Tech transfer: Falling short of expectations

Tech transfer: Falling short of expectations By Thuy Dung There’s no way FIEs “voluntarily” make technology transfer; instead domestic enterprises must look for a third party for technology procurement on their own – PHOTO: LE MINH KHUE One of the deepest hopes clinging to foreign direct investment (FDI) is the transfer of technology to domestic firms with which the national economy expects to enhance its technological strength. However, such target has not seemed to be achieved although foreign capital has kept flowing into Vietnam over the past 30 years. Foreign-invested enterprises (FIEs) have made a significant contribution to Vietnam’s total investment, export, job creation and budget revenue. However, FDI projects have so far mostly been related to assembly and processing projects while achieving a modest localization rate and low added value. Also, FIEs have yet to establish a close link with the local corporate circle to help the latter take part in the value chain together. Nor have them fostered the development of supporting industries in Vietnam. And in the eyes of many Vietnamese policy wonks, the technology and management experience transfer has fallen short of their expectations. That was how Deputy Minister of Planning and Investment Nguyen The Phuong addressed a recent seminar on technology transfer from FIEs. Deputy Minister Phuong’s remarks are justified. The efficiency of technology transfer from FIEs in Vietnam is very poor and tends to be lagging behind other countries in the region, as per the 2016 World Economic Forum. Precisely, in 2009, Vietnam ranked… [Read full story]