Education a major cog for semiconductor advances

The government last week approved a scheme on developing a system of excellent training centres and talent for Industry 4.0 before 2030. This will contribute to realising the country’s plan to produce 50,000-100,000 high-skilled workers for semiconductors over the next five years.

The scheme aims to establish at least one or two networks of centres of this type. Particularly in the sectors of AI, semiconductors, and biotechnology, at least 2-3 networks in the country’s three main regions will be founded.

Each network is to be led by one major university, and participated in by at least five universities and a number of domestic and foreign enterprises. “Efforts are to be made for each network to attract at least 100 scientists or experts from abroad, Vietnamese or not, to partake in teaching and scientific research in higher education institutions,” state Deputy Prime Minister Le Thanh Long, who signed and enacted the scheme.

In particular, the scheme proposes amendments and supplementation to the state’s investment support policies on constructing facilities and equipment in service of training activities, scientific research, innovation, and startups based on investment cooperation between businesses and higher education institutions.

“The government will expand international cooperation and integration in training, science and technology, and innovation, particularly in a number of priority technology areas in order to proactively participate in Industry 4.0,” DPM Long stated.

The government has assigned relevant ministries to formulate and implement relevant policies. It will also encourage and support domestic higher education institutions to cooperate with foreign ones to deploy scientific and technological tasks on priority technologies of Industry 4.0.

The government’s new move is in line with its strategy for breakthroughs in sci-tech development, innovation, and digital transformation. Two weeks ago, the government submitted to the National Assembly some solutions on the issue, in line with the country aiming for economic growth of 8 per cent or more this year.

The government will urgently issue solutions to effectively promote science and technology funds, encourage the formation of venture capital funds, angel funds, startup funds, and innovation funds, it said. It will also build mechanisms to apply private and public models that will ensure the initiative of scientists in research and technology application.

“New advantages are to be created for experts, especially talented foreign experts and overseas Vietnamese, to work and develop science and innovation for Vietnam,” stated Prime Minister Pham Minh Chinh. “The government will also allocate resources and have specific policies to immediately implement the country’s programme on developing semiconductor human resources.”

According to the International Monetary Fund (IMF), one of the best solutions for Vietnam to realise its goal of becoming a high-income economy by 2045 is to boost innovation and conduct an overhaul of its higher education system. This is aimed to increase labour productivity (LP) – one of the decisive factors for the country to grow and improve competitiveness, as well as attract high-tech investments, especially implement the government’s dream to turn Vietnam into an attractive destination for semiconductor investment.

“Vietnam’s labour market still suffers from high skill mismatches and excessive employee churning – partly underpinned by the high informality,” said Paulo Medas, division chief and mission chief for Vietnam at the IMF.

For example, Medas said, university-level and vocational-technical skills are under-supplied, and on-the-job skill acquisition does not fill the gap, as few firms provide formal training given the high churning.

“These inefficiencies have contributed to the relatively low LP growth and limited the technological and productivity spillovers from foreign firms operating locally to domestic ones,” Medas stressed. “Efforts to improve the functioning of the labour market, including further investing in human capital and improving vocational training, skill upgrading, and job matching would increase labour market dynamism and LP.”

Under the International Labour Organization’s calculations, GDP per hour worked in 2025 for Vietnam will hit just over $12, far lower than Singapore’s $97, South Korea’s $50, China’s $20, Thailand’s $19, and Indonesia’s $16.

The World Bank said that if Vietnam were to solely rely on higher productivity, it would need to sustain a much higher 2 per cent productivity growth every year by 2030 to achieve the country’s high-income ambitions.

“On the other hand, relying solely on higher investment would require an unsustainable investment ratio of 49 per cent of GDP, even higher than China’s exceptionally high investment,” the World Bank said. “An illustrative pathway to high-income status by 2045 would require reaching a combined 1.8 per cent annual productivity growth and an investment ratio of 36 per cent by 2030, an ambitious but reachable goal.”