Stronger digital infrastructure, bigger startup funding and hi-tech FDI are serving to Vietnam reshape its progress model, however shortages of expert labour, low analysis and growth spending and cybersecurity dangers stay main hurdles.
Vietnam has in recent times accelerated nationwide digital transformation as a part of efforts to resume its progress model, enhance labour productiveness and strengthen financial competitiveness. The course of has been rolled out comparatively broadly, from state administration and digital infrastructure to enterprise operations and social life, creating an essential basis for the event of the digital economic system and digital society.
A key coverage milestone was the National Digital Transformation Programme by 2025, with orientations towards 2030, issued underneath Prime Minister Decision 749/QD-TTg dated June 3, 2020. The programme units out a broad agenda to develop digital authorities, digital economic system and digital society on the similar time, whereas constructing Vietnamese digital technology corporations able to competing globally.
Progress has been seen in digital authorities. Ministries, sectors and localities have expanded on-line public companies, digitised administrative information and utilized digital instruments of their state administration duties. National platforms such because the National Population Database, the National Public Service Portal, the digital identification app, and digital cost techniques are being upgraded to enhance governance, cut back paperwork and make public administration extra clear.
Vietnam’s digital infrastructure has additionally improved sharply. According to statistics of the Ministry of Information and Communications, now the Ministry of Science and Technology, 4G protection had reached about 99.8 per cent of the nation by 2025, greater than 82 per cent of households had fibre-optic Internet connections and round 88.7 per cent of cell subscribers used smartphones. The Digital Vietnam 2025 report mentioned the nation had about 79.8 million Internet customers originally of 2025, accounting for practically 79 per cent of the inhabitants.
This wider digital base is supporting e-commerce, digital finance, on-line schooling and technology-based companies. Vietnam can also be shifting towards broader 5G commercialisation, with main telecoms corporations rolling out companies and creating a home 5G technology ecosystem.
At the identical time, investment in information centres and cloud computing is rising as demand grows for information storage, processing and evaluation. Major technology firms are creating information centres and cloud platforms to assist digital transformation in each companies and state companies. Together, these adjustments are making digital infrastructure a core a part of a brand new investment model within the nation.
Investment strikes towards new progress drivers
Vietnam’s investment construction is altering, with extra capital flowing into high technology, innovation, startups and digital infrastructure.
The semiconductor business is among the many fastest-growing areas of curiosity. Vietnam is rising as a brand new hyperlink within the international semiconductor worth chain, helped by its geopolitical place, technical workforce and insurance policies to draw hi-tech investment. According to data launched at SEMI EXPO Vietnam 2025, the nation had greater than 170 FDI initiatives in semiconductors, with complete registered capital of practically USD 11.6 billion. These included about 60 chip-design enterprises, eight packaging and testing initiatives, and about 20 corporations supplying supplies and gear for the business.
Artificial intelligence (AI) is one other fast-rising subject. Vietnam is turning into a vacation spot for worldwide technology teams investing in AI and information infrastructure. Large corporations have invested in AI, massive information and cloud computing analysis centres to assist digital transformation. NVIDIA, for instance, has introduced plans to increase AI investment and set up an AI analysis centre in Vietnam, whereas strengthening cooperation to develop the home AI ecosystem.
Green technology can also be drawing extra capital. Domestic and overseas enterprises are investing in renewable power, inexperienced infrastructure, power conservation applied sciences and good manufacturing as they work towards net-zero emissions objectives. This factors to a gradual shift away from lower-value investment towards sectors that supply larger added worth and stronger environmental credentials.
Vietnam’s innovation ecosystem has grown rapidly, with stronger participation from the State, enterprises, universities, analysis institutes, investment funds and technology startups. The 2025 Global Innovation Index of the World Intellectual Property Organization confirmed Vietnam ranked forty fourth out of 139 economies and was among the many nations whose innovation efficiency exceeded expectations for his or her degree of growth.
