Vietnam considers innovation the center for growth, foundation for FDI attraction

Vietnam has pursued a consistent policy of making innovation the center of its growth strategy. This has been an advantage for Vietnam to attract foreign direct investment (FDI). But amid global economic instability, with 97% of domestic businesses being small and medium-sized enterprises, Vietnam is boosting innovation and looking for innovative ways to attract qualified FDI flows.

Car frame welding line at Toyota Motor Vietnam invested by Japan in Vinh Phuc province. (Photo: VNA)

In 2021, Vietnam’s innovative startups mobilized 1.4 billion USD in investment capital. Economists predict that Vietnam will continue to attract international investors as one of the three pillars of the “golden triangle of startups” in Southeast Asia.

That is an advantage for Vietnam's development. Investors are interested in Vietnam because of its strong economic growth rate, its young, skilled work force, and its huge service market.

But the business community, especially startup businesses, are in a difficult period due to high inflation and disruption of the global supply chain due to the conflict between Russia and Ukraine.

Economists believe investors will still invest in innovative businesses because of long-term trust and opportunities for breakthroughs during this difficult period while many investors may focus on emerging industries.

To seize these opportunities, Vietnamese startups are promoting innovative ideas and initiatives to lure foreign capital.

Bui Tien Dung, a representative of the BenKon Company, a startup pushing a solution called the BenKon Managing and Optimizing ACs system, said, “As 90% of startups fail in their first 3 to 5 years, we’re prepared to accept the risk.”

Within the Toyota production system, for example said Dung, there is a business philosophy called Kaizen, an approach to creating continuous improvement based on the idea that small, ongoing positive changes can reap significant improvements.

“That's why the startup community follows, accepts failure, and is ready for competition. We have a desire for innovation and a desire to improve technology. What we are lacking is the support of community. We hope that large corporations will welcome us not as fledgling solutions, but as solution providers with a new, more creative outlook,” Dung noted.

According to Doctor Professor Nguyen Duc Khuong, Chairman of the Paris-based Association of Vietnamese Scientists and Experts (AVSE Global), with high growth rates in recent years, Vietnam is considered one of the world’s most dynamic economies.

Vietnam's attractiveness is also due to the Government’s determination to make innovation a focus of its growth strategy which has motivated international investors to expand investment in Vietnam.

Vietnam needs to pay attention to three major issues, said Doctor Professor Khuong.

“We are facing many difficulties which require creative thinking and innovative technological solutions. We want to find technologies to create breakthroughs. First, there must be policies. Second, the innovators themselves and the owners of innovative businesses must do their best to overcome difficulties and find ways to connect with other entities both domestically and abroad,” said Khuong.

Minister of Planning and Investment Nguyen Chi Dung (Photo: baodautu.vn)

The Government and the Prime Minister have directed ministries, sectors, and localities to implement solutions to remove difficulties, promote growth, maintain macroeconomic stability, and support businesses and workers affected by COVID-19.

The Ministry of Planning and Investment has proposed solutions and support programs, including a program to support businesses in digital transformation and help more than 100,000 Vietnamese businesses with digital transformation tools and solutions, and a program to support innovative startups, to train and develop talents, and build a Vietnam Innovation Network.

Minister of Planning and Investment Nguyen Chi Dung said that Vietnam is accelerating economic restructuring, transforming the growth model towards improving productivity, quality, efficiency, and competitiveness based on science and technology, innovation, and digital transformation, and promoting human resources.

“To make innovation truly effective and practical, in addition to the direction of the Party and State, the coordination of ministries, agencies, and localities, and the engagement of businesses and the entire society will be needed,” according to Minister Dung.

Amid global economic fluctuations, Vietnam considers promoting innovation the focus of the economy while ensuring macro-economic stability and major economic balances. The government is increasing support for the business community to strengthen innovation and promote initiatives to address economic issues in the country as well as attract more foreign investment.

Source: vovworld.vn