Double - digit growth: Abandoning the old trajectory
According to Minister of Science and Technology Nguyen Manh Hung, in order to achieve breakthroughs and generate new growth momentum, Vietnam must pursue technological and institutional breakthroughs and, above all, redesign the nation.
To achieve the goal of becoming a developing country with modern industry and upper-middle income status by 2030, and a developed, high-income country by 2045, Vietnam needs to maintain GDP growth of 10% or higher. Minister Nguyen Manh Hung shared several strategic approaches to achieving this target, emphasizing the role of science and technology, innovation, and digital transformation as key drivers.
To achieve double-digit growth, Vietnam must abandon the traditional trajectory of middle-income economies that rely primarily on low-cost labor and capital. Instead, it must pursue breakthroughs in technology and institutions, and fundamentally redesign the nation. Growth does not arise automatically from technology; rather, it results from reorganizing the economy around technological foundations.
Technology is a necessary condition, but innovation in governance and institutional reform are the sufficient conditions for generating new growth. If the new growth model places science and technology, innovation, and digital transformation at its core, then all national activities must be redesigned around these pillars. Only then can sustained high growth be achieved.
Several immediate solutions can help drive double-digit growth.
First, AI transformation across the entire economy and public governance. Artificial intelligence can increase enterprise productivity by 5-7%, reduce logistics costs by 10-15%, and improve the management of public investment, thereby enhancing the efficiency of a nation’s largest physical resources. Overall, this pillar could contribute 1-1.5% points to GDP growth. Vietnam has advantages in this area thanks to its young population, which can quickly adopt AI, and the strong coordination capacity of the Party and the State.
Second, further prioritizing the digital technology industry and technology exports. This is one of Vietnam’s strongest areas. In recent years, the sector has recorded annual growth of 15-20%. With emerging opportunities such as chip design, AI services, data centers, and AI software exports, the growth rate could reach 20-25%, potentially contributing an additional 1% point to GDP growth.
Third, localizing the FDI value chain. If the localization rate increases from 30% to 40-50%, especially in key sectors such as electronics, electrical appliances, and components, where the current rate is only around 10%, this could generate an additional 1-2% points of GDP growth. The recently amended Law on High Technology places particular emphasis on providing additional incentives for FDI enterprises that increase localization rates.
Fourth, promoting a nationwide digital economy and digital services. Efforts should focus on digital transformation among small, micro, and household businesses, with the goal that at least 80% of these entities adopt digital platforms. At the same time, e-commerce should be expanded to account for 20-30% of total retail sales, compared with around 10% today. This will serve as a major driver of productivity growth in the service sector, while online transactions will also stimulate the development of new products and services. This pillar could contribute 1-1.5% points to GDP growth.
Fifth, achieving institutional breakthroughs. This is the decisive factor. Priority should be given to enabling rapid experimentation with new models - such as establishing special zones where regulatory sandboxes operate without prior licensing requirements - shortening policy cycles, shifting strongly from pre-approval mechanisms to post-audit supervision, and, most importantly, redesigning how the economy operates in the digital era. This includes rethinking growth engines, industrial structures, state governance mechanisms, and the allocation of resources. Vietnam will need one or several chief architects capable of redesigning the economy on the foundations of science and technology, innovation, and digital transformation./.
Copyright belongs to the Vietnam Journal of Science and Technology (VJST-MOST)