The nation has additionally constructed a community of innovation centres and hi-tech parks, together with the Vietnam National Innovation Centre, the Hoa Lac Hi-Tech Park, the Ho Chi Minh City Hi-Tech Park, and AI and information centres in Hanoi, Da Nang and Ho Chi Minh City. Major technology firms resembling Samsung, Intel, NVIDIA and Qualcomm are increasing analysis and growth (R&D) actions in Vietnam. In 2025, Qualcomm opened an AI analysis centre within the nation to develop generative AI, agentic AI and AI purposes for smartphones, IoT and good autos.
The startup scene is increasing as effectively, particularly in fintech, AI, edtech, e-commerce, logistics and inexperienced technology. Vietnam is now amongst Southeast Asia’s three largest startup ecosystems by progress price, with greater than 4,000 startups in 2025. As launched by the Vietnam Innovation & Private Capital Report 2025, the nation’s digital economic system reached round USD 36 billion and continued to document double-digit progress, creating beneficial situations for technology startups.
Despite a decline within the international enterprise capital market, Vietnam has maintained its means to draw startup funding. The National Startup Support Center reported that disclosed enterprise capital invested in Vietnamese startups reached round USD 372 million within the first 9 months of 2024, with a stronger restoration anticipated in 2025-30.
Table 1. Investment in Vietnamese technology startups by sector in 2025
|
Sector |
Estimated investment (USD million) |
|---|---|
|
Fintech |
180 |
|
AI |
120 |
|
E-commerce |
140 |
|
Technological logistics |
75 |
|
Edtech |
40 |
|
GreenTech |
60 |
Source: Do Ventures: Vietnam Innovation and Private Capital Report 2025.
Investment in science, technology and innovation is growing in each scale and high quality, but a number of weaknesses stay. R&D spending as a share of GDP remains to be low, the innovation ecosystem will not be sufficiently linked, and home enterprises have restricted capability to guide in technology. Vietnam subsequently wants to boost investment in R&D, strengthen the position of companies in innovation and enhance the technology ecosystem.
Together with the event of digital economic system, FDI in Vietnam can also be shifting towards high technology and digital infrastructure. Instead of focusing primarily on labour-intensive industries as previously, overseas traders are giving larger precedence to electronics manufacturing, semiconductors, AI, information centres and different strategic technology sectors.
Samsung, Intel, NVIDIA and Apple present how Vietnam is gaining floor in international hi-tech provide chains. Samsung has made Vietnam its largest electronics manufacturing base worldwide, contributing greater than USD 306 billion to the nation’s export turnover in 2018-22, whereas the variety of Vietnamese corporations in its provide chain rose from 25 in 2014 to 257 by the tip of 2022. Intel is increasing cooperation in semiconductors, NVIDIA is growing investment in AI, information and computing infrastructure, and Apple has dedicated round USD 17 billion by greater than 70 manufacturing companions and 150 suppliers in Vietnam because it diversifies its international provide chain.
Initial positive factors from the brand new model
The new growth investment model is having a optimistic influence on the economic system. The clearest positive factors could be seen in labour productiveness, the digital economic system, innovation capability and nationwide competitiveness.
Digital transformation permits enterprises to use technology to manufacturing, administration, distribution and buyer care, serving to them reduce prices, shorten processing time and enhance productiveness. According to the Bureau of Statistics underneath the Ministry of Finance, labour productiveness throughout Vietnam’s economic system in 2025, at present costs, was estimated at VND 245 million per employee, equal to round USD 9,809.
The digital economic system is increasing rapidly. More capital is flowing into digital infrastructure, digital platforms, e-commerce, digital finance, digital logistics and on-line companies. As revealed within the e-Conomy SEA 2025 report by Google, Temasek and Bain & Company, Vietnam’s digital economic system is projected to achieve USD 39 billion in gross merchandise worth in 2025, up 17 per cent from the earlier yr. This would make it the second fastest-growing digital economic system in Southeast Asia. E-commerce is forecast to exceed USD 25 billion, whereas digital funds are anticipated to achieve USD 178 billion in transaction worth.
