Many East Asian nations followed this path to become ‘tigers’. China, South Korea and China are the best-known success stories. 

Vietnam now ranks 12th in the world and third in ASEAN in electronics exports, with export turnover exceeding $70 billion in 2017. 

However, this is in title only because most (95 percent) of export value belongs to foreign invested enterprises. Vietnamese enterprises still have to import 77 percent of the total value of exports.

The underdevelopment of the electronics industry must not be blamed on inappropriate investment by the government. 

Vietronics, which was initially the General Department of Electronics and Information Technology, belonging to the Government, was established in 1984, the same time as Taiwanese Acer, Asus and TSMC2. 

But while Taiwanese enterprises have become giants, Viettronics is still struggling to survive.

Becoming the Vietnam Electronics and Information Technology Corporation, or a 90-Group corporation, with 13 subsidiaries operating in civil and specialized electronics fields, it had high annual revenue of $100 million in the early 2000s. 

However, later, the revenue dropped to VND73 billion in 2018 and profits of less than VND5 billion, or smaller than 1 percent of total assets.

Experts point out that Vietnamese enterprises have not made huge investments in R&D, and do not own core technologies, which has made it difficult for them to reduce production costs and become more competitive.

In order to develop industry, Vietnam needs to make appropriate investments in basic sciences development rather than rely on import technology.

Khoa Hoc & Phat Trien, a prestigious scientific journal, said that to successfully build up an industry, it is necessary to make thorough preparations for sophisticated coordination chains, which cannot be done overnight. 

Only when Vietnam has a firm foundation will it be able to think of an application-oriented strategy to create real Vietnamese products, including auxiliary components such as memory cards and battery cells, he said.

Even Asanzo, FPT and Vingroup, well-known technology corporations, have not made big investments in R&D.

The development path suggested for Vietnam’s electronics & IC industry, which has been lagging behind the region and the world, is to focus on products in fields in which it has advantages. Agriculture is one of those fields. Improvement in agricultural production capacity and environmental supervision are both needed.

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