Challenges in technology transfer

According to the Ministry of Science and Technology, in the period of 2010-2017, there are 115 contracts transferred from abroad into Vietnam, with the total value of technology transfer contracts has been granted registration certificates estimated at 447,000 billions dong. The effect of new industries, new technology of FDI enterprises has helped many economic sectors of Vietnam have advanced technology. However, to date, the technology transfer has not met the needs of technology innovation in the country.

Although Vietnam ranks 50 out of 141 countries in the UNIDO Industrial Competitiveness Index in 2016, up 44 degrees from 1990,  however, in the ASEAN-5, Vietnam only stands on the Philippines.

According to an annual survey conducted by Vietnam Chamber of Commerce and Industry (VCCI), FDI enterprises only buy about 26.6% of equipments, inputs from Vietnamese enterprises, the rest are imported from the mother company or from abroad. This is because almost FDI enterprises are enterprises with 100% foreign investment. This will limit the transfer of advanced technology to local businesses as expected and committed.

In terms of technology quality, although the technology transferred to Vietnam is largely equal to or higher than that available in the country, it only reaches the average or intermediate level of technology compared to that of other countries in the region. In fact, about 80% of FDI projects uses the world’s average technology, 14% uses low and backward technology and only 5-6% uses high technology.

So far, the Government has issued a number of policy documents aimed at preventing the importation of backward, energy-consuming and material-intensive and environment polluting technology into Vietnam through investment projects. The control of used equipment and technology has gradually been tightened. Circular No. 23/2015/TT-BKH&CN stipulates that used machinery, equipment and technology line must meet the conditions of the equipment age of not more than 10 years and have been manufactured in conformity with the technical standards, national standards and G7 standards on safety, energy saving and environment.

However, the control of import of machinery and equipment still faces many difficulties. Ministry of Science and Technology said that in the past, the evaluation of technology corresponding to the investment decision stage and the investment decision stage has not been clearly defined. In particular, there is no mechanism to manage imports the technology outside the list of import restrictions.

In order to strengthen the technology appraisal of investment projects, the Law on Technology Transfer in 2017 has set aside a chapter on this work, in which additional provisions such as expanding the subject of investment projects that is necessary to appraise/comment on technology in each period of decision on investment policy and investment decision; Management measures for cases where the investors adjust or change the technological contents already evaluated; Inspection and supervision activities in the course of implementation; Contents of technological explanation and contents of technology appraisal corresponding to each period of decision on the investment policy and period of investment decision of the project; Responsibilities of agencies in appraising or commenting on the technology.

In the coming time, the Ministry of Science and Technology shall propose and adjust the system of relevant legal documents so as to have a synchronized legal corridor on technology appraisal in investment projects. In particular, the Ministry said that it is necessary to develop policies to import technology suitable for each stage of socio-economic development.

Productivity and Quality Office