Building PPP mechanisms in sci-tech venture investment

Given the economic terrain ahead, what are the orientations for the sci-tech market development for the rest of 2022?

Many encouraging achievements have been made. The value of transactions in the sci-tech market grew 22 per cent on average in 2011-2020. Some industries saw strong growth like computer electronics at 46 per cent, wood and paper processing industry at 29 per cent, and food processing at 28 per cent.

The achievements are attributed to the supporting policies, and efforts by scientists, inventors, and research and development of applications and innovations by domestic firms, and development of innovative startups.

For instance, in 2021, the Ministry of Science and Technology (MoST) got the prime minister’s approval for the national sci-tech market development scheme to last until the end of the decade.

This year alone, the ministry will focus on the implementation of the national sci-tech market development programme by 2030, concentrating on a number of key issues: issuing the framework of the programme; establishing the management committee; issuing operational regulations; issuing circulars regulating management and finance of the programme; and issuing a decision on job assignment and management collaboration.

What solutions will the MoST take to unlock more investment inflows into the sector?

The policies encouraging investment in the sci-tech industry are now mainly stated in the Law on Science and Technology 2013, the Law on Export Tax and Import Tax 2016, and the Law on Technology Transfer 2017.

In the spirit of creating favourable conditions for business and investment activities in sci-tech and innovations, the country has completed a legal framework on the issue to ensure consistency, and create an enabling legal corridor for businesses and investors. However, the majority of encouraging policies are indirect.

Despite contributions to the national socioeconomic development, local businesses’ capacity for technology absorption and innovation remains weak. In general, the efficiency in the country’s attraction of investment in the sci-tech industry remains low, and is yet to catch up with international trends.

This is proved in the country’s spending on research and development (both the state and private sectors) which is just 0.53 per cent of GDP, further lower than the world average at 2.23 per cent of GDP.

Surveys found that small- and medium-sized enterprises, especially startups, still find it hard to get access to credits for technology innovations because of the collateral conditions. Moreover, the government’s support measures for businesses to bring their technology products to potential markets are still lacking.

Resolution No.43/2022/QH15 dated January 11 on supporting the socioeconomic recovery and development programme sets the tasks of solving the problems in the regulations on expenditure and management of the sci-tech development fund for businesses.

This involves spending about VND5 trillion ($217.4 million) on technology innovation, sci-tech business incubation, and commercialisation of sci-tech products and services as a result of research and development activities.

Therefore, this year the MoST and the Ministry of Finance (MoF) will collaborate in amending and supplementing the existing regulations that cause barriers for the management and use of the fund.

What breakthrough policies are the MoST working on to make sci-tech a key driver of economic growth?

The tasks for sci-tech development and technology innovation in 2021-2025 are fully set in Decision No.2488/QD-BKHCN dated October 2021 together with the action programme of the MoST.

For businesses, deploying the policies and solutions for the development of a national innovation startup ecosystem; promoting the development of national innovation centres and national innovation startup centres initially in Hanoi, Danang, and Ho Chi Minh City, as well as innovation startup centres at powerful businesses, universities, colleges, vocational training establishments and research institutes, and others.

Policies to encourage private businesses and powerful firms to make venture investments in innovative startups, and the public-private partnership mechanism in venture investment in sci-tech and technology innovation will be built, while studying and implementing the pilot mechanism for the use of the fund for finance and investing in innovative startups.

Policies on encouraging businesses, especially foreign-invested enterprises, and technology groups to establish research and innovation centres in Vietnam will be worked on. Solutions to intensify links between domestic and foreign groups, and between businesses and research institutes and universities will be built.

For sci-tech manpower development, prioritised policies will be built to develop young talents, while solving the problems in implementing the regulations on training and attracting and developing young staff.

The country will also continue to invest in and tap into the advantages of the national high-tech parks, equivalent agricultural parks, and concentrated IT parks aligned with the global model.