Productivity increases steadily but remains low
Over the past decade, despite the global economy going through many major shocks, Vietnam has maintained a steady productivity improvement momentum.
According to the General Statistics Office, in 2024, the labor productivity of the entire economy is estimated to reach 221.9 million VND/worker (equivalent to 9,182 USD/worker), an increase of 726 USD compared to 2023. The growth rate reached 5.88%, reflecting that growth quality has gradually relied more on technology, skills and innovation in production organization, instead of only increasing labor output as before.
Recently, reporting to the National Assembly, Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai said that the current growth model is still mainly based on capital and labor, while sustainable drivers such as innovation, science - technology and the knowledge economy are still weak, increasing the risk of falling into the middle-income trap.
Mr. Mai informed: According to the report, the average labor productivity in the period of 2021-2025 will increase by only 5.24%/year, significantly lower than the target of 6.5%.
On average, in the long term, in the period of 2016 - 2023, Vietnam's labor productivity will increase by about 5.6% per year - a high level in the Asian region and exceeding most ASEAN countries.
In mid-September 2025, the World Intellectual Property Organization (WIPO) held a ceremony to announce the Global Innovation Index (GII) report in Geneva. According to this report, Vietnam is one of the three countries (China, Vietnam, Ethiopia) with the fastest labor productivity growth rate in the period of 2014 - 2024.
The productivity picture from the industry shows that industry - construction and services are still the two main "pulls", while agriculture - despite shortening the gap - is still significantly lower than the average of the general region. The more obvious economic restructuring process towards industries with high added value is a positive signal, but it comes with the urgent need to innovate technology, standardize processes and improve governance capacity to avoid falling into the "productivity ceiling" of the processing - assembly model.
From a business perspective, the productivity gap between regions is still very large. The FDI sector has much higher productivity than the domestic private sector, while state-owned enterprises are struggling with governance. This difference stems from the level of technology, capital, and participation in the global value chain. Reducing that gap will be a "productivity seismic zone" in the next 5 - 10 years, when the private sector is increasingly playing a leading role in the GDP structure.
In order to create a policy foundation for the new period, the Government has issued a National Program on increasing labor productivity by 2030 (Decision 1305/QD-TTg, November 2023), identifying productivity as an important driving force for rapid and sustainable growth, focusing on improving institutions, improving human resource quality and promoting science - technology, innovation, digital transformation.
Need to shorten the productivity gap
According to the PPP method, in 2023, Vietnam's labor productivity will be only 11.2% of Singapore, 27% of South Korea, 28.6% of Japan, 36.2% of Malaysia and about 65% of Thailand. This gap is the "baseline" if Vietnam wants to rise to the group of high-income countries.
However, Vietnam's advantage is the productivity growth rate in the best group in Asia - an average of 5.6%/year in the period of 2016 - 2023 - significantly higher than Singapore, Malaysia or Thailand. That shows that "change-tching" space is completely feasible if the current speed is maintained, while shifting the focus to quality improvement factors: Technology innovation, increasing localization rate and increasing contribution of total factor productivity (TFP).
Target 8.5%/year: Big challenges but not impossible
In 2026, the Government sets a GDP growth target of 10% or more; GDP per capita of 5,400 - 5,500 USD; average CPI increase of about 4.5%; average social labor productivity increase of about 8%.
In the long term, the Document submitted to the 14th National Party Congress for the period 2026 - 2030 sets a target of increasing labor productivity by over 8.5%/year, TFP (tingtitive factor productivity) contributing more than 55% and the digital economy accounting for about 30% of GDP. That is an ambitious goal - and also a mandatory "break point" if Vietnam wants to break through in per capita income.
To grow from 5.6% to 8.5%/year, the economy needs to make a breakthrough in terms of institutions, infrastructure and human resources. Instead of expanding traditional input, we must shift to growth based on innovation, technology and governance. Investment needs to be effective, selecting projects with spillover effects, while restructuring labor and training digital skills according to business needs.
The core of this process is digital transformation and innovation. When businesses master data, manage production in real time, combine smart automation and international standards, productivity will not only increase, but also create new competitiveness.
According to Dr. Nguyen Tung Lam - Director of the Vietnam Productivity Institute: "It is necessary to evaluate, classify and establish appropriate support programs to improve business productivity, develop productivity experts, improve governance capacity, train skills, support loans, and innovate technology. Enterprises need to proactively improve their capacity to meet the trend of sustainable development, green transformation, digital transformation to be able to participate in the global supply chain".
Experts also believe that infrastructure is also a "leverage" of productivity. Investing in digital infrastructure (cloud, 5G/6G, data center), cross-regional logistics and clean energy not only reduces production and circulation costs but also facilitates automation. Every penny invested in digital infrastructure or green energy directly contributes to national productivity.
And above all, human resources are the backbone. Vietnam is implementing a national digital skills framework for key industries such as electronics, semiconductors, materials, digital biology, logistics, information security, etc. "Putting up goods" between businesses and vocational schools, along with standardizing skills assessment, will help reduce the supply-demand gap, turning training into a real driving force for productivity.
Increasing labor productivity is not a story of an industry, a business or a year of planning. It is a comprehensive reform - from the leadership thinking to the way of doing things of each worker.
If that can be done, the goal of GDP increasing by an average of 10%/year and labor productivity above 8.5%/year will be feasible, becoming a new endogenous capacity of the economy. Vietnam can completely shorten the productivity gap, escape the "middle-income trap", and move forward firmly on the path to becoming a high-income country by 2045.
