Vietnam has set an ambitious goal of becoming a developed, high-income country by 2045. Making science, technology, and innovation identified the main drivers of growth in its 13th National Congress (2021). However, this vision requires more than technological advancement. It needs to be supported by institutional reform, skilled human capital, and a strong industrial base. Policymakers are urged to avoid an overdependence on technology without strengthening the country’s institutional and implementation capacities.
Growing digital economy
Vietnam’s digital transformation has gained remarkable momentum, though it presents a mixed picture. The World Intellectual Property Organization (WIPO) ranked Vietnam 44th out of 133 countries in its 2024 Global Innovation Index, recognizing its strong potential. Yet, investment in R&D remains low, at only 0.43% of GDP, lagging behind regional innovation leaders.
Despite limited foundational investment, Vietnam’s digital sector has surged. The sector generated about US$158 billion in 2024 from over 73,000 technology firms, including $11.5 billion from foreign markets. Hardware and electronics exports reached $133.2 billion, reflecting the country’s gradual move from assembly and outsourcing to self-design and core technology development.
This transition has contributed significantly to Vietnam’s macroeconomic performance. The digital economy accounted for 18.3% of GDP in 2024. Vietnam has been expanding at an annual rate above 20%, the fastest in Southeast Asia. As one of the world’s ten fastest-growing e-commerce markets, Vietnam’s digital transformation is increasingly central to its national growth strategy.
Concerning limitations
Despite impressive progress, Vietnam’s technology sector remains constrained by deep structural weaknesses. The country’s role in the global technology value chain is still dominated by assembly, with limited domestic value-added. In 2024, the electrical and electronic sector exported $126.5 billion. Yet, local firms contributed minimally to design, innovation, or intellectual property ownership.
These shortcomings highlight the urgent need for institutional reform, greater R&D investment, and stronger local participation in higher-value stages of production. Without these, Vietnam risks remaining an assembly hub rather than evolving into a creator of advanced technologies capable of sustaining its development ambitions.
Reference
Hanh, N. (2025, October 22). To become a dragon, Vietnam can’t afford to idolize tech. Asia Times. https://asiatimes.com/2025/10/to-become-a-dragon-vietnam-cant-afford-to-idolize-tech/