The Head of the Central Policy and Strategy Committee acknowledges that the growth model based on cheap labor is reaching its limits, and Vietnam faces the need to shift to an economy driven by technology, data, and innovation.
This information was shared by Mr. Nguyen Thanh Nghi, Head of the Central Policy and Strategy Committee, at the National Scientific Conference on the theme "Innovating the National Development Model Based on Science, Technology, Innovation, and Digital Transformation," held on May 26th in Hai Phong. The conference took place in the context of Vietnam developing the Project "Innovating the National Development Model Based on Science, Technology, Innovation, and Digital Transformation" to submit to the Central Committee.
According to Mr. Nghi, after nearly 40 years of reform, Vietnam's development model has helped the economy transform strongly. From an underdeveloped country, Vietnam is projected to have the 32nd largest GDP in the world by 2025, placing it among the top 15 countries with the largest trade volumes globally. However, the current growth model reveals many limitations, as it remains heavily reliant on capital, labor, and resource exploitation; productivity, quality, and competitiveness are still low; and the capacity for innovation and technological mastery remains limited.
Dr. Nguyen Thanh Nghi, Head of the Central Policy and Strategy Committee, spoke at the event. Photo: Le Tan
According to Dr. Nghi, in the context of the strong development of artificial intelligence, big data, cloud computing, and the Internet of Things, science and technology, innovation, and digital transformation are no longer just pure drivers of economic growth, but have become the foundation of national competitiveness, strategic autonomy, and development security. "This is not only an objective requirement, but also a strategic choice with decisive significance for the future development of the country," he said.
Quoting the views of General Secretary and President To Lam, Dr. Nghi stated that the country is facing a historical opportunity to enter the "era of national resurgence," requiring a fundamental change in the development model, with knowledge, technology, data, and Vietnamese people as the foundation.
Professor Nguyen Xuan Thang, Chairman of the Central Theoretical Council, emphasized the urgent need to establish a new development model with its own unique identity, centered on people. He noted that the growth, development, and socialist models of Vietnam should be approached as three concentric circles. Therefore, reforming the development model should not only focus on the economy, but also encompass a comprehensive reform of development thinking, leadership methods, national governance, and resource allocation.
According to Professor Thang, the new growth model should not only answer the question of how to achieve growth, but also address the question of what growth is for, who benefits from it, and what values it should adhere to. "The ultimate goal of development is not just GDP or growth rate, but also the quality of life, happiness, and development opportunities for the people," he said
Professor Nguyen Xuan Thang speaking at the event. Photo: Dam Thanh
From an international perspective, Ms. Francesca Nardini, Deputy Resident Representative of UNDP in Vietnam, noted that Vietnam has achieved "unprecedented" development achievements over the past three decades, maintaining high growth while lifting millions out of poverty. However, "Vietnam must enter a new phase of transformation, bringing the economy to a higher level of development," she said.
The UNDP representative pointed out the "missing middle" phenomenon, a serious shortage of medium-sized enterprises capable of driving growth. Small, medium, and micro-enterprises currently account for 96-97% of the total number of businesses but face significant resource limitations.
Citing the results of a 2025 survey by the World Bank, Ms. Nardini said that the level of technology application between FDI and domestic businesses still has a large gap. While pioneering corporations like FPT, Viettel, and Vingroup are doing well in bringing AI and new technologies to the market, SMEs lack the capacity to absorb and disseminate them throughout the economy.
Another major obstacle is the gap in research and development (R&D). Despite Vietnam's strong vision, investment in R&D currently remains below 1% of GDP, significantly lower than regional countries like Thailand, Malaysia, China, and South Korea. The goal of raising this rate to 2% of GDP is necessary, but she believes strategic investment is crucial, avoiding a scattered approach.
Ms. Francesca Nardini speaking at the event. Photo: Le Tan
To transform innovative ideas into actual productivity, the UNDP representative proposed three key solutions for Vietnam. Specifically: Enhancing domestic capacity by focusing on strongly supporting SMEs in applying technology; strengthening connections between domestic businesses and the FDI sector to participate more deeply in global value chains.
The second solution is the commercialization of technology, aiming to narrow the gap between research and the market; strengthening the intellectual property system; enhancing the role of universities and building a synchronized financial mechanism.
In the third group, Ms. Francesca Nardini noted the importance of ensuring foundational infrastructure, with a focus on modernizing the power grid in accordance with Resolution 70. The reason is that high-tech industries such as semiconductors and pharmaceuticals require a stable energy supply and cannot afford any interruptions.
According to Francesca Nardini, in the journey to a higher level of development, the ultimate goal should not be merely economic growth figures, but rather the welfare, safety, and quality of life of the people. This should be the "North Star" guiding the entire process of reforming Vietnam's development model.
Le Tan
Follow VNExpress