Nearly VND10 trillion was spent between 2011 and 2015 on science and technology development at the national level, yet most of the value of high-tech products and applications in Vietnam was generated by foreign-invested enterprises (FIEs).

These figures are given in a report on “Effective implementation of policies and laws on science and technology development to promote industrialization and modernization in 2005-2015 and the orientation for the coming period” done by a supervision group of the Standing Committee of the National Assembly and published on Tuesday.

The results show that the value of high-tech products and applications made a greater contribution to GDP in 2011-2013, going up from 11.7% to 19.1% and 28.7%. However, most of this value was generated by FIEs.

In 2011-2014, innovation of technology and equipment grew at an annual pace of 10.68%, meeting the strategic objective of 10-15% for 2011-2015, according to preliminary calculations by the Ministry of Science and Technology. Still, the majority of local enterprises are using technologies that are two to three generations behind the world, except for areas such as IT, oil and gas, aviation and finance-banking.

In the field of industrial manufacturing where one-third of domestic businesses are active, those with advanced technology make up less than 20% of the total, mainly FIEs.

This is inversely proportional to the level of investment and the number of scientific works Vietnam has published internationally. More than 11,700 statistical reports, scientific studies and research papers were launched globally in the 2011-2015 period, 2.2 times over the number in 2006-2010, with average growth of 19.5% a year.

In 2011-2015, the total budget for national-level science and technology development was estimated at VND9.61 trillion, 78% of which was decided by the science ministry and the rest by other State agencies.

Of the total operational 500,000 firms nationwide, those active in supporting industries account for a mere 0.03%, with just 500 of them acting as suppliers of automobile, motorcycle and electronics manufacturers.

Most raw materials for making parts and auxiliary equipment must be imported, leading to low added value and poor competitiveness of local enterprises.

Demand for machinery and equipment from now to 2020 and subsequent years is quite large, approximately US$250 billion per year in 2011-2025. It is expected that Vietnam will have to spend tens of billions of U.S. dollars to import machinery and equipment a year.

The current capacity of mechanical engineering can only meet 30% of the demand at home. Most domestic companies lack capital, use obsolete technology and equipment, and fail to meet the more stringent requirements for high-tech products.

Support policies of the State have yet to translate into reality while investment in mechanical engineering in the past few years has remained fragmented and asynchronous.

SGT