6.6 Vietnam’s vision for greener high-tech growth

Vietnam significantly underinvests in agricultural R&D, putting the agrifood sector’s long-term development at risk (table 6.2). The misalignment between Vietnam’s strategy and high-tech aspirations (box 6.6) with its current investment in agricultural R&D (0.19 percent of agricultural GDP) and

Vietnam’s vision for greener high-tech growth

Agricultural research and development (R&D) is still a peripheral activity in Vietnam. Over the years, Vietnam has made modest investments into agricultural technology, inputs (for example, subsidized fertilizer, improved varieties), and services, all of which played a significant role in the sector’s take-off (World Bank 2016). Various research centers were established in the 1980s. By 2003, 28 different research agencies had been placed under the Ministry of Agriculture and Rural Development. Public agricultural R&D expenditures nearly tripled during 1996–2002. Public investment into research totaled $71.3 million in 2002, that is, 0.88 percent of agriculture, fisheries, and forestry value added (Stads and Hai 2006; World Bank Databank). Vietnam’s investment into agricultural R&D has since declined significantly, from 0.88 percent in 2002 to 0.19 percent in 2015.

Private agricultural R&D is limited. Vietnamese enterprises have been reluctant to develop in-house R&D. Most enterprises rely on imported technology in the form of machinery and equipment, use technology transfer from abroad, or joint venture with foreign partners (Hoang 2017). Since 2014, private R&D has gradually increased. Viettel Group has taken the lead in science and technology (S&T) investing (10 percent of its expenditure). It spent $200 million on S&T and has established three research institutes. Thai Binh Seed Company set up an R&D center for new products with a scale of tens of hectares, investing hundreds of billion Vietnamese dong for research projects. Thanks to strong investment in S&T, the company has successfully bred hundreds of new hybrids, testing thousands of new plant varieties. The strong investment in S&T has made Thai Binh Seed Company one of the leading companies in the seed industry in Vietnam. The evidence indicates that, once an enterprise is properly aware of the role of S&T and transforms it into action, S&T can be vigorously developed, contributing to the development of enterprises (World Bank, n.d.).

Vietnam is in pursuit of innovation and emerging technologies for agriculture and economywide transformation by 2050. The government has identified four priority industries: emerging technologies (artificial intelligence, robotics, and smart systems), education and training, high-tech agriculture and food processing, and green energy, environment, health, and tourism. Of these, emerging technologies is the most important given that it supports the other sectors and sets the tone for Vietnam‘s ecosystem development (Austrade 2019). Among the emerging technologies, interest in blockchain is growing rapidly. Indeed, Vietnam has the potential to become Southeast Asia’s blockchain innovation hub (Hynes 2018).

To improve yields, overall productivity, and the sustainability of agriculture, Vietnam is in the process of developing 10 high-tech agricultural parks and zones (2020–30) with investment in R&D, extension, training, demonstration, and processing of several high-value commodities (Official Gazette 2015).

Vietnam’s largest cities are also interested in emerging technologies. The local government in Da nang is focused on boosting growth in tourism, hightech industries (information and communication technology and software development), and the logistics sector. In Ho Chi Minh City, priority sectors include high-tech (that is, precision engineering, automation), micro-electronics, information technology, telecommunications, biotechnology applied to pharmaceuticals and the environment, new materials, new energy, nanotechnology, agritech, edtech, the Internet of Things, and food processing.

Vietnam is also striving to improve the enabling environment and has invested in key organizations, provided support to start-ups, and improved training efforts. Despite endeavors to improve the ecosystem for emerging technologies, Vietnam still faces several main challenges, such as limited access to finance, talent and entrepreneurial skills, R&D investment, and management of intellectual property rights.