Beyond FDI: Vietnam’s Moment for Tech Upgrading
“FDI has been Vietnam’s growth engine but no longer provides a ladder to advanced tech competitiveness. In the 1970s, Malaysia leveraged FDI for genuine industrial upgrading — for example, Penang’s semiconductor cluster. In contrast, today’s multinationals fiercely guard high-value intellectual property (IP) and production. Vietnam’s role remains confined to low-margin assembly, with limited spillover effects. Vertical integration along the value chain through technology transfer, human labour training, and direct support has become less available in the 21st century. Eighty per cent of Vietnam’s mobile phone exports and over 70 per cent of its electronics products, for instance, rely on imported components, leaving local firms as subcontractors, not innovators. Therefore, a breakthrough in Vietnam’s position in the global value chain relies less on FDI than on its domestic capacity.”
Source: Fulcrum