Spillover effects from the foreign invested economic sector onto the national economy remain minor. Experts say Vietnam must rapidly increase productivity, adopt AI, and deepen participation in global supply chains.
Tran Quoc Hung, international economic and financial expert, said Vietnam benefited for years from global manufacturing shifts. Multinational corporations sought to diversify production under China Plus One or Plus Two strategies, aiming to reduce risks associated with over-concentrating operations in a single country.
Within this framework, Vietnam functioned as a “connector economy” bridging China, the US, and third markets, attracting an annual average of $35–38 billion in registered FDI.
However, connectivity advantages do not equate to capturing high value within supply chains. Though FIEs account for roughly 80 percent of total export turnover, Hung noted that the foreign invested sector operates like an “isolated island”.
For instance, a major technology corporation (S.) invested on a massive scale in Vietnam, yet domestic enterprises supply only low-value packaging and boxing, while all core components and high-tech semi-finished products are imported from abroad.
Consequently, Vietnam’s domestic value added (DVA) index stands at 39 percent, significantly below the 40–60 percent observed in other emerging economies. The level of output linkage remains similarly low.
A corporate representative warned of Vietnam “growing old before growing rich”. By 2036, an estimated 14–15 percent of the population will be over 65 years old. If this trend persists, labor shortages will intensify.
Robots and AI will no longer serve merely as cost-reduction tools for enterprises, but as essential components in sustaining the economy’s productive capacity.
Pham Thi My Le, Chair of L&A, observed that AI adoption can boost productivity 1.5- to 2-fold depending on the operational stage. Workforce training must align directly with technology integration.
Hung noted that Vietnam’s proportion of certified and credentialed workers currently sits at around 21 percent against a target of 35–40 percent. However, the AI era requires workers with capacity for continuous relearning and adaptation rather than relying solely on formal degrees.
Hung added that with population growth slowing to roughly 0.6 percent annually, the growth model relying on expanding cheap labor faces exhausted headroom.
Meanwhile, to achieve the target GDP growth of 8.5 percent by 2030 or advance toward double-digit growth, labor productivity must expand by 8.5–9 percent annually (compared to a 5.6 percent contribution during 2016–2023).
“In other words, the same worker must generate higher output, the same capital unit must yield greater value, and the same factory must produce more, faster, and at lower costs,” Hung stated.
Thus, the challenge for enterprises involves accelerating automation and AI implementation, elevating labor productivity by purchasing, adopting, adapting, and integrating new technologies into production more rapidly.
Vietnamese enterprises’ opportunities lie in capacity to adapt
Another noteworthy topic discussed involved managing FDI inflows. Hung said an FIE can bring capital, technology, markets, and management practices into Vietnam, but if the supply chain remains largely outside Vietnam, the impact on domestic firms remains constrained.
Therefore, linkages between FDI and Vietnamese enterprises serve as a crucial benchmark. Domestic firms must prepare for these connections through their own internal capacities, from management, quality, standards, and delivery capabilities to technology and origin traceability, to enter global supply chains.
To manage FDI inflows and strengthen domestic linkages, Hung presented several recommendations.
First, transition FDI attraction policies from quantitative expansion to substantive depth. The state should enforce mandatory commitments requiring FIEs to establish clear timelines for training Vietnamese personnel to replace foreign labor within five years, while forming joint ventures and partnerships so Vietnamese firms can supply semi-finished products to value chains.
Second, activate an innovation mindset within the startup sector. International experience demonstrates that incumbent enterprises often possess high inertia and hesitate to dismantle legacy production lines.
So, momentum for overall productivity growth must originate from newly established enterprises willing to invest directly in modern technologies, software, automation, and AI applications. The state must reform institutions to facilitate rapid market entry alongside streamlined bankruptcy and exit procedures, creating flexible capital and labor cycles.
Third, mobilize idle domestic capital. Hung observed that domestic enterprises rely heavily on bank credit and family savings. Meanwhile, idle cash among citizens flows into hoarding channels such as gold or real estate.
Hung recommended that Vietnam synchronously develop its capital markets by establishing equity market, corporate bond market, and professional financial funds such as mutual funds and pension funds. Once domestic savings flow into production through transparent institutions, Vietnamese enterprises will possess sufficient resources to gradually solidify their position in global value chains.
Thu Ha