Green economy, digital economy – ‘passport’ to help Vietnam accelerate

The Resolution of the XIV Party Congress voted on the afternoon of January 23 determined that in addition to traditional motivations (investment, domestic consumption, export), the new growth model will be based on science, technology and innovation. In particular, the green – digital and circular economy is the focus of the new production method.

Mr. Ho Viet Hai, co-founder and General Director of Alternō, said that the resolution has “turned on the green light” for a green, circular economy, creating momentum to attract investment capital, especially from abroad.

Alternō is a startup providing sand cell solutions for drying agricultural products and providing heat for food processing. They recorded a sharp increase in the number of partners learning about this green solution over the past year. “In 2025 alone, the number of partners learning about our sand batteries will increase by 200% compared to the previous year,” Mr. Hai shared.

Ms. Pham Thi Ngoc Thuy, Director of the Office of the Private Economic Development Research Board (Division IV), commented that Vietnam’s economy is facing a great “opportunity” to make a qualitative leap, thanks to its position as a destination for high-quality capital flows and the flexibility of domestic businesses.

Comparing the digital economy to a “highway” that helps operate processes at high speed, Ms. Thuy believes that the green and circular economy is the “standard filter” for Vietnamese goods to have a “passport” to difficult markets.

“Without any element, the growth machine will be unbalanced and challenged by international technical barriers,” Ms. Thuy said.

The Director of Department IV recognized for the first time that an action program was integrated right at the Party Congress, clearly defining “subjects, roadmaps, and resources” to implement the Resolution. “This is a very strong ‘impulse’ that helps break the stagnant implementation phase that we have been concerned about for a long time,” she said.

The new growth model based on green and digital economy, according to Mr. Samuel Hertz, Asia-Pacific Regional Director of EBC Financial Group, allows Vietnam to take advantage of internal resources combined with external opportunities.

Mr. Samuel Hertz acknowledged that Vietnam is making a landmark transition: changing the driving force of development from resource-intensive, cheap labor to intellectual labor and increasing human value.

Vietnam’s biggest advantage in the new context, according to him, is the “Digital Native” generation – the workforce that masters technology, the consumer market, and the fastest growing middle class in the region.

Opportunities are wide open, but experts say that it is difficult for the economic ship to operate smoothly if it uses “old engines”, in which institutions are still “the bottleneck of all bottlenecks”.

In fact, green transformation requires long-term capital, but businesses still struggle to access it. Mr. Viet Hai said that even though Vietnam has issued the Green Taxonomy, it is still difficult for startups like Alternō to borrow, because of constraints on collateral conditions. “Meanwhile, foreign investors are very responsive to policy signals,” he said.

In this aspect, Ms. Pham Ngoc Thuy said that green transformation does not bring immediate economic effects like digitalization. Therefore, promoting this transformation requires long-term resources and mixed financial mechanisms, including the responsibility and investment of both the public and private sectors.

“Capital is only poured into businesses when regulations on green classification, emission quotas, green credits… are clear and enforceable,” said a representative of Board IV, adding that dismantling institutions is the fastest way to clear the flow of green capital.

On the other hand, according to Mr. Hertz, Vietnam still lacks mandatory regulations on disclosure of ESG (environmental, social, governance) risk information similar to the European Union’s SFDR framework – a tool to help investors avoid the “greenwashing” trap. These are tools to help investors evaluate sustainable risks before making capital investment decisions.

Besides institutions, innovation capacity is also a problem that needs to be solved. Mr. Nguyen Xuan Thanh, public policy lecturer, Fulbright University Vietnam, said that to move towards a high growth model, driven by productivity, innovation needs to be given top priority. However, the economy’s total spending on research and development (R&D) per GDP in Vietnam is still low compared to the region.

According to World Bank data, this index in Vietnam in 2021 is 0.42%, while Japan is 3.28%, South Korea is 4.91% and China is 2.43% of GDP.

“The state needs to identify strong investment in R&D as a strategic goal, but it needs to change the way it is spent,” Mr. Thanh said.

Experts from Fulbright University Vietnam recommend that Vietnam learn “how to spend” from Japan, Korea, and China – invest in science and knowledge systems, through market signals. That is, investing through institutes and schools, but using the private economic sector as a “test”.

“If the private sector is not interested, it is likely that the training program is not an area that the economy needs,” he said.

Mr. Thanh also suggested a similar public-private cooperation mechanism in budget spending for innovation projects, avoiding the situation where “many research projects are finished and then put in a drawer”. That is, instead of fully funding a science and technology project, the State will fund the majority. For the rest, organizations and individuals doing research must mobilize from the business sector to prove the feasibility of the project.

Along with that, the State should also apply a co-sponsorship mechanism, that is, businesses put in one dong and the budget puts in one dong. Efficiency assessment criteria will be implemented by the private sector, similar to countries in the region, to ensure feasibility.

To transition to a new growth model, Experts believe that authorities need to focus resources on “growth poles” or prioritize spreading projects, instead of spreading investment. In particular, the transformation needs to take the change in intelligence in the content of products and services as a measure and the nucleus is the growth of domestic enterprises. “That is the force leading this transformation most sustainably,” Ms. Ngoc Thuy stated.

Ms. Thuy also believes that management agencies need to boldly apply the testing mechanism (Sandbox) and promote substantive decentralization and decentralization. This will help innovation have opportunities everywhere, in every field, instead of the sandbox review mechanism that has been a common license for a long time. “We need an attitude towards new things in the direction of creating and developing instead of banning them if we can’t manage them,” she said.

For businesses pursuing the development of green solutions like Alternō, CEO Ho Viet Hai hopes that the Resolution of the 14th Party Congress with new thinking on growth models, capital will “flow” immediately into production and business, small and medium enterprises, with open conditions.

“The openness of state management agencies is a ‘special infrastructure’ that helps businesses confidently break through,” Director of Department IV Office Pham Ngoc Thuy concluded.