Innovation is gaining power too. Investment in AI, massive information, semiconductors, fintech and inexperienced technology helps drive Vietnam’s innovation ecosystem. As ranked by WIPO, Vietnam stood at forty fourth out of 139 economies within the 2025 Global Innovation Index and positioned second amongst lower-middle-income nations. The e-Conomy SEA 2025 report mentioned Vietnam had greater than 40 AI startups and attracted USD 123 million in AI from non-public investment over the earlier yr. It additionally mentioned 81 per cent of Vietnamese customers work together with AI on daily basis.
Vietnam is regularly shifting away from progress primarily based primarily on capital, low-cost labour and pure sources towards a model constructed on technology, information, expert employees and innovation. If sustained, this might assist the nation enhance its place in international worth chains, significantly in electronics, semiconductors, AI, e-commerce and digital companies.
Major challenges stay
Despite evident progress, Vietnam nonetheless faces important obstacles in renewing its growth investment model.
One of probably the most seen is the digital infrastructure hole between city and rural areas. According to UNESCO’s 2025 AI Readiness Assessment Report, about 96 per cent of villages and hamlets had fibre-optic web connections and 99 per cent had cell protection. However, the Internet utilization price was 84.7 per cent in city areas, in contrast with solely about 74 per cent in rural areas.
Data centres and computing infrastructure are concentrated primarily in Hanoi, Ho Chi Minh City and Da Nang. Many distant, mountainous and deprived localities nonetheless have restricted entry to trendy digital infrastructure. This divide impacts the flexibility of companies and folks to participate within the digital transformation.
The scarcity of high-quality technology employees is one other main barrier. As reported by VietnamWorks and TopDev in 2025, Vietnam confronted an annual scarcity of round 150,000-200,000 IT employees in the course of the 2022-25 interval, particularly in AI, massive information and cybersecurity. In 2025, demand for IT personnel reached about 700,000, exceeding the provision capability. UNESCO mentioned Vietnam had solely about 5,000 AI engineers, 7,000 AI specialists and round 500 energetic AI startups. Only round 27.2 per cent of the workforce had acquired formal coaching, with the speed a lot decrease in rural areas.
Table 2. Shortage of IT and AI human sources in Vietnam throughout 2022-25
|
Year |
Demand for IT human sources |
Human useful resource scarcity |
|---|---|---|
|
2022 |
530,000 |
150,000 |
|
2023 |
550,000 |
150,000 |
|
2024 |
650,000 |
170,000 |
|
2025 |
700,000 |
200,000 |
Source: TopDev: Vietnam IT Market Report 2025, Ho Chi Minh City.
Limited funding for R&D is one other downside. Although investment in technology analysis, growth and innovation has elevated, Vietnam nonetheless spends far much less on R&D than many nations within the area. According to UNESCO, Vietnam’s R&D spending in 2025 stood at round 0.52 per cent of GDP, far decrease than the Republic of Korea, at greater than 4 per cent, and China, at round 2.6 per cent.
The construction of R&D investment stays closely depending on the state sector. Sole proprietorships and home technology corporations have but to play a number one position in analysis, core technology growth and innovation.
Table 3. Structure of R&D investment capital in Vietnam in 2025
|
Investment supply |
Proportion (per cent) |
|---|---|
|
State funds |
54 |
|
Private enterprises |
34 |
|
FDI |
12 |
Source: Ministry of Science and Technology: Report on Science, Technology and Innovation in Vietnam in 2025, Hanoi, 2025.
The tempo of digital transformation additionally varies extensively amongst localities. Major financial centres resembling Hanoi, Ho Chi Minh City and Da Nang have a lot stronger digital infrastructure, technology expertise and innovation ecosystems than mountainous, distant and deprived provinces. According to UNDP and UNESCO studies in 2025, most AI infrastructure, information centres and hi-tech human sources have been gathered in Hanoi and Ho Chi Minh City, with about 82 per cent of AI specialists working within the two cities.
