Government incentives are helping to drive a tech boom

The National Assembly has agreed on the pilot of a number of policies that will smooth the path for sci-tech, innovation, and digital transformation activities through a new resolution.

Article 17 of the resolution underscores an incentive on financial support for constructing microchip manufacturing factories.

“The state budget will provide no more than 30 per cent of the project’s investment and no more than VND12.8 trillion ($512 million) for a small-scale semiconductor chip and high-tech manufacturing factory in service of research, design, production, packaging, and testing semiconductors presided over by the Ministry of Defence, directing Viettel to implement under the country’s semiconductor development strategy,” Article 17 stated.

This financial support shall come from the investment development capital source from the state coffers under the Law on State Budget. This policy will take effect until late 2028.

According to Article 6 of the resolution, organisations and individuals engaged in scientific research and technological development activities are exempted from civil liability when causing damage to the state in the process of performing state-funded sci-tech tasks, though they have fully implemented relevant procedures and regulations in the process of implementing such activities.

“Organisations and individuals shall not have to refund the state budget used for carrying out such tasks, with a well-prepared implementation process failing to produce desired results,” it continued.

What is more, the resolution also underlined financial support for enterprises to quickly participate in 5G network infrastructure development. Article 14 said that the state provides financial support to encourage telecommunications businesses to quickly deploy 5G infrastructure in 2025, reaching at least 20,000 5G base transceiver station (BTS) stations. This support shall come from the revenue from radio frequency licensing fees collected in the period 2024-2027.

The support level for a 5G BTS station is calculated at 15 per cent of the average equipment investment cost for a 5G BTS station implemented in 2025 by telecommunications enterprises. The number of 5G BTS stations supported is the total number of 5G BTS stations that enterprises have accepted and put into use within 2025.

Vital to add investment

The resolution is in line with the Politburo issued Resolution No.57-NQ/TW last December on breakthroughs in science and technology development, innovation, and national digital transformation. Party General Secretary To Lam stated that Resolution 57 will lay a firm foundation for the country’s robust development in the new era.

“It is crucial to invest more in science and technology, innovation, and digital transformation, and consider this a long-term strategy. We must accept delays and risks in this work,” the Party chief stated. “Innovation is a key to sustainable prosperity, with scientists holding the central role.”

Developments must be pursued in both natural and social sciences - vast and boundless domains with untapped potential, offering opportunities for intellectuals, scientists, and labourers to unleash their creativity and maximise their capabilities, he added.

In late 2024, the government began to establish utilisation of an investment support fund, demonstrating Vietnam’s commitment to fostering innovation and establishing itself as a hub for advanced technology. It will provide initial investment support and cost support, and eligible businesses may choose only one type if they qualify for both.

Enterprises investing in research and development centre projects in sectors like semiconductors and AI that meet specific criteria can receive support of up to half of the project’s initial investment costs or other levels as determined by the government.

The fund also provides financial assistance for enterprises for many kinds of costs including training and human resource development, investment in creating fixed assets, manufacturing of high-tech products, investment in social infrastructure works, and other cases as determined by the government.

Quality workforce required

According to the World Bank, the semiconductor market has been steadily increasing in Vietnam, and the country is now the third-largest exporter of semiconductors to the United States with a value of $562 million in 2023, after experiencing a 75 per cent on-year growth in exports to the country.

However, the bank also stated that in Vietnam, the limited supply of skilled workers presents a significant constraint to upgrading into more skill-intensive, higher value-added activities. The bank cited its recent surveys stating that a third of employers encounter a dearth of applicants for open positions, while 22 per cent of managers consider the greatest challenge to be finding a workforce with appropriate education.

According to the Central Economic Commission, Vietnam’s startup ecosystem ranks 56th out of 100 countries globally, while Hanoi and Ho Chi Minh City are among the top 200 global cities for innovation.

In 2024, Vietnam ranked 44th out of 133 countries on the Global Innovation Index and 71st out of 193 countries on the E-Government Development Index. The digital economy accounted for an estimated 18.3 per cent of GDP, while the digital technology industry achieved $152 billion in revenue, with hardware and electronics exports hitting $132 billion.

Last year, the total revenue of the digital technology industry is estimated to have reached $152 billion, an increase of 35.7 per cent compared to 2019. Vietnam’s value in the total revenue of the digital technology industry reaches 31.8 per cent, up from 21.35 per cent in 2019.

In 2024, Vietnam boasted five digital technology industry products ranked among the top worldwide - second in exporting smart mobile phones, fifth in computer components, sixth in computer equipment, eighth in electronic components, and seventh in software outsourcing.

According to the International Labour Organization, about 70 per cent of jobs in Vietnam are at risk of automation. Sectors affected most include garments and textiles (85 per cent at risk), wholesale, retail, and repair of motor vehicles (84.1 per cent), agro-forestry-fisheries (83.3 per cent), electronics (75 per cent), and manufacturing (74.4 per cent).

Vietnam currently has over 38 million labourers with no primary training.

Nguyen Thi Kim Thuy, National Assembly deputy Danang Local practice in Danang has shown that in order to utilise the rapid development of science, technology, innovation, and digital transformation, especially attracting high-quality human resources to work and master new and future technologies, what is the most important is to have mechanisms to quickly invest in infrastructure. Such infrastructure works include workspaces, modern exhibition galleries, laboratories, international-standard pilot production for design and training work, building testing and packaging factories in AI and semiconductors, and biotechnology research laboratories, along with infrastructure for energy, clean water, digital infrastructure, fiber optic data centres, and 5G and 6G transmission stations. However, currently, the legal regulations do not exist or are only mentioned in general terms, especially the procedures and processes for construction investment are very cumbersome. There are also no specific technical standards, failing to meet the requirements. Hoang Minh Hieu, National Assembly deputy Nghe An province The policy of attracting and developing high-quality human resources for the development of science and technology is a very urgent issue. To develop new sci-tech, personnel is the most fundamental issue. We are currently in critical need of high-quality workers. For example, in the IT industry, according to research by the Vietnam Software and IT Services Association, in 2025 alone, Vietnam is lacking 150,000-200,000 IT engineers, especially in such sectors as AI, big data, and cybersecurity. To have enough of this number, it is necessary to have experienced international experts to train domestic staff, but we also need foreign staff to come to Vietnam to work. Therefore, it is suggested that there must be a policy to facilitate businesses and research centres to recruit Vietnamese experts abroad and international experts to participate in training and nurturing Vietnamese talents in the country through policies, such as visa support, tax exemptions, and other policies so that they can partake in working and training in a stable and long-term manner. We need to promulgate this policy in a timely and competitive manner because currently, countries in the region have also enacted having very competitive policies in attracting high-quality people. For example, Thailand issued a golden visa policy in 2024 and Indonesia is also expected to issue a similar policy in 2025. I suggest that it is necessary to study and implement this policy immediately to promptly meet practical needs, striving to make Vietnam a destination for advanced technological knowledge of humanity.