HCMC: Red tape hinders investment in sci-tech R&D

10:46 | 27/09/2018 Science - Technology

(VEN) - Ho Chi Minh City (HCMC) is a driving force and an investment magnet of the Vietnamese economy. However, the sci-tech business activity still accounts for a small percentage of the city’s total, due to insufficient venture capital and complicated business registration procedures.

hcmc red tape hinders investment in sci tech rd
Ho Chi Minh City is promoting the transfer of scientific research results and technologies to businesses and other units

According to Nguyen Viet Dung, Director of the municipal Department of Science and Technology, complicated procedures discourage venture capital funds from investing in Vietnam. Last year, Ho Chi Minh City received a mere US$290 million from these funds. Meanwhile, other countries in the region attract billions of US dollars of venture investment in science and technology annually. Singapore is an attractive destination for startup businesses because simple procedures are required to establish a new company in this country, Dung said. In his opinion, Vietnam should have suitable policies to encourage investors.

Speaking at a session of the HCMC People’s Council in July, Dung said more than 300 research projects were conducted in the city in the 2016-2018 period, nearly 90 percent of which have been transferred for application. However, the application results remain of low effectiveness, a fact that Dung attributed to limited research budgets. A total of about VND200 billion was invested in the 300 research projects, averaging less than VND1 billion per project, while in Japan, for example, budget for each research project ranges from US$20-30 million.

Dung said science and technology ranks second among the top nine service sectors, with annual growth rate of 17 percent. However, while the city has 24 public incubators for scientific and technological innovations, they have yet to deliver the desired results and are not as effective as private incubators. In addition, connectivity among universities, research institutes and enterprises is still limited.

The role of intermediaries in connecting supply and demand and providing technology transfer consultancy is also ineffective. Most transactions in the science and technology market are related to machinery and equipment sales and purchases, while other technology transfer remains limited.

In the opinion of Nguyen Thi Quyet Tam, Chairwoman of the Ho Chi Minh City People’s Council, the municipal Department of Science and Technology should play a leading role in promoting sci-tech development, and investment sources in this field must be diversified.

According to Dung, the municipal Department of Science and Technology will continue promoting the linkage between businesses and scientists, while at the same time taking measures to create an ecosystem for sci-tech development.

The Ho Chi Minh City Department of Science and Technology will accelerate the transformation of all public sci-tech

organizations into self-sufficient units.

Thanh Duong