The three engines behind Việt Nam's future growth: expert

The three engines behind Việt Nam's future growth: expert

Việt Nam's next growth model should be built on three interconnected engines – next-generation industrialisation, smart urbanisation and deeper global integration – with AI and innovation serving as key enablers, economist Nguyễn Bích Lâm says.

Nguyễn Bích Lâm, former Director General of the National Statistics Office.

As artificial intelligence (AI), green transformation and the restructuring of global value chains reshape the world economy, Việt Nam needs to build a smart economic model powered by three main growth engines: next-generation industrialisation, smart urbanisation and deeper integration into global value chains.

According to economist Nguyễn Bích Lâm, former Director General of the National Statistics Office, AI, data and innovation will provide the momentum needed to drive this transformation.

Why are next-generation industrialisation, smart urbanisation and global value chain integration critical to Việt Nam's growth?

Next-generation industrialisation is built on advanced technologies, AI, automation, smart manufacturing and innovation. Its goal is not simply to expand production capacity but, more importantly, to raise productivity and increase value added across the economy.

Smart urbanisation should transform cities from population centres into hubs of innovation, high-quality services, the digital economy and green growth.

Meanwhile, deeper participation in global value chains should help move the economy beyond contract manufacturing towards higher-value activities such as research and development, design, logistics, branding and technology services.

The key is to connect these three drivers in a coherent way so that they reinforce one another. Industrialisation alone, without smart urbanisation and stronger domestic enterprises, will not deliver major gains in productivity or national competitiveness.

A new growth model also requires a supportive ecosystem. Việt Nam needs to build what I call a ‘purpose-driven development ecosystem’ to provide the foundation for a transition to a smart economy.

The concept of a ‘purpose-driven development ecosystem’ has recently gained attention. What does it mean and how does it differ from a spontaneous development model?

A purpose-driven development ecosystem is one in which a country clearly defines its position in global value chains, identifies the technologies it wants to master and determines the competitive advantages it aims to build.

Institutions, policies, financing mechanisms, workforce training and infrastructure are then designed to support those objectives.

If a spontaneous ecosystem represents growth driven by inertia, a purpose-driven ecosystem represents growth guided by deliberate design.

At its core, such an ecosystem aligns the key components of the economy – institutions, businesses, capital markets, human resources, science and technology, physical infrastructure and digital infrastructure – so they interact and reinforce one another according to clearly defined priorities.

Unlike spontaneous systems, where resources are fragmented and often driven by short-term interests, a purpose-driven ecosystem is built around a long-term vision and coordinated action among the State, businesses and the market.

The State’s role is not to intervene directly in economic activity but to create the conditions for development through institutions, infrastructure, data governance and an environment that encourages innovation.

Nguyễn Bích Lâm, former Director General of the National Statistics Office.

 What advantages can this model bring in generating new growth momentum?

In a spontaneous ecosystem, businesses often focus on short-term investment and fragmented technologies, making it difficult to build strategic industrial clusters. As a result, resources are dispersed and investment efficiency remains low.

A purpose-driven ecosystem seeks to create integrated development clusters where policy, infrastructure, data, talent, technology firms and innovation centres are connected within a unified framework.

This strengthens linkages, improves investment efficiency and creates the conditions needed for the economy’s three key growth engines to operate effectively.

The private sector should play a central role in absorbing, commercialising and spreading new technologies. Việt Nam therefore needs to foster strong technology companies, innovative enterprises and firms capable of leading domestic supply chains.

What strategic priorities should Việt Nam pursue to ensure the smart economy becomes a driver of sustainable growth during 2026–35?

A comprehensive reform agenda is needed.

The most important pillar is an inclusive, transparent and adaptive institutional framework. In the AI era, competitiveness increasingly depends on institutional quality, governance effectiveness and policy responsiveness.

This requires a shift from an administrative management mindset to a development-oriented approach, and from a 'ask-and-give' mechanism to a transparent and stable competitive environment that rewards innovation.

At the same time, Việt Nam must invest in digital skills and lifelong learning. Countries will compete less on low labour costs and more on their capacity to learn, adapt and develop high-quality human resources.

Strategic infrastructure is another priority. This includes digital infrastructure, data infrastructure, energy systems and innovation infrastructure. Data will become a strategic national asset, making it essential to establish an integrated national data system that connects government agencies, businesses and markets.

The transition to a smart economy must also be linked to renewable energy development and green growth.

Countries with reliable, affordable and clean energy will enjoy a significant advantage in attracting high-tech investment and expanding the digital economy.

Why is economic restructuring and stronger domestic capacity important for taking advantage of opportunities created by AI and digital transformation?

They are essential not only for improving growth quality but also for building the foundations of a smart economy and enhancing the economy’s internal capabilities..

Việt Nam needs to move beyond labour-intensive assembly and processing towards a model driven by advanced technology, the digital economy, green industries and innovation. Without greater technological content, AI may only improve the efficiency of the current growth model rather than create new sources of growth.

Domestic firms must strengthen their technological and innovation capabilities and participate more deeply in global value chains.

At the same time, stronger links between foreign-invested and local companies are needed to promote technology transfer, skills development and domestic production ecosystems.

Resources should be allocated more efficiently through market mechanisms, while long-term capital for innovation, strategic forecasting capacity and a human-centred AI governance framework should be strengthened.

The period from 2026 to 2035 will be critical for Việt Nam's competitiveness. The goal is not simply to adopt AI, but to build a smart economy in which AI becomes a new productive force, supported by next-generation industrialisation, smart urbanisation and deeper integration into global value chains.

If Việt Nam can accelerate reforms, strengthen businesses and foster innovation, it will be better positioned to achieve sustainable growth and move closer to its goal of becoming a high-income developed country by 2045. 

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