‘Vietnam needs to transition to an economy powered by technology’

The information was said by Mr. Nguyen Thanh Nghi, Head of the Central Policy and Strategy Committee, at the National Scientific Conference with the theme “Innovating the country’s development model based on science, technology, innovation and digital transformation”, held on May 26, in Hai Phong. The conference took place in the context that Vietnam is developing the Project “Innovating the country’s development model based on science, technology, innovation and digital transformation” to submit to the Central Executive Committee.

According to Mr. Nghi, after nearly 40 years of innovation, Vietnam’s development model has helped the economy transform strongly. From an underdeveloped country, Vietnam currently has a GDP size ranked 32nd in the world by 2025, and is in the group of 15 countries with the largest trade scale globally. However, the current growth model is revealing many limitations as it still depends heavily on capital, labor and resource exploitation; productivity, quality and competitiveness are not high; The capacity to innovate and master technology is still limited.

According to Mr. Nghi, in the context of artificial intelligence, big data, cloud computing and the Internet of Things developing strongly, science and technology, innovation and digital transformation are no longer just pure economic growth drivers, but have become the foundation of national competitiveness, strategic autonomy and development security. “This is not only an objective requirement, but also a strategic choice that is decisive for the country’s future development,” he said.

Citing the views of General Secretary and President To Lam, Mr. Nghi said the country is facing a historic opportunity to enter “an era of national advancement”, requiring a fundamental innovation in the development model, using knowledge, technology, data and Vietnamese people as the foundation.

Stating that it is urgent to establish a new development model with its own identity and people-centered, Prof. Dr. Nguyen Xuan Thang, Chairman of the Central Theoretical Council, noted that the models of growth, development and socialism in Vietnam need to be approached as three concentric circles. Therefore, innovating the development model does not stop at economics, but is an overall innovation in development thinking, leadership methods, national governance and ways of allocating resources.

According to Mr. Thang, the new growth model not only answers the question of how to grow, but also must solve the problem of what growth is for, for whom and according to what value system. “The ultimate goal of development is not only GDP or growth rate, but also people’s quality of life, happiness level and development opportunities,” he said.

From an international perspective, Ms. Francesca Nardini, UNDP Deputy Resident Representative in Vietnam, commented that Vietnam has achieved “unprecedented” development achievements over the past three decades while maintaining high growth while lifting millions of people out of poverty. However, “Vietnam must enter a new phase of transformation, bringing the economy to a higher level of development,” she said.

UNDP representatives pointed out the “missing middle” phenomenon, a serious shortage of medium-sized businesses capable of leading growth. The small, medium-sized (SME) and micro enterprises currently account for 96-97% of the total number of businesses but face major resource constraints.

Citing the World Bank’s 2025 survey results, Ms. Nardini said the level of technology application between the FDI sector and domestic enterprises is still a large gap. While pioneering corporations such as FPT, Viettel, and Vingroup are doing a good job of bringing AI and new technology to the market, SMEs do not have enough absorption capacity to diffuse it throughout the economy.

Another major barrier is the gap in research and development (R&D). Although Vietnam has a strong vision, the level of investment in R&D has not yet reached 1% of GDP, much lower than regional countries such as Thailand, Malaysia, China and Korea. The goal of raising this rate to 2% of GDP is a necessary direction, but she believes that it is necessary to invest strategically and avoid spreading out.

To transform innovative ideas into actual productivity, UNDP representatives proposed three key groups of solutions for Vietnam. Specifically: Enhance domestic capacity by focusing on strongly supporting the SME sector in applying technology; Strengthen connections between domestic enterprises and the FDI sector to participate more deeply in the global value chain.

The second solution is technology commercialization, aiming to narrow the gap between research and the market; strengthen the intellectual property system; Enhance the role of universities and build a synchronized financial mechanism.

In the third group, Ms. Francesca Nardini noted ensuring the fundamental infrastructure, with a focus on modernizing the power grid according to Resolution 70. The reason is that high-tech industries such as semiconductors and pharmaceuticals require stable energy sources, which cannot allow interruptions.

According to Ms. Francesca Nardini, in the journey to a higher level of development, the ultimate goal is not just pure economic growth but must be the welfare, safety and quality of life of the people. That must be the “North Star” that guides the entire process of innovating Vietnam’s development model.