Vietnam needs to increase investment in science to improve labor productivity.

Vietnam's labor productivity has improved, but is still far behind other countries in the region and the world. To clarify this issue, a reporter from the Industry and Trade Newspaper had an interview with Associate Professor, Dr. Bui Quang Tuan - former Director of the Vietnam Economic Institute.

In the first 6 months of 2024, Vietnam's labor productivity has had positive changes. How do you view this issue?

According to statistical reports, in the first 6 months of the year, Vietnam's labor productivity increased by about 10%. However, this increase is still only in a very short-term period, so we cannot conclude with certainty that labor productivity has had sustainable growth, because labor productivity must be evaluated annually or even by period. However, in my opinion, the growth results in the first months of the year are positive.

Associate Professor, Dr. Bui Quang Tuan - former Director of Vietnam Economic Institute

However, despite improvements in labor productivity, our labor productivity is still a low point in the ASEAN region, we are behind many countries in the region. In particular, we can narrow the gap with ASEAN countries but are absolutely lagging behind countries like India and China, which are alarming signals when we want to innovate the growth model based on productivity efficiency, increased competitiveness, based on science - technology and innovation. That is the goal, and how to improve labor productivity, we will have to review the reasons why we are in the "low area" of labor productivity.

Vietnam's labor productivity is improving (Photo: Nguyen Hoa)

Thus, although there has been a certain improvement, the absolute gap in labor productivity between Vietnam and other countries is widening. What is the most fundamental reason, sir?

I think the most important and underlying cause is investment. We invest too little in science, technology and innovation, only about 0.6% of GDP, compared to the world average of 2.2% of GDP. This is a huge gap.

In particular, countries that have made great achievements in improving labor productivity invest nearly 4% of GDP, such as South Korea. This further confirms that we are investing too little in science and technology and human resources.

Besides, how are the mechanisms and policies for investment in labor productivity put into practice? Sometimes we may have resources but cannot spend them all. For example, we spend 2% of the budget on science and technology but we may not spend them all, because the policies and institutions are sometimes barriers that we need to review. Sometimes we need breakthrough policies that pave the way, so that scientists do not worry too much about strict financial regulations, then they will devote more effort, focus more on innovation and science and technology.

Another factor is that the results of scientific research in recent times have not yet been put into practice and do not create motivation for scientific research.

There needs to be a mechanism to encourage businesses to invest in research and development (R&D) to improve labor productivity (Photo: Nguyen Hoa)

According to you, to increase labor productivity, what solutions do we need to focus on?

In the coming period, to improve labor productivity, I think we need to continue to pay attention to many factors related to improving labor productivity, especially institutions, policies, investment in science and technology and innovation, investment in human resources... And for businesses, we must have a mechanism to encourage businesses to invest more in research and development (R&D), invest in science and technology and how to connect with each other and increase economic scale, then promote comparative advantages, in short, we must review all conditions and factors that affect the improvement of labor productivity in Vietnam.

In particular, we must take advantage of the market mechanism, bring the scientific and technological products that we have invested in and researched to businesses to apply in production and business activities, and bring them to the market to become a driving force for growth.

Thank you!

On November 8, 2023, the Prime Minister issued Decision No. 1305 approving the "National Program on Labor Productivity Increase to 2030" with the goal of: By 2030, labor productivity will become an important driving force for rapid and sustainable growth, effectively exploiting the opportunities of the fourth industrial revolution.

Accordingly, from 2011 to present, labor productivity has increased 2.7 times, from 70 million VND/worker in 2011 to 188.7 million VND/worker in 2023 - this is a high level compared to the region and is gradually narrowing the gap with other countries.

Source: https://congthuong.vn/viet-nam-can-tang-dau-tu-cho-khoa-hoc-de-cai-thien-nang-suat-lao-dong-332938.html