Vietnam is on the cusp of becoming a leading digital economy and technology sector hub, driving economic growth and attracting foreign investment. The country’s strategic location, strong trade agreements, and young, tech-savvy workforce are fueling a surge in electronics manufacturing and innovation.
The Electronics Manufacturing and Innovation Landscape
Global tech giants like Samsung, Intel, LG, and Foxconn have established significant operations in Vietnam, boosting exports and investment inflows. Emerging areas such as semiconductor packaging, batteries, smart appliances, and digital infrastructure are creating new opportunities for growth. Recent investments from Amkor and Intel demonstrate rising confidence in the sector.
Bottlenecks in Vietnam’s Competitiveness
However, to sustain momentum, Vietnam faces challenges in enhancing competitiveness, expanding innovation capabilities, and attracting higher-value, technology-driven foreign direct investment (FDI). Key barriers include a shortage of industry-ready high-tech talent, infrastructure deficits, weak intellectual property (IP) protection, and fragmented regulations.
Addressing Competitiveness Challenges
Vietnam must address these challenges by accelerating reforms in talent development, infrastructure, regulatory consistency, and investor services. Building a more responsive, innovation-friendly environment will be crucial in attracting high-quality FDI and advancing its position in the regional tech ecosystem.
Lessons from ASEAN Peers
Vietnam can draw valuable lessons from ASEAN peers that have built strong digital economies through strategic policies, investor-friendly environments, and innovation-led growth. Singapore, Indonesia, and Malaysia have established themselves as regional tech hubs through:
- Regulatory stability and strong IP protection
- Targeted tax incentives and robust research and development (R&D) investment
- Public-private collaboration and one-stop-shop facilitation models
Implementation Strategies for Vietnam
To translate its 2030 vision into measurable outcomes, Vietnam should shift from vision-setting to implementation by operationalising strategies such as the digital transformation programme and Industry 4.0 strategy. This requires coordinated, sector-specific reforms focused on regulatory streamlining, institutional strengthening, and responsive investor services.
| Priority Area | Description |
| 1. Digital Transformation | Unlocking productivity gains across the diverse economic base through sector-specific digital advancement |
| 2. Regulatory Environment | Building a stable, transparent regulatory environment to attract high-quality digital investment |
| 3. Talent Development | Implementing a national talent development strategy focused on high-tech skills |
| 4. Emerging Global Investment Flows | Seizing emerging global investment flows in key areas like semiconductors, AI, and green tech |
Key Recommendations
Vietnam is invited to consider recommendations focusing on:
- Prioritising sector-specific digital transformation to unlock productivity gains across its diverse economic base
- Building up a stable, transparent regulatory environment to attract high-quality digital investment
- Implementing a national talent development strategy focused on high-tech skills
- Seizing emerging global investment flows in key areas
Adapting to a Changing Global Landscape
Vietnam is poised to capitalize on emerging global investment flows and technological advancements. The country should leverage its competitive advantages and adapt to a changing global landscape by:
Strengthening its innovation ecosystem
* Introducing super tax deductions of up to 200 per cent for R&D in strategic sectors
* Co-investment grants for foreign R&D centres partnered with universities or the National Innovation Centre
* Incentives for tech transfer and local supplier development
Building a highly skilled workforce
* Reforming curricula and strengthening applied training
* Building university-industry links and collaborations with global tech firms
Creating a favorable regulatory environment
* Accelerating the passage of the Law on Digital Technology Industry
* Establishing specialised IP courts
* Strengthening investment promotion agencies through a centralised, one-stop-shop model
Conclusion
Vietnam has the potential to become a leading digital economy and technology sector hub, driving economic growth and attracting foreign investment. By addressing competitiveness challenges, adopting lessons from ASEAN peers, and implementing strategies to strengthen its innovation ecosystem, talent development, and regulatory environment, Vietnam can unlock its full potential and become a major player in the regional tech ecosystem.
