At last week’s conference on science, technology, innovation, and human resources, Minister of Information and Communications Nguyen Manh Hung said that growth by traditional drivers had gradually reached its limit. Vietnam’s economy can grow up to 7 per cent by traditional drivers, but finding new drivers is essential for the higher growth rate, which can only come from these areas.

“Agriculture has helped Vietnam escape poverty. Foreign investment, and industrial development have enabled the country to become an upper middle-income country. To become a high-income country, we must rely on science and technology, innovation, and digital transformation. These three factors are the main drivers to develop modern productive forces, perfect production relations, innovate national governance methods, develop the socioeconomic landscape and become rich,” he said.

According to Hung, science and technology would contribute to the country’s economic growth if research outcomes could be commercialised. So these outcomes, funded by state budget, should be owned by research institutions.

“To stimulate the creativity, scientists and engineers should enjoy about 30-50 per cent of commercialised gains, while the state can benefit from taxes and jobs after research results commercialised and generating revenue and profit,” he said.

Hung proposed that the state accept risks in research, along with risk management solutions, such as budget allocation and management of research results by stage, classification, and risk levels. “We can change awareness and the way of doing very soon, right in the first half of this year, by amending the Law on Science and Technology and other relevant legislation,” he said.

Minister of Science and Technology Huynh Thanh Dat emphasised removing difficulties in sci-tech and innovation activities to submit in the draft decree to the National Assembly for approval at this month’s meeting, including piloting policies related to assets formed from research using the state budget, and policies for developing the market.

“The law is being revised to institutionalise the Party’s policies. Moreover, a decree including content on innovation and creative startups is being built to create a legal basis for the establishment and strong development of innovation centres and organisations, supporting innovation and creative startups in application, technology transfer, and innovation. These will be submitted to the government in the first quarter,” Dat said.

The Ministry of Information and Communications has proposed the appointment of contractors and shortening the process of digital transformation projects.

“The state should assign tasks and place orders to master strategic technologies and large digital transformation projects, increase the budget for hiring IT services, develop a cloud computing centre exclusively to support such a transformation at authorities, build a high-performance AI computing centre, and fund 30 per cent of the first semiconductor factory in Vietnam,” Hung said.

Minister of Finance Nguyen Van Thang proposed to amend the Law on Science and Technology and stipulate that the Ministry of Finance (MoF) allocates enough state budget for this.

“Based on the total assigned budget, the Ministry of Science and Technology (MoST) and related authorities at all levels develop a plan for budget allocation, management, use, and expense, ensuring compliance with the goals and orientations for this development,” Thang said. “We should strengthen decentralisation, autonomy and responsibility to research organisations in reviewing, approving and using the state budget for sci-tech and innovation.”

The MoF is working with the MoST in drafting a resolution of the National Assembly on pilot policies for related spending. The MoF is reviewing and proposing amendments to the Law on the State Budget that will collect comments and proposals of relevant ministries and agencies on financial mobilisation and the budget.

The MoF is submitting revised documents for the Law on Corporate Income Tax, and Personal Income Tax, including proposals for corporate income tax incentives for investment in small and medium-sized technical and service facilities, incubators, and personal income tax incentives for high-tech employees.

“We will build tax sandboxes, allowing testing of new, more flexible tax policies to support development, regularly reviewing, updating, and adjusting tax policies to suit the development of sci-tech and digital transformation,” Minister Thang said.

According to the MoF, the state budget allocation for 2021-2025 for innovation and the digital transition is allocated with integrated funding from different sources. However, spending in this area is still modest, at 1.39 per cent in 2023, 1.97 per cent in 2024, and expected to reach 2 per cent this year.

Moreover, the current state budget spending on sci-tech is noted in many laws, including the Law on Science and Technology, the Law on the State Budget, the Law on Public Investment. The regulations on spending are also inconsistent, causing difficulties in arranging and allocating capital sources, and settling projects.

Source: Vietnam Investment Review