The world is entering a period of profound transformation, driven by the rapid expansion of the digital economy, AI, green transition, and intensifying competition in high technology. These shifts are not only reshaping production methods, governance models, and global value chains, but are also placing urgent pressure on countries to restructure their development strategies to adapt to a changing landscape.

Professor Hoang Van Cuong,  Vice Chairman of the Vietnam Economic Association

After nearly 40 years of “Doi Moi” (Economic Renewal), Vietnam has recorded major achievements in economic growth, improved living standards, and stronger international standing. However, the current development model has also revealed limitations, including growth that remains heavily dependent on investment capital and low-cost labor, relatively weak labor productivity and innovation capacity, limited technological self-reliance, and institutional bottlenecks that continue to constrain progress.

Rethinking development model

Against this backdrop, reforming Vietnam’s national development model is no longer only an economic necessity, but a strategic requirement for the country’s long-term future. In theory, a national development model refers to the overall structure of the economy, society, institutions, and governance capacity used to mobilize and allocate resources toward long-term development goals. Modern development theories suggest that sustainable growth depends on three core pillars: economic development, social development, and effective national governance.

Economic development provides the material foundation for growth, while social and human development serves as both a goal and an internal driver of progress. National governance, meanwhile, determines a country’s ability to organize, coordinate, and safeguard the development process. In the new era, all three pillars must be closely linked to science and technology, innovation, digital transformation, and green transition.

International experience shows that no single development model fits all countries, but successful economies have generally built effective combinations of strong governance, economic progress, and social development. Japan and South Korea succeeded through developmental State models in which governments played a strategic role in industrialization and innovation. Nordic countries stand out for balancing economic growth, social equity, and transparent governance, while Singapore has developed a modern governance system based on data and digital technologies. China, meanwhile, is rapidly shifting toward a high-tech and strategically-autonomous development model.

A common feature of successful models is the decisive role of institutional quality and governance capacity, with science, technology, and innovation acting as central growth drivers and human development serving as the foundation of sustainable progress.

Redefining competitiveness

The world is undergoing deep restructuring across economic, technological, and geopolitical dimensions. Strategic competition among major powers is no longer limited to trade, but increasingly extends to technology, data, AI, semiconductors, and supply chains. At the same time, green standards, carbon-emission requirements, and environmental, social, and governance (ESG) expectations are emerging as new barriers in global trade and investment.

Industry 4.0 is also fundamentally reshaping growth models. Data, digital technologies, and AI are becoming new productive forces, transforming labor markets, governance systems, and national competitiveness. Countries that fail to adapt risk falling behind and becoming increasingly dependent on foreign technologies.

For Vietnam, reforming the national development model must begin with modernizing governance toward a digitally-enabled developmental State. The government needs to move beyond traditional administrative management toward modern governance based on data, technology, and accountability. In the digital era, data should be treated as a strategic resource and soft infrastructure for the economy.

At the same time, Vietnam must continue strengthening a transparent and effective rule-of-law State that encourages innovation, while promoting decentralization alongside stronger checks and balances. Policymaking capacity must also improve to better anticipate and adapt to a rapidly-changing environment.

An especially important requirement is strengthening national strategic autonomy. Amid intensifying competition in global technology, autonomy does not mean isolation or self-sufficiency but rather the ability to preserve strategic choices and reduce dependence on external technologies, data, or supply chains. Developing domestic capabilities in AI, semiconductors, cybersecurity, new energy, and data infrastructure should therefore be treated as part of Vietnam’s broader national development strategy.

Shifting toward new engines

On the economic front, Vietnam needs to move decisively away from a growth model reliant on investment capital, low-cost labor, and natural resource extraction toward one driven by productivity, science and technology, and innovation.

This transition requires continued improvement of Vietnam’s socialist-oriented market economy institutions, ensuring that markets play the decisive role in allocating resources, while the government focuses on strategic regulation and development facilitation. Land, capital, labor, science and technology, and data markets also need to become more transparent, modern, and integrated.

The private sector must genuinely become a key engine of innovation, while FDI policy should shift from attracting low-cost capital toward securing high technology and stronger links with domestic businesses.

Vietnam must also accelerate digital transformation, strengthen its national innovation ecosystem, and identify strategic technology sectors capable of generating long-term competitiveness. Green transition should be viewed not as a burden, but as an opportunity to restructure the growth model through renewable energy, clean industries, circular economy practices, and low-carbon agriculture.

Putting people first

At the social level, reforming the development model must place people at the center. Education should evolve from knowledge transmission toward fostering creativity, critical thinking, and digital skills. The healthcare system should prioritize preventive care, primary healthcare, and digital health services. Social welfare policies also need to become more flexible and inclusive in response to emerging risks associated with the digital economy and digital society.

Importantly, in the context of rapid digital transformation, social equity should not only concern income distribution, but also equal access to data, digital skills, and online public services. Likewise, green transition must be implemented fairly, ensuring vulnerable groups do not bear a disproportionate share of adjustment costs.

Ultimately, reforming Vietnam’s national development model in the new era is not simply about adjusting the economic growth model. It requires a comprehensive restructuring of the country’s development approach across three interconnected pillars: national governance, economic development, and social development. This will be critical for strengthening competitiveness, avoiding the middle-income trap, reducing the risk of falling behind, and achieving Vietnam’s ambition of becoming a high-income developed country by the middle of the 21st century.