Strengthening internal capabilities to achieve breakthroughs in the digital age: A breakthrough in human resources and investment in R&D are necessary.

Digital technology is identified as one of the key drivers of rapid and sustainable national economic development. Investing in research and development, high-quality human resources, fostering innovation, and strengthening linkages among stakeholders are key to Vietnam's breakthrough, mastering technology, and enhancing national competitiveness. This is not only the responsibility of the State, but a challenge requiring the joint efforts of the entire ecosystem, from research institutes and universities to businesses and workers.

Vietnam's research and development (R&D) capacity remains significantly dependent on external resources. Meanwhile, our ability to master core technologies is limited, primarily due to a shortage of high-quality human resources and difficulties in mobilizing investment capital. Increased investment in R&D is considered a crucial solution to boost this capacity.

Mastering technology requires a highly skilled workforce.

Compact size, flexible gripping system, easy fruit ripeness detection, and three-dimensional movement are some of the advantages of the fruit-picking robot, a product researched and developed over two years ago by the Mechatronics and Automation group at the University of Technology (Vietnam National University, Hanoi). The entire design and manufacturing process was done domestically, resulting in a robot cost of only about 30% compared to similar imported products. This is just one of many technological innovations researched by Vietnamese people, aimed at solving practical problems in agriculture , construction, logistics, education, and healthcare. However, behind these bright spots lies a major unsolved problem: the shortage and scarcity of high-quality technological human resources, a key factor in mastering the technology.

The 2024 Global Innovation Index report, published by the World Intellectual Property Organization (WIPO), ranked Vietnam 44th out of 133 countries and territories, an increase of two places compared to 2023. The high-tech industry output index alone increased by 10 places, reaching 28th. However, investment in R&D, a measure reflecting the scientific foundation and quality of human resources, has not kept pace with growth. Vietnam's total R&D spending is currently only around 0.5% of GDP (estimated at 0.4% in 2023), significantly lower than the global average (2.3%) and far behind regional countries such as China (2.5%), Singapore (1.9%), and Malaysia (1%).

Associate Professor, Dr. Nguyen Long Giang, Deputy Director of the Institute of Information Technology - Vietnam Academy of Science and Technology, stated that a country wishing to develop strongly in the field of digital technology needs a skilled workforce, especially experts in cutting-edge technologies such as artificial intelligence, cloud computing, blockchain, and cybersecurity. The lack of high-quality human resources and the limited investment in R&D are fundamental factors hindering Vietnam's digital technology development today.

In fact, the demand for high-quality human resources in emerging technology fields is rapidly increasing, leading to intense competition for talent not only domestically but also globally. Brain drain and frequent job hopping are common occurrences in the technology industry.

Not only tech startups but even large corporations like Viettel Group (Vietnam Military Telecommunications Group) are struggling to attract and retain high-quality personnel. Facing fierce competition from both domestic and international markets, Viettel has offered compensation approximately 20% higher than the industry average, with some strategic positions ranking in the top 25%, or even top 5%, of the market.

Mastering technology is impossible without a high-quality workforce. Experts believe that immediate and decisive action is needed from the government, businesses, and training institutions to keep pace with the global technological innovation and move towards a future where they lead and dominate the game.

Removing capital barriers

R&D is a decisive factor in the ability to innovate and develop technology. Technological innovation is now also a vital need for businesses. However, the biggest obstacle for businesses remains capital. “Businesses may have ideas and feasible plans, but difficulties with credit can hinder the realization of their dreams. The unique nature of scientific and technological goods is that they are tacit knowledge, making them difficult to price and trade. Therefore, intermediary organizations are needed to support negotiations and transactions between parties,” said Mr. Pham Duc Nghiem, Deputy Director of the Department of Startups and Technology Enterprises, Ministry of Science and Technology.

The case of Thuan Thanh Technology Solutions Co., Ltd. (Bac Ninh) is a fairly typical example. Nearly 10 years into its operation in providing software services, solutions, and products, the company's investment capital for technology remains very limited. This year, hoping to obtain preferential loans to develop its data infrastructure, Mr. Le Van Kien, the company's director, expressed concerns about the bank's loan criteria: “According to credit standards, collateral such as cars or real estate is required for loan approval. Therefore, many technology companies find it difficult to meet these requirements.”

