Page 51 - ISC PROCEEDINGS 21.4

National Digital Transformation Program, Vietnam has oriented its development strategy
toward promoting the digital economy, green economy, and innovation-driven growth as
key pillars for long-term development. In this context, transitioning toward a growth
model based on productivity, technological advancement, and high-quality human capital
has become imperative. Such a transformation is essential to enhance the economy’s
capacity to absorb FDI spillovers, stimulate innovation, and ensure sustainable EG in the
new development era.
In this context, this study proposes some recommendations as follows:
First, selective attraction of FDI. In the context of digital economy development,
Vietnam’s FDI attraction policy needs to shift from a focus on the scale of capital inflows
to a more selective approach based on quality, technological content, and knowledge
spillovers. The government should prioritize FDI projects in digital technologies,
innovation, research and development (R&D), data centers, and smart manufacturing. In
addition, it is necessary to improve digital infrastructure and the legal framework for data
governance, cybersecurity, and intellectual property protection in order to create a
transparent and stable investment environment for high-tech investors. FDI incentive
policies should be tied to commitments on technology transfer, workforce training, and
linkages with domestic firms, thereby enhancing the economy’s absorptive capacity. At
the same time, comprehensive digitalization of administrative procedures will help
reduce transaction costs and strengthen Vietnam’s competitiveness in attracting high-
quality FDI in the long run. Moreover, FDI attraction policies should closely integrate
environmental criteria, prioritizing projects that adopt clean technologies, energy
efficiency, and low emissions in line with green growth and sustainable development
goals. The application of stringent environmental standards combined with investment
incentives will help Vietnam attract green FDI while avoiding the risk of becoming a
destination for polluting projects during its transition to the digital economy.
Second, improving labour quality. In the new context, enhancing labour quality is a
key prerequisite for transforming Vietnam’s growth model toward productivity-driven
development. Policies should shift from expanding labour quantity to developing skills,
particularly digital skills and technological adaptability. The government should establish a
national digital skills framework aligned with sector-specific needs, serving as a
foundation for vocational training, reskilling, and lifelong learning. In parallel, stronger
linkages between training institutions and enterprises are needed through demand-driven
training models and practice-oriented apprenticeships. Policies should also prioritize
reskilling workers in low-productivity sectors, enabling them to participate more
effectively in the digital economy. Furthermore, incentive mechanisms and co-financing
schemes for training should be implemented to encourage firms to invest in workforce
upskilling, thereby improving productivity and fostering sustainable growth.
Third, promoting innovation. To enable innovation to contribute more effectively to
EG, policies should focus on improving the quality and commercial viability of inventions
rather than merely increasing their quantity. The government should prioritize support
for R&D activities aligned with market demand, especially in digital technologies and
automation. At the same time, stronger linkages among research institutes, universities,
and enterprises should be promoted through the development of technology transfer
mechanisms and benefit-sharing arrangements for inventions. In addition, the state can
play a demand-creating role for innovation through public procurement and
commissioning of technological solutions to support digital transformation. Finally,

50