Can Vietnam become a country with many potential ‘silicon valleys’?

Vietnam has many favorable factors to develop potential silicon valleys. 

• Human resources: Vietnam has a young, populous and well-educated population. According to the Organization for Economic Cooperation and Development (OECD), Vietnam ranked eighth in the world in the PISA test results on mathematics, science and reading comprehension in 2018. Vietnam also has about 290,000 graduates in information technology every year. In addition, there is a large community of overseas Vietnamese with rich experience in high technology, who can contribute to knowledge transfer and connect with international markets. 
• Economy: It is one of the countries with high and stable economic growth in the region and the world. Vietnam is also one of the countries with a high level of economic integration, participating in many free trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam - European Union Free Trade Agreement (EVFTA) or the Regional Comprehensive Economic Partnership (RCEP). GDP growth in the second quarter of 2023 reached 4.14% compared to the same period, higher than 0.86 percentage points compared to the growth rate of 3.28% of the first quarter of 2023.
• Startup ecosystem: Vietnam has a vibrant and developing startup ecosystem. According to a report by Google, Temasek and Bain & Company, there were more than 3,000 startups in 2023, three times more than in 2015. Vietnam also has many successful and potential startups, such as VNG, VNPAY, VNPay, MoMo, Sendo, Tiki, Yeah1 or VinFast 10. Vietnam also attracted a lot of investment capital for startups, with a total transaction value of over 2 billion USD in the period of 2020 - 2022, up 16% compared to 2019. 
• International cooperation: Vietnam has good relations with many countries and international organizations in the field of high technology. It has signed many cooperation agreements on science and technology with partners such as the United States, Japan, South Korea, China, the European Union or ASEAN. Vietnam is also a member of international organizations related to high technology, such as the World Intellectual Property Organization (WIPO), the Organization for Economic Cooperation and Development (OECD) or the Asia-Pacific Economic Cooperation Forum (APEC). Vietnam is also a destination for many large technology companies in the world, such as Samsung, Intel, LG, Panasonic or Microsoft. 
• Innovation policies: Vietnam has issued and implemented many policies to promote innovation in the fields of science and technology. Some typical policies are the Strategy for Science and Technology Development for the period 2011-2020; the Strategy for Science and Technology Development for the period 2021-2030; the Strategy for Smart Industry Development for the period 2019-2030; the National Digital Development Strategy for the period 2021-2030; the Law on Encouraging Small and Medium Enterprises; the Law on Supporting Creative Startup Enterprises.

Vietnam is also facing many challenges and difficulties in building potential silicon valleys. 

• Human resource quality: Despite having a large and well-trained human resource, Vietnam still lacks high-quality human resources, especially those with creative, management and access skills to the latest technologies. According to the report of the Ministry of Labor - Invalids and Social Affairs, Vietnam only has about 9,000 high-tech experts, accounting for 0.06% of the total labor force. Vietnam also faces difficulties in attracting and retaining talented people in the field of high technology, due to the fierce competition from other countries and the lack of attractive policies. 
• Economy: With high and stable economic growth, Vietnam is still a low-income country, with GDP per capita of only 4,400 USD in 2023. It also depends heavily on exports of goods, especially low-value-added goods, such as textiles, footwear, electronics assembly. 
• Startup ecosystem: Although having a vibrant and developing startup ecosystem, Vietnam still lacks important factors to create successful and sustainable high-tech startups. According to the report of Startup Link, Vietnam ranked 59th out of 100 countries/economies with the best startup ecosystem in the world in 2020. Vietnam also lacks infrastructure for startup activities, such as areas dedicated to startups, centers for authorization and technical support, non-governmental and nonprofit organizations. Vietnam also does not have a developed venture capital market, with a total transaction value of only 0.03% of GDP in 2022. 
• International cooperation: Although having good relations with many countries and international organizations in the field of high technology, Vietnam still faces many barriers in cooperating and exchanging with foreign partners. Some barriers are language, culture, legal and political. Vietnam also does not have many opportunities to participate in international networks on high technology, such as alliances, associations, forums or events. 
• Innovation policies: Although having issued and implemented many policies to promote innovation in the fields of science and technology, Vietnam still has many limitations in implementing and monitoring these policies. Some limitations are lack of transparency, consistency and effectiveness in allocating and using resources for science and technology activities; lack of adaptability and update with international trends and standards; lack of coordination and participation of stakeholders, such as enterprises, universities, research institutes, communities and individuals.

From the strengths and weaknesses analyzed, it can be seen that Vietnam has the potential to become a country with many potential silicon valleys. However, to achieve these goals, businesses in this country will face a lot of competition in the future. But there is a high possibility that in the future Vietnam will become one of the silicon valleys of the world. 

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