The collateral for technology companies can be intangible assets such as patents or technology, but these assets often lack proof of future business performance and historical data for appraisal.

The collateral for technology companies can be intangible assets such as patents or technology, but these assets often lack evidence of future business performance and historical data for appraisal. The Institute for Digital Economy Development Strategy (IDS) also noted that while Vietnam currently has several technology companies with the potential to compete internationally, these businesses struggle to scale up due to obstacles in raising capital. In the context of the State Bank of Vietnam preparing to launch a 500 trillion VND credit package with preferential interest rates to support businesses investing in digital infrastructure and technology, experts believe that barriers to lending based on the specific characteristics of innovative businesses need to be removed; otherwise, banks will be hesitant to disburse funds.

The reality in Ho Chi Minh City is a different story worth considering. Despite being considered the country's largest R&D center, with its High-Tech Park and Quang Trung Software Park housing R&D centers for global companies like Intel, Samsung, and Bosch, along with leading universities and research institutes, the majority of the city's R&D spending still comes from the private sector, while the city's budget allocation is only around 200 billion VND per year.

This is also a common shortcoming nationwide, as statistics show that the average state budget allocation for science and technology during the 2020-2022 period was 17,494 billion VND (accounting for 1.01% of total state budget expenditure, or 0.20% of GDP). This falls short of the target set in the Science and Technology Development Strategy for 2025 (1.2%-1.5% of GDP) and is lower than the requirement of Resolution No. 20-NQ/TW dated November 1, 2012, on the development of science and technology (over 2% of GDP by 2020). This leads to a funding shortage for long-term projects and limitations in building modern technology infrastructure.

Resolution No. 57-NQ/TW of the Politburo on breakthroughs in national science and technology development, innovation, and digital transformation sets a target of 2% of GDP for R&D spending by 2030, with over 60% coming from the private sector. In addition, at least 15% of the science budget will be allocated to strategic technologies such as artificial intelligence, semiconductors, and renewable energy. Clearly, this goal requires strong institutional reforms and decisive action.

Mr. Nguyen Phuong Tuan, Vice Chairman of the National Assembly's Committee on Science, Technology and Environment, stated that the amendment of the 2013 Law on Science and Technology is focusing on addressing inadequate regulations, such as the construction of budget estimates and management of science and technology tasks using state budget funds, to ensure they are appropriate to the specific characteristics of science and technology activities in terms of novelty, urgency, time lag, and research risks, and to meet the needs and aspirations of the scientific community. Along with this are decisive and concrete actions, such as removing bottlenecks in the fund mechanism to make it attractive enough to encourage units and businesses to increase their allocation and utilization of funds.

In recent years, the utilization rate of the Science and Technology Development Fund by enterprises has been low and unstable. Some corporations that are interested in science and technology have used the fund relatively effectively, but only 60%-70% of the allocated funds. For example, according to statistics, Viettel used 2,372 billion VND, equivalent to 60% of the allocated funds during the 2016-2018 period. Most recently, although the fund mechanism has been specified in Resolution No. 193 of the National Assembly, due to the lack of detailed regulations, localities and units are still waiting for the Government, fearing certain obstacles during implementation. At the same time, experts believe that the procedures for establishing the Science and Technology Development Fund need to be expedited, instead of taking up to a year as is currently the case.

Vietnam has a fairly good starting point, with digital industry revenue reaching US$152 billion in 2024, an increase of over 35% compared to 2019, and as many as 74,000 businesses operating in this field. However, to maintain growth momentum and move towards mastering strategic technologies, there can be no delay in removing barriers related to human resources and capital, two factors that determine the country's competitiveness and technological self-reliance in the coming period.

Source: https://nhandan.vn/cung-co-noi-luc-de-but-pha-trong-ky-nguyen-so-can-dot-pha-tu-nhan-luc-va-dau-tu-cho-rd-post875370.html