After graduating from Hanoi University of Science and Technology, engineer Tran Quang An did not choose to return to his hometown to start a career. He decided to join a leading technology company in the capital city. Hanoi is the best place for him to cultivate and promote his well-trained IT capabilities. An is one of 150 employees of a pioneering artificial intelligence (AI) unit in Vietnam. Quickly grasping many new world trends, his unit has provided about 3,000 AI application automation solutions and 3,200 virtual assistants (Chatbots) per year, serving more than 200 million monthly interactions between businesses and customers.

Assessing the locality’s innovation level

It is no coincidence that Hanoi has entered the top 200 global innovative cities. Notably, in the recent announcement of the Ministry of Science and Technology, Hanoi is the leading locality in the country, in terms of the Provincial Innovation Index (PII) in 2023, with 62.86 points, positioning first in both the input and output innovation rankings, thanks to leading 14 out of 52 component indicators. Nguyen Quoc Ha, Deputy Director of the Hanoi Department of Science and Technology, said that among the component indicators, Hanoi has advantages in research and development, and innovation such as human resources, expenditure on research and development, number of science and technology organisations, rate of enterprises carrying out research and development activities, rate of enterprises with innovation activities, and outputs of intellectual property, such as inventions, utility solutions, plant varieties, industrial designs and socio-economic impacts, such as human development index. Hanoi has outstanding figures compared to other provinces and cities.

Along with Hanoi, Ho Chi Minh City and Hai Phong are also stars in innovation with outstanding features in human resources, investment expenditure, institutions and preferential policies. The common features of the localities leading the PII rankings are large scale, developed economy, high per capita income, complete infrastructure, human capital and an abundant number of enterprises.

Half of these are centrally-governed cities (including Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, and Can Tho), which are important areas in terms of military, politics, culture, and economy. The rest are the localities with developed industries, which attract and concentrate large industrial parks in the country. Therefore, they have support policies and a favourable environment for start-ups and innovative businesses.

However, each locality has its own highlights when measured by the PII. For example, the capital city identified science and technology development, including the startup ecosystem, as one of the breakthroughs to turn this place into a leading innovation centre by 2025 and welcome capital flows from the semiconductor sector. Therefore, Hanoi achieved absolute scores in the components of human resources for research and development, as well as the level of spending on this activity. The rate of enterprises investing in innovation in the capital city also reached 100 points. In terms of output, Hanoi’s number of intellectual properties (including patents, and utility solutions) is among the leading groups in the country.

Meanwhile, Ho Chi Minh City scored absolute points in terms of policies to support small and medium-sized enterprises, digital infrastructure, and the rate of enterprises with research and development activities. The innovative startup ecosystem, with nearly 2,000 startups, is considered the most dynamic in the country. Ho Chi Minh City Director of the Department of Science and Technology Nguyen Viet Dung said, that 95% of enterprises are small and micro-sized and need policies to promote re-startups. Therefore, in addition to the "incubation" mechanism for startups and attracting investment in large projects, a significant part of the City’s policy space and resources have been allocated to enterprises, so that they can create new models and approaches to development.

In Hai Phong City, the locality's highlight lies in the policy of promoting science – technology and innovation for socio-economic development. The City has also been highly appreciated for its administrative reform and labour capital. Education and science - technology are the areas that receive the most investment and development. Cuong said spending on research topics has been pushed "to the threshold". There is no longer the "moderate and small investment as before".

To meet the human resource demand, with 1.2 million workers, Hai Phong leaders said their experience was promoting the training programmes according to the needs of investors and the shift in economic structure. Vocational training institutions have been arranged and linked with businesses. The training list has been expanded for key industries, including electricity - electronics, mechanics, shipbuilding, maritime, logistics, etc.

Thanks to this move, the contribution of total factor productivity (TFP) to GRDP reached more than 43%, an increase of 10% compared to 2015. The speed of technological and equipment innovation is also nearly 5% higher than ten years ago. Hai Phong's current GRDP is nearly 17 billion USD, four times higher than in 2015 and ranked 5th out of 53 localities. Director of the Institute for Policy Studies and Media Development Nguyen Quang Dong said, that in the context of Vietnam facing urgent demands for innovation while the time to take advantage of existing benefits, such as the golden population, getting shorter, the PII is a very useful tool. "A new set of metrics will help localities have greater motivation for action."

People perform administrative procedures at their locality via the public service portal. (Photo: NGUYEN HAI)

Ranking is not the finish

The PII has become a concern for many localities. Nguyen Vo Hung, Head of the Department of Innovation Policy, under the National Institute for Science-Technology Policy and Strategy Studies of the Vietnam Institute of Science Technology and Innovation said, that even the leading localities need to recognise their weaknesses.

Nguyen Quoc Ha, Deputy Director of the Hanoi Municipal Department of Science and Technology, assessed that the capital city has 11 indicators in the group of 20 localities, at the bottom of the rankings, including legal institutions, security and order, market entry costs, percentage of spending on science and technology/GRDP, dynamism of local authorities, environmental governance, geographical indications that have been granted protection certificates/total number of communes, etc. Therefore, the city still has much work to do.

Agreeing with this view, Hoang Minh Cuong, Vice Chairman of Hai Phong City People's Committee, said that the score and rankings are not important, but the localities’ realisation of their weaknesses is necessary. The results of the PII 2023 report show that Hai Phong's weaknesses are the low number of patents and low international citations.

To overcome these problems, the Vice Chairman of Hai Phong City People's Committee informed that in the near future, the city will improve the quality of human resources for research and development, as well as develop brands, high-tech industrial clusters and startup support centres.

According to Dr Vu Van Tich, Director of the Vietnam Institute of Science Technology and Innovation (under the Ministry of Science and Technology), Vietnam currently has many sets of indicators to evaluate administrative reform, digital transformation, etc. However, the PII is comprehensive and covers the development model of each locality. In particular, the calculation method is based on statistical data of each locality and follows the Global Innovation Index of the World Intellectual Property Organisation (WIPO).