2011 Country DM - Vietnam: Innovation for Social Equity and Sustainable Growth
Vietnam’s GDP grew at an average of over 7 percent annually during the past 10 years (GDP per capita in 2009 was approximately US$1,052). Vietnam is now a middle income country and is on-track to meet the Millennium Development Goals.
Vietnam’s Micro, Small and Medium Enterprises (MSMEs), which account for almost 85 percent of the 471,000 registered enterprises in Vietnam, have made a substantial contribution to the country’s success in poverty reduction and economic development and generated most of the new jobs over the last decade. However, there remains a large untapped potential for innovation among MSMEs and social entrepreneurs to bring even greater benefit to the poor and under-served, to bridge the economic and social disparities and contribute to the country’s sustainable development and quality of growth in Vietnam.
The Need to Take Action
In spite of a less than optimal innovation system, Vietnam has made some notable accomplishments in some of the sectors which demonstrate that the country is poised to adopt an inclusive innovation agenda. For example, agricultural innovation in Vietnam has been positive as government policies encouraged farmers to apply new knowledge in production activities and has helped farmers generate better income, thus contributing to poverty reduction. In the newer context of Vietnam’s integration into the global economy, the agricultural sector will have to deepen the use of technological innovation in order to further improve productivity and competitiveness in international markets, the improvement of which is a vital aspect to closing rural-urban and agriculture-manufacturing disparities. The importance of agricultural innovation is fundamental to the concept of inclusive innovation - it can potentially further raise the income of the rural society, who predominantly depend on agriculture for their livelihood and are a target of social development in Vietnam. This year’s Vietnam Innovation Day is part of a larger effort to enhance Vietnam’s innovation capacity while simultaneously reducing economic and social disparities.
To address the widening social disparities (and to achieve the objective of becoming a MIC), the Government of Vietnam is encouraging the growth of technological and innovation capacity and infrastructure, which are key drivers to competing at a higher level. More importantly, Vietnam will need to utilize technological advances to improve the quality of the lives of the poor and under-served communities in the country (i.e., affordable access to goods and services) and to reduce income disparity. The process begins with supporting Vietnam Innovation Day proposals that will develop products and services that target the poor and under-served communities.
VID 2011 called for proposals on “Innovation for Social Equity and Sustainable Growth” with the focus on the following sub-themes and with the objective of developing products and services for the benefit of the poor and under-served communities:
- Energy Efficiency: Despite an average annual growth rate of 12% in electricity production over the past few years, Vietnam is still facing a great challenge in meeting - ever-increasing demand. The National Target Program on energy efficiency has set a target to save 5-8% of electricity consumption by 2015. Economic and efficient use of energy and the introduction of renewable and alternative energy sources are crucial solutions to ensure sustainable and continuous social and economic development. VID 2011 is seeking innovations in acquiring, adopting, creating and using new technologies, new processes and products that will reduce wastage of energy and promote alternative low-carbon energy sources, especially for those that are low cost and improve access to underserved communities.
- Traditional Herbal Medicine: Vietnam has a long history of utilizing traditional medicine and health solutions using traditional knowledge and herbal plants. Traditional medicine is one of the national development priorities identified by the Vietnamese Government. Prime Minister Decision No. 2166/QD-TTg, dated November 30, 2010, ‘On the issuance of Government’s Action plan to develop traditional medicine and pharmacy of Vietnam by 2020’ aims to modernize and develop traditional medicine and pharmacy to improve and protect the health of the people. VID 2011 is seeking initiatives that tap Vietnam’s great potential in enhancing scientific and clinical research to allow traditional herbal medicine products to be brought to the market and improve access to related services.
- Agriculture based products and services focusing on - (i) nature based, safe and environment friendly products/ production practices, (ii) low cost technologies/ models for agro-produce/food storage and agricultural waste management / utilization (e.g., use of agri. waste to develop alternative materials), and (iii) non-traditional institutional arrangements to better link farmers with domestic agricultural product/food markets and distribution channels.