Unlocking private investment in science, technology, and innovation development in Viet Nam
Published on 10/12/2022
Ha Noi, 10 December 2022 - The Ministry of Science and Technology in Viet Nam, UNDP in Viet Nam, and UNDP SDG Impact co-hosted a conference in Ha Noi today with policymakers, experts, investors, and businesses to explore barriers and opportunities to unlock private investment to accelerate the development of science and technology (sci-tech) and innovation in Viet Nam.
Viet Nam has enjoyed over three decades of uninterrupted economic growth to become a popular destination for private investors. However, socio-economic challenges remain, and the impact of the COVID-19 pandemic has slowed progress. Private capital and blended finance investments will continue to be an important component to Viet Nam’s sustainable development.
Against this backdrop, the Government of Viet Nam has made a strong commitment to meet the Sustainable Development Goals (SDGs) by the 2030 Agenda through its National Action Plan 2030. Sci-tech and innovation are considered among the main drivers for socio-economic development in the country, as indicated in many regulatory documents, and are key enablers for achieving the SDGs.
However, Viet Nam’s public and private investment into science and technologies is relatively low compared to the global average. At less than half a percent of GDP, investment rates are almost five times lower than the average sci-tech investment rate of 2.23%.
Unlocking private capital requires robust market intelligence and strong investment relationships. Participants in the conference shared good international practices to attract private investment in sci-tech and innovation development, exchanged insights around SDG investment areas in Viet Nam, as well as existing and potential barriers that need to be overcome when investing in sci-tech and innovation with the aim of generating greater impact to society, environment, and economy.
During the conference, the Viet Nam SDG Investor Map (the Map) was launched to provide policymakers, investors, and relevant stakeholders with market intelligence to direct their capital and activity towards SDG-aligned investment themes and business models, known as Investment Opportunity Areas (IOAs). This serves as a basis for Viet Nam to invest in SDG-priority areas to generate profit and consider environmental and social outcomes. The Map was made possible with support from the Centre for Impact Investing and Practices (CIIP), UNDP SDG Impact’s anchor partner in the ASEAN region. CIIP is a non-profit centre established by Temasek Trust.
The Map will be used to guide the private sector to where funding is needed most within the country, and they are encouraged to apply sci-tech innovation and efforts to realize the IOAs. Using UNDP SDG Impact’s robust methodology, the Map has identified 14 IOAs across 6 SDG priority sectors that require funding, and match the Government’s policies, including Education, Healthcare, Food & Beverages, Infrastructure, Renewable Energy and Financial Services.
The Map also identified 7 white spaces which are IOAs that have growth potential and are aligned with the national development needs, but where Government policies can go further to foster private sector investment participation.
To accelerate private investment in sci-tech and innovation development, the Ministry of Science and Technology in Viet Nam, UNDP Viet Nam and its partners will facilitate dialogues among ministries, investors, academia, experts, and businesses to identify solutions to overcome existing barriers and contribute to the development of sci-tech and innovation in Viet Nam.
The market intelligence from the Map is freely available on the SDG Investor Platform.
Mr. Huynh Thanh Dat, Minister of Science and Technology in Viet Nam, said, “Private investment for science, technology, and innovation has been recently increasing versus public investment and regulatory framework is being strengthened. However, the number of businesses investing in R&D and innovation is relatively low and the usage of sci-tech development fund within businesses is modest. Unlocking private investment in sci-tech and innovation development towards sustainable development goals is vital to booster socio-economic development in Viet Nam”
Ms. Ramla Khalidi, UNDP Resident Representative in Viet Nam, appreciated the strong commitment of the Vietnamese Government in strengthening financial sources to develop science, technology, and innovation, and said that the launch of the Map would contribute to this effort.
She offered recommendations on financing science and technology: “First, it will be important to nurture the development of the enterprise sector by promoting state-owned enterprise reforms that strengthen the overall business investment environment in terms of competition, access to finance, and administrative requirements,” she said. “A suitably adapted public–private partnership pilot program for R&D and innovation could help focus and leverage resources, and improve cooperation between public research and business actors, including foreign firms. And finally, to encourage enterprises of all types of ownership to invest in Science and Technology, especially in hi-tech and creative industries and their supporting industries, a range of tax incentives and disincentives should be used to steer investment capital, from both domestic and foreign sources, into these priority areas”.
Ms. Dawn Chan, CEO of CIIP, said, “The Viet Nam SDG Investor Map provides critical market intelligence for those looking to invest sustainably in the country. CIIP was set up by Temasek Trust with the belief that impact investing can act as an effective lever for achieving sustainability. We are pleased to support the development of Viet Nam’s Map, an important tool that can be used by private and public sector actors to direct capital to areas of high impact and contribute towards the achievement of the SDGs in Viet Nam. Together with UNDP and the Ministry of Science and Technology in Viet Nam, we look forward to creating further opportunities for collaboration to drive sustainable investment in Viet Nam.”
Ms. Fabienne Michaux, Director of SDG Impact, concluded, “We are pleased to support the Government of Viet Nam in their herculean efforts to accelerate its nation’s development to achieve the SDG 2030 Agenda. The private sector will be a big part of the transformation and the Viet Nam SDG Investor Map aims to make it easier for investors to identify and therefore allocate capital to the sectors that will have the most impact.”
Overview of Viet Nam Investment Opportunities Areas (IOAs) Identified by the SDG Investor Map: