‘If we don’t change the financial mechanism for science, Vietnam will fall behind’

At the conference “New era, the era of advancement of the Vietnamese people – theoretical and practical issues” held recently, former Minister of Science and Technology Nguyen Quan gave a presentation “mechanism Finance – the bottleneck of bottlenecks in scientific and technological development”.

According to Mr. Quan, the three main bottlenecks in Vietnamese science and technology are financial mechanisms, investment methods and staff employment policies; In which, the financial mechanism is also the bottleneck of the bottleneck.

“Until the financial mechanism for science and technology is truly innovated in accordance with the market economy and international practices, Vietnamese science and technology will not be able to escape the difficult situation and will face the risk of falling behind and not being able to successfully implement the digital transformation revolution as directed by General Secretary To Lam,” the former Minister affirmed.

According to him, the qualifications of Vietnamese scientific staff can completely meet the requirements of the digital technology era – the era of the nation’s advancement if it arouses their aspirations and creates the most favorable conditions for them to research and develop. trust and give them the highest autonomy to innovate. Science and technology are the most important factors for the rapid and sustainable development of every country. If we do not pay attention to the development of science and technology and utilize human resources in this industry, “we will certainly not avoid the risk of falling behind”.

The former Minister said that inappropriate financial mechanisms are hindering development and reducing the effectiveness of investment in science and technology, discouraging scientists, brain drain to the private sector and go abroad. This greatly affects socio-economic development in the digital era. If the financial mechanism is innovated, other bottlenecks such as investment methods, staff employment policies… will be removed when relevant legal regulations are synchronized.

8 problems with financial mechanisms

According to former Minister Nguyen Quan, the mechanism for allocating state budget funding for scientific research and technological development (R&D) is a major policy bottleneck.

In recent years, funding from the state budget for science and technology topics and projects has been carried out according to regulations such as investment in capital construction, and must follow the plan of the fiscal year. The competent authority approves all annual science and technology tasks in terms of content, products and funding, compiles a list of projects into the Government’s budget estimates, and submits them to the National Assembly for approval. passed and the Prime Minister delivered the estimate at the beginning of the following year.

This approach leads to scientists having to wait many years from the time they propose a topic until receiving funding. Any new topics that arise will not be funded because they are not on the compiled list. prior. Price fluctuations, inflation, and political and social fluctuations make it difficult to shop, bid, and meet current needs. Many projects will not be implemented or will not fully implement the goals and products as expected, the schedule will have to be extended many times, and the efficiency will be low.

Meanwhile, the fund mechanism is applied by all developed countries to support and finance scientific research and technological development when using the budget. This fund operates according to the “money is always arranged waiting for topic” mechanism, meaning research funds are allocated and assigned to science and technology funds right from the beginning of the fiscal year without the need for tasks to be approved in advance. . The fund mechanism allows automatic transfer of funds. If the previous year’s funds are not fully used, they will automatically transfer to the next year. The Fund also allows one-time settlement upon acceptance and liquidation of the research contract.

The Ministry of Science and Technology has piloted the fund mechanism since 2008, when the National Foundation for Science and Technology Development (NAFOSTED) was established under a Government decree. After that, regulations on the financial mechanism of the Science and Technology Development Fund were included in the Law on Science and Technology in 2013. However, over the past 10 years, the fund mechanism has not been applied by the State Budget law. and the instructions have not changed.

“It’s time for us to apply international practices for research funding,” Mr. Quan said, explaining that not implementing the fund mechanism leads to very ineffective use of state budget for R&D. short. Approved science and technology tasks must wait 1-2 years before contracts are signed and funding is allocated, disbursement progress is slow. This has caused research activities over the years to produce no outstanding products of international level, reducing the competitiveness of the economy.

In addition to liberating scientists and making research activities more effective, the former Minister said that another very important factor is mobilize social investment for science and technology.

The Law on Corporate Income Tax stipulates that businesses are allowed to deduct a maximum of 10% of their annual taxable income to establish their science and technology development fund. However, the law does not require and limit the ceiling to 10% of taxable income. Therefore, for more than 10 years, businesses almost refused to set up funds. Only a few state-owned enterprises can do this, but there are places that set up funds that cannot be used.

Although more than 20 provinces and one ministry have established science and technology development funds after the 2013 Law on Science and Technology was promulgated, the activities of these funds are still limited. The fund’s capital source is regulated as “only an initial one-time grant from the state budget, annual additional capital from budget allocation for science and technology tasks at ministerial and provincial levels and the results of the fund’s operations, business contributions..

Therefore, Mr. Quan proposed the organization and operation model of the fund in the direction that the Science and Technology Development Fund is a public service unit of the State, a funding fund for R&D activities, announced by the state budget. Arrange and supplement capital according to annual estimates. In addition, it is necessary to regulate methods and procedures for transferring unused or underused funds from science and technology development funds of enterprises in the area to funds of ministries, branches and localities.

“Only then can we mobilize social and business investment for science and technology development like developed countries, have enough financial resources for the fourth industrial revolution and converting national numbers”, Mr. Quan commented.

The former Minister also proposed construction Venture capital fund for science and technology. Developed countries also have venture capital funds for science and technology, mobilizing capital very effectively. However, Vietnam rarely mentions this fund because official documents almost avoid mentioning it.

He suggested that the State Budget Law and other tax laws need to soon complete regulations on Venture Capital Funds to mobilize capital for science and technology and startups. The mechanism of paying for the final product with science and technology topics and projects is also a prominent issue, because the time to prepare payment documents is more than the time to research the topic.

Citing international practices, Mr. Quan said that management agencies need to trust and create conditions for scientists and change management thinking towards accepting risks in research and sharing failures with workers. science to create a fulcrum for them to feel secure in accepting tasks, especially tasks ordered by the State.

In developed countries, although the state funds research, once accepted, the product is automatically owned by the scientist. They have full rights to use research results when transferring or contributing capital to the business. “If we also apply this mechanism, then surely the number of topics left in the drawer will be greatly reduced,” Mr. Quan said.

The costing of the final product for scientific and professional topics and projects also needs to be resolved. This is a prominent problem in carrying out scientific and technological tasks because there is a situation where “the time spent preparing payment documents is more than the time spent researching the topic”. Mr. Quan said that if the budget is not allocated, the person working on the project cannot proactively use it effectively and must worry about dealing with invoices, documents, adjusting expenditure content, extending implementation time, and making adjustments. product criteria, even unable to complete tasks as committed.

Experience in developed countries shows that even though the state funds research, once it is accepted and evaluated, it is automatically stipulated that it is the property of the scientist, and they have full rights to use the results. Do your research when transferring to a business or contributing capital to a business.

According to Mr. Quan, if you truly believe in the team of scientists and apply the viewpoint that “science and technology are the top national policies”, as well as wish for science and technology to have products that meet the needs To develop the country in the period of “rising the nation”, “there should be special preferential regimes for some subjects and solutions to do so.

“It is time to have proper awareness of management agencies and harmonization of laws related to autonomy mechanisms, reflected in laws on state budget, land, taxes, and asset management.” public sector, intellectual property and civil servant law,” said the former Minister of Science and Technology.