Vietnam's Economy in the New Era: Conditions, Challenges and Solutions of an Innovation-Based Growth Model

Kinh tế Việt Nam trong thời kỳ mới: điều kiện, thách thức và giải pháp của mô hình tăng trưởng dựa trên đổi mới sáng tạo

Anh Ngoc Nguyen (), Cuong Le Van (), Thi Kim Cuong Pham (), The Nguyen To, Phu Nguyen-Van (), Ngoc Sang Pham and Thanh Tam Nguyen-Huu ()
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Anh Ngoc Nguyen: DEPOCEN - Development and Policies Research Center - Development and Policies Research Center, FTU Research Lab - FTU - Foreign Trade University, Hanoi, Vietnam
Cuong Le Van: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Thi Kim Cuong Pham: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
The Nguyen To: VNU-UEB - VNU University of Economics and Business–Vietnam National University, Hanoi
Phu Nguyen-Van: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Ngoc Sang Pham: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Thanh Tam Nguyen-Huu: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School

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Abstract: This article, authored by a group of Vietnamese and French economists, analyzes Vietnam's economic development challenges and proposes an innovation-driven growth model for the country's new era. After nearly four decades of Doi Moi reforms, Vietnam has achieved remarkable GDP growth, reaching over $514 billion in 2025, but its traditional growth model (based on cheap labor, resource extraction, and assembly-focused FDI) is reaching structural limits. The authors identify several critical development traps threatening Vietnam's future: the middle-income trap, the low-technology trap, the trade trap, and the demographic aging trap. To overcome these challenges, they propose a new growth model built on three pillars: (1) enterprise-led R&D and innovation, (2) digital and green transition, and (3) high-quality human capital development. A central recommendation is to raise R&D spending from the current 0.4–0.5% of GDP to 3% by 2045, with at least 60% contributed by the private sector. The article also advocates building 5–6 world-class universities by 2030–2045 and, crucially, adapting France's CIFRE model (a co-funded PhD program linking universities and businesses) to Vietnamese conditions. A four-phase implementation roadmap spanning 2026 to 2045 is proposed, with six interconnected policy recommendation groups targeting R&D incentives, university excellence, enterprise-university linkages, innovation ecosystems, quality FDI attraction, and institutional reform.

Date: 2026-08-31
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