Former head of the Central Institute for Economic Management (CIEM) Dr. Le Dang Doanh has said Vietnamese businesses are only investing a paltry 0.02% of their total profits in science and technology, stunting their competitiveness.
Vietnamese businesses are only investing a paltry 0.02% of their total profits in science and technology
He made the comments at a recent seminar in Hanoi on developing the private sector.
Doanh made the comparison with South Korean firms, which invest up to 40%.
Vietnam’s annual state budget spending for science and technology is also low. A report from the State Audit showed that spending in the sector only accounted for 1.36% of the state budget in 2014, lower than the set target by the National Assembly of 2%.
In the first nine months of this year, the state budget spending for science and technology was only VND215 billion, 30 times lower than that for the transport and agricultural sectors.
The Science and Technology Law 2013 stipulated that each company must spend 3%-10% of their total profits on technological development.
However, only a small number of Vietnamese companies can do this as many of them are small-scaled with modest profits. Meanwhile, state-owned science and technology centres operate ineffectively, failing to provide companies with what they really need.
"It's time for Vietnamese firms to focus on products with added values from the technological development, instead of depending on cheap labour and land rental advantages or relationship with authorities," Doanh said.
