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| A biotechnology laboratory at the International University, Vietnam National University, Ho Chi Minh City__Photo: VNA |
The draft Law on Science, Technology and Innovation was submitted to the National Assembly for discussion at its ongoing 9th session on May 6. Scheduled to be passed this October, the draft law, which will replace Law No. 29/2013/QH13 on Science and Technology, is expected to bring transformative changes to the country’s legal framework. This article, written by Minister of Science and Technology Nguyen Manh Hung and published in the e-newspaper VnExpress, highlights the salient points of the draft Law.
Regarding science and technology as the foundation of the country
A nation with thriving science and technology (S&T) will be a thriving nation. Only when S&T flourishes will the nation prosper. Only when S&T is strong will the nation be strong. To become a global power, a country must first become a powerhouse in S&T. To become a developed country, it must possess advanced S&T capabilities. Hence, it is proposed that allocations for science, technology, and innovation (STI) be increased from the current level of 2 percent to 3 percent of the state budget.
Developing science and technology toward creativity and innovation
Under the draft Law, STI activities are identified as key drivers for enhancing national competitiveness, promoting socio-economic development, ensuring national defense and security, and improving the quality of life for citizens. Among them, S&T activities are primarily carried out by professionals, scientists, research institutes, universities, and enterprises, focusing on research and development (R&D) of new knowledge and technologies. Meanwhile, innovation involves the creating and improving products, services, business models, and management processes carried out by all individuals and organizations, based on technology renewal, technology creation, innovative startups, and performance improvement, with a view to increasing socio-economic value, efficiency, and citizens' quality of life.
For the first time, innovation is included in the draft Law and placed on an equal level with S&T, reflecting a fundamental shift in development thinking. The draft Law introduces various mechanisms to support innovation activities, particularly in enterprises, while also promoting the growth of intermediary institutions such as innovation support centers, startup enterprises, and venture capital funds.
Emphasizing innovation also means emphasizing the practical application of S&T, thus contributing to increasing socio-economic value and efficiency. If STI activities are expected to contribute about 4 percent to GDP growth, 3 percent will come from innovation, and the remaining 1 percent from S&T. This clearly reflects the spillover effect and the practical and inclusive role of innovation in the modern economy.
Strongly renewing management thinking—shifting from controlling processes and inputs to managing outcomes and efficiency, accepting risks while governing them
The focus of state management would no longer lie in how research is conducted, but rather in its outcomes and practical impacts on socio-economic development.
The Ministry of Science and Technology would be tasked with evaluating the overall effectiveness of S&T programs and projects. Resources would be allocated based on actual results. In other words, S&T organizations would only be entitled to receive funding if they can demonstrate the effectiveness of their previous research outcomes.
The draft Law also enhances autonomy for entities conducting S&T research in performing tasks, managing personnel, and using funds through lump-sum budgeting mechanisms. However, this comes with increased requirements for accountability and transparency in resource use. Importantly, organizations and individuals performing S&T research tasks would be entitled to hold ownership over their research outcomes for commercialization purposes. Researchers would be entitled to receive at least 30 percent of the income generated from the commercialization of their research and enjoy income tax exemptions or reductions for this income. These provisions aim to incentivize innovation, encourage a proactive research mindset, and foster close integration between S&T and socio-economic development.
Shifting Vietnam from a user of core technologies to a master of strategic technologies
This is the first time a clear strategy has been proposed to shift Vietnam from a country that primarily uses core technologies to one that masters strategic technologies with substantial impacts on economic growth and national security. In light of this, state budget investment would be more focused and goal-oriented, with around 40–50 percent allocated to R&D tasks aimed at mastering strategic technologies, instead of spread thinly across many areas as in the past. The performance of these tasks would be assigned to capable and reputable enterprises and research organizations based on assessments of their outcome effectiveness and practical contributions. At the same time, the State would adopt policies to invest in the construction of key laboratories, shared-use laboratories, and modern technical infrastructure facilities to support the development of strategic technologies.
