return icon

Vietnam attracts foreign investment, but technology transfer remains low

VietNamNet Bridge - One of the major purposes of Vietnam attracting foreign direct investment (FDI) in the last 30 years is to receive technology to be transferred by foreign investors. 
VietNamNet Bridge - One of the major purposes of Vietnam attracting foreign direct investment (FDI) in the last 30 years is to receive technology to be transferred by foreign investors. 


However, according to the 2016 World Economic Forum, the efficiency of technology transfer from foreign invested enterprises (FIEs) in Vietnam is surprisingly low. Vietnam ranked 57th in the world in 2009, while it ranked 103rd in 2014, falling by 46 grades after five years, much lower than other regional countries, including Malaysia (13th) Thailand (36th), Indonesia (39th) and Cambodia (44th).

The analysis of other criteria also gives unsatisfactory results.

In 2015, of five business fields which made up 49 percent of the added value of the whole industry, three were low technology fields, including the processing industry, textiles & garments, and footwear. The other two fields, mining and steel manufacturing, had medium technology.

One of the major purposes of Vietnam attracting foreign direct investment (FDI) in the last 30 years is to receive technology to be transferred by foreign investors. 

The industry which made up 12.2 percent in added value was electronics, computer and optical products. Though it is considered ‘hi-tech industry’, the works implemented in Vietnam are simply assembling.

The labor productivity in Vietnam industries increased very slightly, just 2.4 percent per annum in 2006-2015, or 3.9 percent lower than the country’s GDP growth rate.

Analysts, when comparing the number of FDI projects and technology transfer contracts, found there were only 600 technology transfer contracts out of 14,000 FDI projects, or 4.28 percent.

Regarding the quality of transferred technology, a report from MPI showed that more than 80 percent of FIEs use medium level technology, 14 percent low technology and only 5-6 percent use high technology.

Analysts commented that the policies and business environment do not stimulate  technology transfer.

Under decentralization, provincial authorities have the right to grant investment licenses to foreign investors. As localities try to attract more FDI, they rush to build industrial zones and offer very high investment incentives, which, in many cases, go beyond the national incentive frame. 

Some projects could not satisfy the requirements in some localities, but were still welcomed in other provinces.

Meanwhile, FIEs don’t have power to transfer modern technology if they invest mostly in labor and capital intensive industries. Electronics and computer manufacturing are considered ‘high technology industries’, but the factories foreign investors have in Vietnam only assemble components, the work with the lowest value in the global production chain.

A technology transfer cycle is considered complete when the transferee can master the technology and develop the technology. It is still unclear when the technology transfer cycle will be completed in Vietnam.


New law will help develop technology in VN

Technology transfer law is set to transform local tech

Kim Chi


Central bank not tighten real estate credit: Deputy Governor

The State Bank of Vietnam (SBV) has never issued any documents or statements ordering credit for real estate be tightened, Deputy Governor Dao Minh Tu said on February 8.

Vietnamese Prime Minister starts official visit to Singapore

Prime Minister Pham Minh Chinh, his spouse, and a high-ranking Vietnamese delegation arrived in Changi Airport on February 8 afternoon, starting a three-day official visit to Singapore.

Businesses discuss ways to overcome challenges in 2023

Warned that uncertainties will still exist in 2023, businesses need to prepare well to weather the storm.

Vietnam's bond market remains quiet this year

The scale of debt in the corporate bond market is less than 15 per cent of GDP.

Organ trafficking in Vietnam driven by high demand, low rate of donation: experts

A conference on organ donation registration and the prevention of human organ and tissue trafficking was held on Monday.

VCCI proposes allowing businesses to set fuel retail prices

The Vietnam Chamber of Commerce and Industry (VCCI) has written to the Government suggesting fuel retail prices be decided by businesses based on supply and demand to prevent fuel shortages.


Vietnam puts children at centre of development policies, strategies: Ambassador

Gov’t issues action plan to realize Hanoi’s development vision until 2045

The Government has issued an action plan to realize Politburo’s resolution on the objectives for Hanoi’s development until 2030, with a vision to 2045.

Commercial sidewalk use may be charged by HCMC authorities

HCMC is planning to allow the paid use of sidewalks for commercial purposes such as vending goods or parking if these business activities leave a space of at least 1.5 meters wide for pedestrians.

CAAV advises caution when buying air tickets

The Civil Aviation Authority of Viet Nam (CAAV) has received feedback on the fact that passengers have to buy air tickets higher than the specified prices on domestic routes, especially during the peak of the Lunar New Year (Tet).

Prime Minister leaves Hanoi for official visits to Singapore, Brunei

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam left Hanoi at noon on February 8 for official visits to Singapore and Brunei from February 8-11.

US war veteran wishing to return wartime diary to Vietnamese family

Pater Mathews, a US war veteran, has emailed relevant agencies of Ha Tinh province, central Vietnam, expressing his desire to fly to Vietnam and return a Vietnamese martyr’s diary he came across decades ago to the martyr’s family.


January payment transactions via national public service portal valued at 11.8 mln USD

Vietnam needs new products, services to reach tourism targets

To realise the targets of attracting 110 million tourists and earning some 650 trillion VND (27.5 billion USD) in revenue this year, Vietnam is recommended to develop more products and services to offer new experiences to visitors.

PM Chinh’s Singapore visit expected to advance bilateral trade ties

Prime Minister Pham Minh Chinh’s Singapore visit from February 8-10 aims to affirm the determination to elevate the bilateral economic ties to a new height in the context of many free trade agreement (FTAs) coming into force.