It’s time for Vietnam to shift from its long-standing approach of attracting foreign direct investment (FDI) at all costs towards a more selective strategy focused on technology, innovation, green development, value creation and stronger linkages with domestic enterprises, experts have said.
According to Associate Prof. Dr Hoang Van Cuong, Vice Chairman of the Vietnam Association of Economic Science, Vietnamese enterprises themselves cannot remain outside the process if the country wants to build stronger and more substantive connections with the FDI sector.
He stressed that domestic firms must proactively improve corporate governance, technological capabilities and workforce quality in order to participate more deeply in global supply chains. “Vietnamese enterprises cannot enter the supply chains of multinational corporations unless they meet required standards,” Cuong said.
In reality, weak internal capacity remains a major bottleneck for domestic businesses. Surveys showed that around 60-70% of Vietnamese enterprises are still using outdated technologies, operating on a small scale and lacking sufficient resources to upgrade production systems.
Former Deputy Director of the Banking Strategy Institute Pham Xuan Hoe cited Samsung’s supplier requirements as an example. To qualify for the conglomerate’s supply chain, firms often need to invest hundreds of VND in technological production lines, while many domestic businesses struggle to secure counterpart capital or collateral for bank loans.
The situation highlights the important role of the State in supporting enterprises through easier access to capital, science and technology, innovation and high-quality human resources training.
Experts said Vietnam should identify sectors where domestic enterprises possess competitive advantages and concentrate investment resources there instead of spreading support too broadly.
At the same time, the country needs to prepare a highly skilled workforce capable of undertaking higher value-added jobs and gradually replacing foreign workers in specialised positions.
From a long-term growth perspective, economists also recommended stronger efforts to attract FDI into sectors serving the domestic market.
Currently, foreign investment inflows into these sectors remain relatively modest compared to export-oriented manufacturing.
Improving this imbalance would help Vietnam make better use of foreign capital while reducing excessive dependence on exports and enhancing economic resilience.
Alongside policy changes, many foreign-invested enterprises are also shifting from purely investment-focused models towards long-term cooperation with Vietnamese businesses.
According to Shin JuBack, General Director of LOTTE MART Vietnam, building trust and shared development goals is the prerequisite for creating synergy between FDI enterprises and the domestic private sector.
In his view, FDI should not be seen merely as a source of capital, but also as a bridge for technology transfer, governance standards, operational expertise and international market connections. Meanwhile, Vietnamese enterprises hold major advantages in market understanding, adaptability and entrepreneurial spirit.
To turn such cooperation into a real growth driver, substantive integration within value chains is essential. LOTTE MART Vietnam has prioritised cooperation with local suppliers, especially small- and medium-sized enterprises in essential sectors such as agricultural products, fresh food and fast-moving consumer goods.
Beyond sourcing products, the retailer has also supported Vietnamese firms in improving product quality, food safety standards, traceability systems, packaging, logistics and operational capacity in order to meet the increasingly strict requirements of modern retail systems.
Notably, as green transition becomes an inevitable global trend, the company is also prioritising partners that meet environmental standards. This includes encouraging emissions reductions in logistics, cutting single-use plastics, promoting sustainable consumption and gradually building greener and more transparent supply chains.
Such cooperation models demonstrate that, if designed properly, FDI can become an important driving force helping Vietnamese enterprises mature and move beyond low-cost outsourcing roles.
Experts said Vietnam would struggle to achieve breakthroughs in productivity and value-added growth if it continues relying on the traditional FDI attraction model based on cheap labour and broad investment incentives.
However, by shifting towards high-quality investment flows centred on technology, innovation, green transition and stronger domestic business linkages, the FDI sector could become not only a growth engine but also a launchpad for strengthening the economy’s endogenous capacity.
In that context, the opening door would no longer simply welcome new investment capital, but also knowledge, advanced technologies and greater national competitiveness in a rapidly changing global economy./.
