Background
Industrialization is a transformative process that shifts an economy from agriculture to industry and services, aiming to enhance labor productivity and comprehensively modernize socio-economic life. For Vietnam, industrialization is not merely an economic goal - it is a strategic pathway toward becoming a developed nation. This vision was firmly established in the Resolution of the 7th National Congress of the Communist Party of Vietnam (1991), which set the direction for building a modern industrial country, prioritizing high-tech sectors, high value-added industries, and strengthening international competitiveness.
Starting from the position of a less developed country, Vietnam has made remarkable progress in socio-economic development through its Đổi mới process and industrialization efforts. A key driver of this transformation has been foreign direct investment (FDI). Since its introduction in 1987, FDI has become a vital resource, bringing not only capital but also advanced technology, managerial expertise, employment opportunities, and expanded export markets. These contributions have enabled Vietnam to integrate more deeply into global value chains (GVCs).
Key Findings from the Research
🔹 FDI is a major growth driver: Contributed over 22% of GDP (2021–2023) and dominated 70–79% of exports annually.
🔹 FDI boosts industrial capacity: Though only 8% of manufacturing firms, FDI accounts for 56% of capital, 62% of revenue, and 60% of employment.
🔹 High-tech shift: Electronics FDI rose from 4.1% (2010) to 17.8% (2024). New hubs like Bac Ninh & Hai Phong attract global giants (Samsung, LG, Foxconn).
🔹 Job creation: FDI jobs doubled from 2.1M (2011) to 5.3M (2023), with 80% in rural areas, helping reduce inequality.
🔹 Green energy leadership: FDI drives renewable energy with landmark projects like Lego’s $1B carbon-neutral plant.
🔹 Challenges remain:
Low localization rates (e.g., electronics: 5–10% real value created in VN)
Weak tech spillovers & domestic linkages
Risk of “pollution paradise” due to lax environmental enforcement
🔹 Policy shift needed: From attracting FDI at all costs to quality-driven, conditional incentives focused on R&D, tech transfer, and skilled labor.
The full report is written in Vietnamese, with an executive summary available in English.
