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| For decades, Vietnam has been home to low-cost manufacturing and cheap labor. (Source: Forbes) |
However, in recent years, the Government and the private sector have made a strong push to attract the best talent in an ongoing effort to turn Vietnam into a regional technology manufacturing hub. This has attracted the attention of many global technology “giants”, many of which have increased their investment in Vietnam’s high-tech sectors.
In December 2022, Samsung opened a $220 million research and development (R&D) center in the capital Hanoi – the group’s largest in Southeast Asia. Almost all employees at the facility are Vietnamese tech talent who graduated from the country’s top universities. Based on the latest figures, more than half of Samsung Electronics’ smartphones shipped to the world are made in Vietnam.
In the first half of this year alone, several big names have announced major plans to grow their presence in Vietnam.
Apple supplier BOE Technology Group said it will invest $400 million to build two factories in Vietnam, while US semiconductor company Marvell Technology will set up an integrated circuit design center in Ho Chi Minh City – the country’s economic hub.
LG Electronics plans to expand its research and development (R&D) operations in Vietnam to bolster its growing electric vehicle parts business. In August 2022, US aircraft manufacturer Boeing held the Vietnam Aerospace Industry Forum in Vietnam, primarily to seek local suppliers to join its global aerospace supply chain.
Industry observers say that besides providing internship programs, scholarships and training to boost Vietnam's workforce to fill thousands of available jobs, these multinational companies and their growing presence will boost the supporting industries of these high-tech sectors.
This, in turn, will benefit the growth of Vietnam’s cutting-edge tech startups – the next generation of innovative businesses – after decades of adopting foreign technology in industries such as electronics and mechanics.
Touchstone Partners, an early-stage venture capital (VC) firm in Vietnam, wants to invest more in these startups. Touchstone has funded companies such as Singapore-Vietnam startup Forte Biotech, e-scooter maker Selex, and autonomous delivery robot developer Alpha Asimov.
Paul Kallmes, an intellectual property (IP) expert from Silicon Valley, said the large foreign investment in Vietnam means the country must work hard to maintain its favorable environment and growing reputation.
In April 2023, he visited Vietnam to train and mentor researchers and scientists participating in the Lab2Market talent incubation program. He assessed: “The quality of design and manufacturing in Vietnam is truly outstanding. From smart robotic grippers to electric motorbikes to medical devices, there is a lot of design and manufacturing capacity, much of it done on a relatively tight budget.”
Ms. Jen Vu Huong, Lab2Market program manager, noted that the Vietnamese government has identified innovation, science and technology as key growth drivers of the economy, with the hope that Vietnam will become a high-income country by 2045.
“An innovation-driven economy means we need to focus more on developing new IP, on producing knowledge-intensive products for export,” she said. Meanwhile, an expert from Touchstone Partners said Vietnam’s large talent pool in the field of Stem (science, technology, engineering and mathematics) and strong entrepreneurial spirit will pave the way for the next wave of homegrown tech solutions.
For their part, some Vietnamese corporations have also taken steps to build deep technology capabilities through open innovation efforts. In 2020, Becamex IDC Corporation - Vietnam's leading industrial park and urban development corporation - partnered with Singapore's NUS Enterprise to launch Block 71 Saigon - a technology-focused and globally connected ecosystem builder that catalyzes and brings together the startup community.
A year later, Imex Pan Pacific Group cooperated with Ho Chi Minh City National University to establish a 32 billion VND Robotics and Artificial Intelligence Center in the University's information technology park.
“In a mature ecosystem, there will be a strong connection between universities, research labs, venture capital funds and private funding sources. Once this ecosystem is built, more companies will be interested in investing in the R&D stage of startups in the field of deep technology and hardware. This will benefit the industry and their own businesses,” said an expert from Touchstone Partners.
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