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limited secure-sharing mechanisms. Without a national AI data platform, AI tools are
confined to narrow, siloed applications that cannot generate the systemic TFP multipliers
observed in more data-integrated economies. The updated National AI Strategy (2025)
explicitly frames the national AI supercomputing center and open data platform as
strategic infrastructure investments analogous to electricity networks. ERIA (2023)
similarly notes that Vietnamese firms need comprehensive support across all stages of
digital transformation, including data management and interoperability standards.
Institutional and regulatory gaps form the third constraint, though one now being
rapidly addressed. The previous absence of a coherent AI legal framework, with AI-
relevant provisions scattered across dozens of laws, created investment uncertainty that
inhibited large-scale AI transformation and constituted a documented barrier to AI-sector
FDI (Tilleke, 2025). Vietnam's first AI Law (Law No. 134/2025/QH15, effective March 1,
2026), built around six core principles, risk-based regulation, transparency, human-centric
development, domestic AI autonomy, sustainable growth, and digital sovereignty, directly
addresses this gap by providing the legal certainty that large-scale, TFP-generating AI
investment requires.
4.4. Opportunities, challenges, and the transformative policy environment (2024-
2026)
Vietnam's AI-productivity trajectory is shaped by a constellation of structural
opportunities and systemic challenges that must be analyzed simultaneously.
On the opportunity side, four structural advantages create genuinely favorable
conditions for AI-led TFP acceleration toward 2030. First, Vietnam's young, digitally
engaged population, exhibiting Southeast Asia's highest AI interaction rates (81% daily,
83% actively upskilling), constitutes a uniquely fertile environment for AI-augmented
productivity growth, provided skills gaps are addressed (Google, Temasek, & Bain &
Company, 2025). Second, strategic industrial repositioning toward semiconductor design
and advanced manufacturing, evidenced by 170+ foreign-invested semiconductor
projects worth USD 11.6 billion including Intel, Amkor, and Hana Micron (VNA, 2025a),
creates upstream conditions for domestically generated AI innovation and TFP-enhancing
technology transfer. Third, Politburo Resolution No. 57-NQ/TW (December 22, 2024)
establishes an unprecedented policy commitment: science, technology, innovation, and
digital transformation are declared the foremost critical breakthrough and primary driving
force for modern productive forces, with mandated minimum 15% of state science
budget for strategic technology research, a Strategic Industry Development Investment
Fund prioritizing AI, semiconductors, quantum technology, and robotics, and regulatory
sandbox mechanisms for strategic technology R&D. Vietnam's 2026 budget allocation of
VND 95 trillion (USD 3.6 billion) for science, technology, and digital transformation is
historically unprecedented (Hanoi Times, 2025). Fourth, the National Assembly's 2026
socio-economic targets, GDP growth of at least 10% and labor productivity growth of
8.5%, create an accountability framework that makes AI-TFP contribution measurable and
politically salient.
The principal challenges involve: (1) the risk of AI-driven labor market disruption in
informal sectors and agricultural communities where 61% of workers lack adequate social
protection against displacement; (2) widening productivity gaps between large AI-capable
enterprises and the 97% of businesses that are SMEs with limited AI investment capacity;
(3) geopolitical uncertainty around AI supply chains, particularly semiconductor access
restrictions and AI data infrastructure security; and (4) the institutional bandwidth

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