Cybersecurity dangers are rising because the economic system turns into extra digital. The National Cybersecurity Monitoring Centre mentioned Vietnam recorded greater than 9,500 cyberattacks in 2022, and the development has continued to extend alongside the growth of the digital economic system. By 2025, Vietnam’s cybersecurity market had reached round USD 297 million, pushed by rising demand for the safety of knowledge, cloud techniques, fintech and digital infrastructure.
Vietnam additionally stays closely depending on overseas technology teams for platforms, semiconductor chips, cloud computing and software program. This creates challenges for technological self-reliance, information safety and nationwide safety amid fiercer international technology competitors.
What Vietnam must do subsequent?
Vietnam’s transition to a growth investment model primarily based on science, technology and digital transformation remains to be at an early stage. To make the shift more practical, the nation wants coordinated motion on establishments, digital infrastructure, human sources, R&D and hi-tech FDI.
First, Vietnam ought to proceed enhancing its authorized framework to create a extra beneficial surroundings for innovation and digital economic system growth. Policy mechanisms must be secure, clear and predictable so that companies have stronger incentives to put money into high technology, digital transformation and R&D.
Innovation insurance policies also needs to be sharpened. These embody tax incentives for hi-tech enterprises, assist for revolutionary startups, enterprise capital growth and the commercialisation of analysis outcomes. The nation also needs to introduce a technology sandbox mechanism to permit new enterprise fashions and applied sciences to be examined underneath an applicable regulatory framework, particularly in fintech, AI, blockchain, digital banking and digital platforms.
Second, a stronger nationwide digital infrastructure is required. The nation ought to pace up nationwide 5G rollout to assist good business, AI, IoT, good logistics and the digital economic system. Investment in information centres and cloud computing also needs to be elevated to satisfy rising demand for information storage, processing and use. In addition, AI infrastructure, together with high-performance computing techniques, AI information platforms and AI analysis centres, ought to be developed.
Third, Vietnam ought to improve investment in science, technology and R&D. This is important for shifting from intensive growth to deeper, higher-value progress. The State ought to prioritise strategic technology sectors resembling AI, semiconductors, massive information, biotechnology, inexperienced power and cybersecurity, whereas encouraging the non-public sector to take a position extra in analysis, innovation and commercialisation of analysis outcomes. National innovation funds and monetary mechanisms for technology startups ought to be expanded to offer the innovation ecosystem stronger momentum.
Fourth, creating digital human sources is important. Training ought to be expanded in AI, massive information, information science, cybersecurity and digital technology. Digital expertise ought to be taught constantly throughout common schooling, vocational schooling and better schooling, whereas STEM schooling ought to be prioritised to enhance the long-term high quality of science and technology employees. Stronger hyperlinks between colleges and enterprises would assist be sure that coaching is aligned with the actual wants of the digital labour market.
Fifth, hyperlinks between the State, enterprises, universities and analysis institutes must be strengthened. The State ought to present strategic course and coverage mechanisms; enterprises ought to be on the centre of technology utility and commercialisation; and universities and analysis institutes ought to provide expert employees and scientific analysis. Innovation centres, hi-tech parks and interdisciplinary analysis networks might help promote technology switch and develop larger added-value technology merchandise.
Finally, Vietnam ought to make higher use of the restructuring of world provide chains to draw hi-tech FDI in semiconductors, AI, inexperienced technology and the digital economic system. Beyond investment incentives, the nation wants to enhance digital infrastructure, hi-tech expertise and the broader investment surroundings. Policies also needs to encourage technology switch, deeper hyperlinks with home enterprises and the event of native provide chains, serving to strengthen nationwide technological capability and cut back dependence on the FDI sector in the long term.-
Dr. Tran Thi Mai Hoa
By VLLF