Following the market-centered approach in S&T research
Instead of following the traditional top-down path—starting with R&D activities toward the goal of creating new products—the new approach prioritizes market demands, considering products as the driving force and orientation for technology development and identification of relevant research questions.
Shifting basic research to higher education institutions
Shifting basic research to higher education institutions is a major policy of the State that aligns with international practices. In all countries around the world, higher education institutions are considered centers for research—especially basic research—as they are where most research talents are concentrated, particularly young researchers, including lecturers, professors, students, and doctoral candidates. This move is driven by practical demands arising from applied research and technology development, aiming to better integrate various forms of research and increase the proportion of research with real-world impact.
However, this transition does not mean eliminating the role of research institutes in basic research. On the contrary, research institutes—especially the two national academies—will continue to carry out basic research aligned with their strengths, organizational structures, and strategic orientations. At the same time, the draft law places no restrictions on universities in developing technologies. Instead, it seeks to promote the integration of the three core functions of universities, i.e., training, research, and innovation. This integrated model is widely adopted in countries with advanced S&T systems and helps build a dynamic, sustainable academic and innovation ecosystem with broad and long-lasting effects.
Transitioning the center of technology development to enterprises
For the first time, the draft law devotes a chapter to outlining policies to promote R&D and innovation in enterprises. Under this new framework, businesses are empowered and strongly encouraged to invest in R&D—leveraging both their own resources and state support through financial “seed funding” mechanisms, i.e., “the State will invest VND 1 to leverage VND 3–4 from enterprises.”
Previously, state budget funding for R&D in enterprises accounted for only 10 percent; this is expected to increase to 70–80 percent in the near future. Additionally, the draft law allows enterprises to account for R&D expenditures as business operating expenses without any maximum cap (previously limited to around 1 percent of revenue and applicable only to profitable businesses). These expenses would also be eligible for tax deductions at a highly preferential rate of 150 percent, and up to 200 percent if invested in strategic technologies. Moreover, profitable enterprises may allocate up to 5 percent of their pre-tax profits to establish funds for investment in innovation startups. This aims to encourage businesses—especially large ones—to support startups in developing breakthrough technologies and new business models. Furthermore, the State would also adopt preferential policies for the procurement of science and technology products developed by domestic enterprises.
Ensuring the balance between natural sciences and social sciences
An interdisciplinary approach combining natural and social sciences is crucial to ensure that technological advancements align with the protection of humanity’s core ethical values. It is important to distinguish between scientific research, which is less application-oriented and requires space for creative freedom, and technological development, which is outcome-driven and focused on practical applications. Policy priorities would vary depending on the stage of development. Currently, there is a greater emphasis on technological development to drive rapid economic impacts, while still maintaining a strong foundation of basic research at universities to support long-term renewal.
Developing STI within a comprehensive and balanced ecosystem
It is necessary to develop STI within a comprehensive and balanced ecosystem, comprising institutions, infrastructure, human resources, and related stakeholders such as businesses, research institutes, universities, the State, researchers, financial institutions, intermediary organizations, innovation centers, and research, technology, and venture capital funds. In this ecosystem, the State will invest in building key laboratories and shared-use labs, provide support with regard to information access, standards, intellectual property, and adopt preferential financial mechanisms to support enterprise innovation, and attract and incentivize domestic and international talent and experts. Collaboration among stakeholders is encouraged through such policies as placement of orders fostering connections among research institutes, universities, and enterprises; co-funding mechanisms involving both public and private sources; recognition of innovation centers as key connecting hubs; and benefit-sharing policies for research outcomes. These measures lay the foundation for strong, cohesive linkages that ensure the coherence and effectiveness of the national STI ecosystem.
Conducting comprehensive digital transformation in S&T and S&T management
R&D organizations would be enabled to use a national digital platform to manage projects and tasks funded by the state budget. Meanwhile, state management agencies would be responsible for monitoring the entire lifecycle of these tasks, even if they last for 10–15 years. The draft law also proposes a shift from a pre-approval inspection model to a post-audit approach, significantly reducing administrative procedures and replacing them with digital management to enhance operational efficiency, transparency, and long-term oversight.- (VLLF)
