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Vietnam 2035: Comprehensive Innovation Starting From Institutional Arrangement
Updated: 5/5/2015 2:46:03 PM GMT + 7
Institution is a fundamental element, a driving force for economic development, social inclusion, science and technology development and innovation in Vietnam in the next 20 years.

In the 3-day consultation workshop in Aprl 2015, World Bank and Vietnamese experts discussed three topics of "Vietnam 2035 Vision: Aspirations and Goals”, "Social Inclusion” and "Innovation: Driving Forces and Resources for Rapid and Sustainable Development”. These are some key topics covered in the Vietnam 2035 report, which is jointly being prepared by the Government of Vietnam and the World Bank. The workshop was chaired by Mr. Nguyen Viet Sinh, former Vice Minister of Planning and Investment, and Ms. Victoria Kwakwa, World Bank Country Director for Vietnam.

How can Vietnam join the 20 largest economies by 2035?

Vietnam 2035 report authors emphasized that Vietnam’s economic development needs to be based on knowledge, and natural resource management and environment protection. The team proposed that Vietnam aspirations to 2035 should be "innovation, prosperity, and sustainability”.

The overarching idea of the report is "an innovative society is first and foremost a democratic one”, which means citizens have equal access to opportunities, can easily start a business, have their voice heard and are entitled to social monitoring. In order to do so, it is necessary to establish social institutions with the rule of law. This should ensure strong national potential, and might help Vietnam move forward to join the world’s 20 largest economics in the next 20 years. 

"We should consider whether the higher GDP per capita the better, or should we move towards a society that is happy and worth living,” said Ms. Kwakwa.

 Experts that further discussion on many urgent issues is needed, such as climate change, population aging, intellectual property rights, development of civil societies, enhancement of global competitiveness ranking, gender equality and equality for minorities.

 Social inclusion: Focus on the disadvantaged

 Mr Dang Nguyen Anh, Director of Vietnam Sociology Institute concluded that inequality gap is widening in Vietnam, in particular regarding disadvantaged groups (ethnic minorities, the disabled and migrants). According to him, education is the key to address social inequality.

Several policy recommendations that align to specific target groups for the purpose of social inclusion were made:

-For ethnic minorities: universalization of secondary education, use of ethnic minority languages in teaching, and improvement of education quality; 

-For the disabled and the elderly: sustainable insurance system, amendment of pension regime, pension support/subsidy for the informal sector, expansion of health insurance coverage, moving away from the focus on hospital-based care to primary care, or family doctor model;

-For migrant workers: ensuring their voice is heard, improving the efficiency and effectiveness of agencies that represent employee and employers’ interest.

Ms. Kwakwa emphasized that for ethnic minorities, the focus should be on young people, as in the next 20 years they would be the ones changing the destiny of their home country. Simultaneously, attention should be paid to urban youth unemployment, which is getting more and more serious in Vietnam as well as in other countries in the world.

More pressure for innovation is needed

In the past few decades, the impressive economic achievements of Vietnam have been based primarily on investment capital and labor. In the coming years, economic development will increasingly need to rely on labor productivity. The most important driving force is innovation, in particular innovation led by technology.

"Innovation policies do not work by themselves but must be strongly linked to industrial production policies socio-economic development and align with specific phase of development”, said Mr. Le Dinh Tien, former Vice Minister of Science and Technology.

Economist Pham Chi Lan said that Vietnam have been relying on a processing economy with the advantage of cheap labor for so many years. As such, there is no impetus for innovation. Almost all large enterprises make their profit through land and natural resources, without value-added technological development. Vietnam policies to date have not encouraged innovation among businesses, but provided impetus for enterprises to request for land use and large project implementation.

Another remarkable issue is the gaps in pro-innovation policies, which lack the incentives for science and technology development among businesses, and which focus mainly on training and research entities. Weak linkages among universities, research institutes and businesses make it difficult for innovations to go into practice. Furthermore, the current financial mechanism create barriers, or even distort the impetus for scientific research.

Several solutions to promote science and technology research and innovation in Vietnam in the next 20 years have been recommended by the authors as well as experts at the workshop.

 -Re-define the regulatory role of the state, let market mechanism operate by itself,

 - Create pressure for innovation among universities, research institutes and enterprises, reduce the state’s placing orders with research institutes and let them compete in the market.

 - Build up the National Innovation System, in which enterprises should be the focus, with multi-dimensional linkages with universities and research institutes.

-The state needs to provide a protection fund for innovation and strengthen enforcement of intellectual property rights.

 - Adjust the financial mechanism for enterprises which does not differentiate among state owned enterprises and private ones. All firms should be encouraged in product research and development.

 -Develop a master plan for national human resource development in line with market demand. Based on that, education entities should maintain their autonomy regarding training strategy and management. It is expected that Vietnamese universities will be listed among the best 500 universities in the word. In order to do so, higher education entities should have full autonomy, Research fund for universities should be provided based on outputs.

Communication team – Vietnam 2035 report

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