Switching from capital attraction to technology attraction
Resolution No. 10-NQ/TW on economic development with foreign investment capital just issued by the Politburo has set a target of attracting about 200-300 billion USD of registered FDI capital in the period 2026-2030.
According to Mr. Su Ngoc Khuong - Senior Director of Investment Consulting Department of Savills Vietnam, the most notable point of Resolution 10 is to reposition the role of the FDI sector in the national economic development strategy.
He assessed that the Resolution marks a shift from capital attraction thinking to national competitiveness building thinking. The core value is not in the goal of attracting 200-300 billion USD of registered FDI capital, but in shaping a growth model based on technology, knowledge and innovation.
In the coming period, the question is no longer how much FDI Vietnam will attract, but how much technology, how much knowledge and how much added value for the economy will be attracted" - Mr. Khuong said.
According to Savills, this is the first time the development orientation of the FDI sector has been placed in the context of improving national productivity and transforming the growth model. This shows the determination to bring Vietnam from its traditional manufacturing destination to become a center for innovation and strategic resource allocation in the region.
Investors today not only consider tax incentives or production costs, but are increasingly interested in the transparency of the investment environment, policy forecasting capacity, law enforcement effectiveness, level of property rights protection and quality of national governance.
According to Mr. Khuong, the sustainable competitive advantage of an economy is no longer in the level of incentives higher than competitors, but in the ability to build investor confidence through the stability of policies, consistency in implementation and effective mechanisms to protect the legitimate rights of businesses.
This is also the reason why commitments on intellectual property rights protection, property rights, investment capital protection and the principle of not applying retroactivity in a direction disadvantageous to businesses in Resolution 10 have received great attention from the international investment community.
Another highlight is the priority orientation to attract fields that create long-term productivity such as semiconductor, artificial intelligence (AI), big data, cloud computing, biotechnology, energy technology, modern logistics and many other high-tech industries. Vietnam also aims to attract research and development (R&D) centers, data centers, innovation centers, regional operations centers and shared services of multinational corporations.
According to Mr. Khuong, this orientation reflects Vietnam's ambition to enhance its position in the global value chain, as added value will focus more on research, design, data management, product development and innovation instead of just manufacturing and assembling.
Vietnamese businesses must be capable
In addition to attracting high technology, Resolution 10 also sets a target that by 2030, about 10,000 Vietnamese businesses will participate in the value chain and supply chain of the FDI sector. This is an important condition to improve internal competitiveness and gradually reduce dependence on labor cost advantages.
Mr. Tran Thanh Trong - Chairman of the Board of Directors cum CEO of Sang Ban Mai Company, a delegate of the Ho Chi Minh City People's Council - said that the Resolution has concretized the view of not attracting FDI at all costs. Prioritized projects must belong to high-tech fields and meet the requirements for localization rates, including using domestic raw materials and developing domestic supply chains.
According to him, to put this policy into practice, it is necessary to legalize and quantify specific criteria such as the rate of using domestic suppliers or the rate of raw materials produced in Vietnam for each FDI project. Only when there are clear quantitative regulations can it create a spillover effect and expand opportunities for Vietnamese businesses to participate in the supply chain.
Mr. Trong said that for a long time, FDI enterprises have mainly linked with their existing supplier ecosystem, making it very difficult for domestic enterprises to participate in the production chain. Therefore, the business community expects new FDI projects to have clear commitments on using domestic resources, technology transfer and developing domestic supply chains.
Agreeing with this view, Mr. Nguyen Ngoc Hoa - Chairman of the Ho Chi Minh City Business Association - said that the State needs to change the criteria for evaluating the effectiveness of FDI attraction. Previously, the main focus was the number of projects and the scale of investment capital, but in the new phase, capital is no longer the only decisive factor.
According to Mr. Hoa, what needs to be aimed at is technology, market and technology transfer roadmap. If only chasing after capital scale, Vietnam will continue to play the role of processing with low added value. Therefore, it is necessary to shift from attracting FDI in quantity to quality.
He also emphasized that technology transfer is only effective when Vietnamese businesses have sufficient capacity to receive it. Therefore, along with requiring foreign investors to commit to technology transfer according to a roadmap, domestic businesses must also improve management capacity, human resource quality and technology level to be able to participate more deeply in the global value chain. When both sides change, the goal of improving the quality of FDI capital flows can become a reality.
