Vietnam needs to foster innovation to sustain growth, report says

Vietnam has to rely more on productivity gains driven by innovation in order to boost its economy as labour and capital-intensive growth is reaching its limit, says a new report by the World Bank and the Organisation of Economic Co-operation and Development (OECD).

Innovation can help Vietnam avoid falling into the middle income trap.

The Review of Science, Technology and Innovation in Vietnam looks at the key elements, relationships and dynamics that drive Vietnam's innovation system and opportunities to enhance it through government policy.

Victoria Kwakwa, World Bank Country Director for Vietnam, said increased competition in globalising markets mean that it is more important than ever to invest in early advanced technological capabilities, which will help Vietnamese enterprises better position themselves in global value chains.

The report notes that Vietnam's innovation system is in a nascent and fragmented state. Despite having a record of scientific research, there is still a lot of room for improvement in research and development in both the public and private sectors.

According to Andrew Wyckoff, Director for Science, Technology and Innovation (STI) at the OECD, Vietnam needs to considerably improve its innovation capabilities if it wants to avoid falling into the middle income trap.

Professor Gang Zhang at the OECD said Vietnam has a good basic education performance, a sizable workforce and attractiveness for investment by international enterprises, among its strengths for STI development.

But he added that the country is suffering from many weaknesses such as low productivity, inadequate infrastructure, limited access to financing for enterprises, and little research and development capacity in the business sector.

The report recommends that Vietnamese policymakers improve the framework of conditions for innovation and public governance of the innovation system while strengthening the human resources base.

It also advises that Vietnam foster innovation in the business sector and increase the contributions of public research organisations and universities.

(Source: nhandan.org.vn)