Vietnam’s fascinating economic growth since the mid-eighties, its young population (60% is under 35 years old), political stability and unique geographic position as gateway to Chinese and South East Asian markets have made the country an attractive investment destination and an interesting domestic market of 92 million people. Its hi-tech sector followed the economic growth of the country and nowadays many well-known hi-tech companies do have a presence in Vietnam. Nevertheless, Vietnam’s own hi-tech R&D is still at a nascent stage in several sectors.
The Vietnamese Government is aware of the need to change its current economic model of low labor costs, natural resources, FDI and export to a new model of added value, quality and sustainable growth. Therefore, the development of its hi-tech sector has been put high on the Government agenda. This provides interesting business opportunities for Western hi-tech companies due to the incentives provided (such as major tax reductions, funding and exemption from land rent) in combination with the general advantages of the Vietnamese market (low labor costs, strategic location, increasing domestic purchase power, etc.). Further global and regional integration will add to the attractiveness of Vietnam, in particular a single ASEAN market (AEC) and a Free Trade Agreement (FTA) with the EU, which is currently being negotiated.
However, there are also a number of challenges to be addressed. Two major obstacles are the strict requirements for hi-tech projects to become eligible for government incentives and the poor human resources available. Furthermore, several other general barriers, such as poor infrastructure, bad IPR protection and software piracy, as well as sector specific barriers apply.
The report focuses on a number of specific hi-tech areas in Vietnam such as ICT, nano-technology and biotechnology, which are being applied in a wide variety of other sectors, including key sectors for foreign entrepreneurs in Vietnam. These sectors include agriculture, maritime and chemical industries, transportation & logistics, water and energy, etc.