Vietnam's Paradox: FDI Drives 98% of Tech Exports, But Innovation Stalls

Is Vietnam the next China? As investment from tech giants like Apple and Samsung pours in, the country is being hailed as a new high-tech hub. However, a new report warns that this shiny exterior masks a concerning reality: meaningful technology transfer isn't happening, raising fears that Vietnam could become trapped as a high-tech assembly line.

'Made in Vietnam,' Not 'Innovated in Vietnam'

Research published on December 26 by academics at RMIT University Vietnam lays bare the situation. According to the report, Foreign Direct Investment (FDI) companies account for a staggering 98% of Vietnam's electronics exports. The researchers call this a clear signal of "limited technology spillovers." This suggests that while foreign capital and factories are flooding in, local Vietnamese firms remain stuck at the lowest rung of the technology ladder: assembly.

The Crucial Difference from China's Model

This stands in stark contrast to China's development playbook. Beijing successfully engineered technology transfer by forcing foreign companies to form joint ventures with local partners in exchange for market access. Vietnam's current FDI boom, on the other hand, appears to be focused almost exclusively on manufacturing efficiency. There seems to be little incentive for global players to transfer core intellectual property or establish significant R&D operations on Vietnamese soil.