To prevent Ho Chi Minh City from getting 'trapped' in the urban development trap.

Urban development traps are impacting the region's economic performance, particularly job growth and wages. Specific policies are needed to help cities like Ho Chi Minh City escape these traps.

To overcome the middle-income trap, Ho Chi Minh City needs to address numerous challenges related to labor productivity, investment mobilization, and infrastructure improvement. - Photo: N. BINH

Professor Ron Boschma from Utrecht University (Netherlands) shared his insights at the 6th International Scientific Conference on Leadership and Public Policy (VSLP 2024), recently held in Ho Chi Minh City, on how Ho Chi Minh City can escape the urban development trap.

In his paper titled "Urban Development Traps: Experiences in Europe and Suggestions for Vietnam," he argued that Ho Chi Minh City needs strong investment in education , research, and institutional development. These investments could enable cities to shift from simple industries to high-tech and creative industries.

Where do the urban development traps come from?

According to Professor Ron Boschma, many countries are facing the middle-income trap and the urbanization trap. Simply imitating more developed countries without innovation, creativity, or finding their own path will make it very difficult for many regions to develop further.

Three types of urban development traps have been identified. Of these, the structural trap is the most serious, occurring when the relevance of industries and areas is average and their complexity is average to low. This leaves the area lacking opportunities for diversification and prone to stagnation.

Secondly, there is the low-complexity trap, which refers to a city or region with a high density of stakeholders but low complexity. Although there are many opportunities for development, they are mainly concentrated in low-complexity industries, limiting the ability to transition to more complex industries, thus reducing the potential for economic development and sustainable growth.

Finally, there is the low relevance density trap. Some areas have high complexity but low relevance density, leading to limitations in expanding into new fields. These areas have complex operations but cannot easily transition to other industries, resulting in poor flexibility and vulnerability.

This is explained by the fact that a city with multiple coexisting industries can promote regional growth through the sharing of knowledge and complementary capabilities. However, the reality is that some cities are limited to low-complexity industries and activities, reducing their potential for economic development and sustainable growth. This is a problem that Ho Chi Minh City has recognized and is addressing.

What should Ho Chi Minh City do?

Professor Ron Boschma emphasized the spillover effects of industries and the importance of linkages in regional economic development to promote urban development. So, what policies should Ho Chi Minh City, as the leading city in the Southeast region, choose to avoid falling into the "low complexity trap"?

Cities need to capitalize on opportunities to develop low-complexity activities. He noted the focus on "green" activities – those that may not require a high level of complexity but are trending towards sustainable development, such as green technology and renewable energy.

This could be a safe and practical step to help cities escape the low-complexity trap while still ensuring sustainability. Though rare, a few high-complexity opportunities do exist, and targeting these opportunities can create significant change.

Developing advanced industries and technologies can help the city create a foundation for higher-value industries, thereby attracting investment and highly skilled labor.

Mr. Boschma argued that strong investment in education, research, and institutional development is necessary. These are fundamental elements that help prepare the workforce and knowledge infrastructure for participation in more complex industries.

These investments can enable cities to shift from simple industries to high-tech and creative industries.

"This is not just a matter of economic development, but also a crucial step to avoid falling into a long-term economic stagnation due to a lack of diversity and innovation in the industrial ecosystem," the Dutch professor emphasized.

With the theme: "Building Regional Development Policies: International Experiences in Spatial Organization and Public Management," the VSLP 2024 international scientific conference attracted more than 40 scholars, experts, researchers, and policymakers from 12 countries to Ho Chi Minh City to exchange knowledge and expertise.

This is a scientific event organized by AVSE Global - the Global Organization of Vietnamese Scientists and Experts (France), the Ho Chi Minh National Academy of Politics, and the Regional Academy of Politics II, in collaboration with RMIT University Vietnam, City University of Hong Kong, and Audencia Business School (France).

Source: https://tuoitre.vn/de-tp-hcm-khong-mac-ket-trong-bay-phat-trien-do-thi-20241102125720591.htm