meet industry needs; a small market size; limited commercial viability of domestic tech products; and the generally low technology absorption capacity of local enterprises.

Driving tech commercialization

Building on these challenges, Mr. Minh stressed that the immediate priority is to fast-track the guidance and rollout of new policy mechanisms introduced in Politburo Resolution No. 57-NQ/TW on breakthroughs in science and technology development, innovation, and digital transformation, Government Resolution No. 71/NQ-CP, which aims to transform Vietnam into a developed, high-income country by 2045, National Assembly Resolution 193, and the newly-amended Law on Science, Technology, and Innovation. Equally important, he said, is strengthening the “triple helix” model - closer collaboration between the State, academia, and business in science, technology, and innovation.

“The science and technology market will only thrive when supply - universities and research institutes - and demand - enterprises - are closely linked,” he explained. “Strengthening the role of technology transfer intermediaries and building the capacity of businesses to absorb technology will go a long way towards closing today’s gaps.” He also underlined the pivotal role of Vietnam’s overseas trade offices, calling for them to be fully empowered to drive commercialization and market development.

These trade offices, he continued, can actively connect with foreign research institutes, universities, and technology corporations offering solutions that align with Vietnam’s growth priorities, especially emerging, high-tech, core, and strategic technologies, along with innovative solutions. They can also help Vietnamese enterprises send science and technology products to global markets by providing market intelligence, advising on standards and import regulations, supporting marketing and trade promotion, and linking them with partners and distributors for promising “Made in Vietnam” exports. Beyond that, trade offices can be a vital bridge for joint R&D projects, technology know-how transfers, and boosting innovation capacity through partnerships between Vietnamese and foreign institutions.

Mr. Do Ngoc Hung, Trade Counselor at the Vietnam Trade Office in the US, noted a rising interest from American companies and importers in Vietnam’s electrical and electronic goods, semiconductor components, industrial equipment, and software solutions. This, he said, makes it crucial to deepen technology ties between the two countries, particularly in electric vehicles, software, electronics, semiconductors, AI, and environmental technology. He added that the government should continue to back major Vietnamese enterprises and associations such as FPT, Viettel, and VASI in expanding their footprint in the US - whether through branches, research centers, or distribution networks - and in importing advanced US semiconductor equipment.