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Vietnam: new destination for multinationals to set up R&D centers

Vietnam wants to upgrade foreign direct investment (FDI) quality by manufacturing products with higher hi-tech and added value, and multinationals are also striving to do this after many years in Vietnam.

At a meeting between the Prime Minister and foreign invested enterprises (FIEs) held on September 17, many foreign corporations showed their plans for research centers. The technology giant Samsung has plans for its research center in Hanoi.

Marukawa from Panasonic Vietnam said after 50 years in the Vietnamese market, the enterprise has been expanding investments by establishing an R&D and production center of IAQ (indoor air quality) equipment for the Asian market in Binh Duong; and establishing an R&D center for smart washing machines and refrigerators in Hung Yen.

“We have also expanded the IoT (Internet of Things) R&D center in Hanoi to develop products using IoT technologies and AI, smart digital factory solutions and other software products using AI,” he said. 

With a value of $200 million of products manufactured in Vietnam in the last few years, Micheal Vu Nguyen, Boeing Country Director in Vietnam, said he can see great potential for growth in Vietnam. 

“We organized the first Boeing Vietnam Aerospace Industry Forum last August, which had more than 200 participants, including potential suppliers and major vendors from Japan, South Korea and Malaysia, as well as Vietnamese and US government agencies, and Vietnam air carriers and universities. 

Boeing encourages major suppliers to make additional investments or new investments in Vietnam and cooperate with Vietnamese vendors to create a sufficient, effective and flexible supply chain in order to provide highest-quality products and services to clients,” he said.

Meanwhile, Rafael Frankel, Meta CEO Asia Pacific, said Meta is joining forces with MIC to seek more measures to support the national strategy on digital economy that promotes digital citizenship, digital government and digital society.

He posited a future when Vietnam leads the region in green economy and technology, and creates millions of new jobs.

“Imagine a Vietnam in the future, where Vietnam-made technologies are scattered across Southeast Asia, bring jobs to millions of Vietnamese, and protect the cenvironment for the next generations. Imagine a Vietnam which has many software engineers who not only develop software for international leading technology firms but own leading technology firms,” Frankel said.

“Let’s imagine that Vietnam takes the lead in the Metaverse, which is virtual reality and augmented reality devices. This allows a surgeon in HCM City to teach the next-generation surgeon in Hue without having to leave his office. The future is within reach of Vietnam,” he said.

Challenges 

Erin Ennis from Dell Technologies said the company’s experience with similar investment items over the last 30 years shows that Dell’s projects in Vietnam promote and make significant contributions to the development of local electronics, mechanical engineering and packaging. 

She said Vietnam would play an important role in Dell Technologies diversifying its supply chain.

Tran Sy Thanh, Hanoi Mayor, speaking at a recent conference reviewing Resolution 54 on the development of Red River Delta, said that Vietnam can attract projects which do the ‘body’ of hi-tech products but still cannot create the ‘soul’ with high added value and high technology such as semiconductor chips.

Hanoi leaders said some large corporations from South Korea have shown interest in this field. However, huge multinational groups want support policies when making huge investments of $5-10 billion.

Amid implementation of the Global Minimum Tax, the agreement under which investment incentives offered to foreign groups will be restricted to ensure that corporate income tax must be at least 15 percent, attracting high-quality FDI will face challenges as the government would have to weigh non-tax support measures for these groups.

Meanwhile, a high-quality workforce is still lacking to realize the plan to become a destination for projects with high level of hi-tech content.

A representative of Bosch recommended that the government continue making efforts to improve vocational training. He said Bosch is ready to help prepare Vietnam’s labor force for opportunities in the 4.0 industrial and digital transformation era.

Luong Bang

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