Double-digit growth must be based on technology and institutional breakthroughs.

According to Minister of Science and Technology Nguyen Manh Hung, to achieve double-digit growth, Vietnam needs to move beyond a growth model based on cheap labor and investment capital, shifting to a new model that takes science, technology, innovation, and digital transformation as its central driving force. This requires not only technological development but also innovation in operational methods and institutions, thereby reorganizing the economy on a technology-based foundation.

Minister of Science and Technology Nguyen Manh Hung

To achieve double-digit growth, we must abandon the old trajectory of middle-income countries based on cheap labor and capital, and instead focus on technological and institutional breakthroughs, and, most importantly, national redesign.

Growth doesn't come from technology itself, but from reorganizing the economy based on technology. Technology is a necessary condition, while operational innovation and new institutions are sufficient conditions to generate new growth.

If the new growth model takes science and technology, innovation, and digital transformation as its central driving force, then all national activities must be redesigned to be based on science and technology, innovation, and digital transformation. Only in this way can high growth be achieved.

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Some immediate solutions for achieving double-digit growth :

Firstly, AI can transform the entire economy and government administration. AI can help increase business productivity by 5-7%, reduce logistics costs by 10-15%, assist in public investment planning, and make a nation's most valuable material resources more efficient. Overall, this pillar could generate 1-1.5% GDP growth. Vietnam has advantages due to its young population, its ability to learn AI quickly, and the Party and State's capacity for centralized coordination.

Secondly, we need to focus even more on the digital technology industry and technology exports. This is a very strong point for Vietnam. In recent years, we have achieved a growth rate of 15-20% in this sector, but with new opportunities such as chip design, AI services, data centers, and AI software exports, we can achieve a growth rate of 20-25%. This will also generate an additional 1% of GDP growth.

Thirdly, localizing the FDI value chain. If we increase the localization rate from 30% to 40-50%, especially in key sectors such as electronics, electrical appliances, and components, which are currently very low at only about 10%, it could generate 1-2% GDP growth. The High-Tech Law that we have just amended focuses on providing additional incentives for FDI enterprises when they increase their localization rate.

Fourth, the digital economy and digital services for the entire population. Focus on the digital transformation of small, medium, and micro enterprises and household businesses, aiming for at least 80% of these organizations to use digital platforms. Continue to promote e-commerce to account for 20-30% of retail sales, currently only 10%. This is a key driver for increasing productivity in the service sector, and buying and selling in the digital environment will also promote the development of new products and services. It could contribute 1-1.5% to GDP growth.

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Fifth, institutional breakthroughs. This is a decisive factor, but the focus must be on allowing rapid testing of new things (creating special zones within sandboxes where permission is not required), shortening policy cycles, shifting strongly from pre-approval to post-approval, and especially redesigning how the economy will operate in the digital age—that is, redesigning the growth engine, the industrial structure, the way the state operates, and how resources are allocated. One or more chief engineers are needed to redesign the economy based on science and technology, innovation, and digital transformation.

Nguyen Manh Hung, Minister of Science and Technology

Source: https://mst.gov.vn/tang-truong-hai-con-so-phai-dua-vao-cong-nghe-va-dot-pha-the-che-197260310225231068.htm