Investment in science: Sustainable business development direction

Strengthening incentives

According to Minister of Science and Technology Nguyen Quan, businesses have a vital role to play in promoting the adoption of new technologies and investment in such technology should stem from the businesses themselves. For example, investment capital from businesses in science and technology in China is three-time higher than the money sourced from the state budget.

Recognizing a key role of technology in businesses, the Vietnamese government issued Decree 119/1999/ND-CP on financial mechanisms and policies to encourage businesses to promote investment in science and technology. Businesses implementing new technology have 30 percent of the cost covered by the state.

The National Technology Innovation Program until 2020 outlined by the Ministry of Science and Technology allowed the establishment of a VND1 trillion fund, aimed at supporting businesses in buying new technology, conducting research studies and creating new products.

The goal of the national program is to increase the number of businesses using new technology by an average of 15 percent a year.

According to Vietnam Steel Association Deputy Chairman Chu Duc Khai, almost all Vietnamese small and medium-sized enterprises have faced difficulties in terms of securing positions in domestic and global markets due to shortcomings in their finances. Therefore, new technology is an indispensable requirement for successful businesses.

Positive signs

In addition to support from the state, investment capital from businesses plays a key role. Some businesses have led on investment into science and technology. For example, Viettel has spent 10 percent of revenues on new technology. According to forecasts, Viettel should achieve profits of US$2 billion in 2015 with US$200 million earmarked for research and new technology. Viettel has also established three research institutes.

Another example is the Thai Binh Seed Corporation that has established a research institute to develop crop varieties. Thanks to strong investment in science and technology, the corporation has created new numerous crop varieties.

“When businesses are aware of the role of science and technology, it will make contributions to the development of businesses and society in general,” Minister of Science and Technology Nguyen Quan said.

Almost all Vietnamese businesses are small and medium-sized enterprises. Therefore, raising capital to invest in scientific and technological activities has faced many difficulties. Experts said that the national technology innovation fund should expand the types of lending in order to help businesses complete scientific and technological missions.

The supply of hi-tech inputs remains limited, while scientific and technological organizations have only met a small part of demand. Therefore, regularly organizing scientific and technological fairs and strengthening the role of science and technology are necessary.

Quynh Nga