Vietnam's development model renewal puts enterprises on new playing field

From low-cost advantage to productivity competition

After 40 years of Doi Moi (Renewal), Vietnam has formed a highly open economy, deeply participating in global trade and supply chains. However, as room for growth based on capital, natural resources, and cheap labor gradually narrows, renewing the development model becomes urgent.

Resolution No. 19 dated July 28, 2026, on renewing Vietnam's development model focuses on shifting strongly to a growth model based on productivity, science and technology, innovation, and digital transformation. For the business community, this is not only a change in policy direction but also a change in how to compete.

For a long time, advantages in labor costs, land, and the ability to expand production scale helped many Vietnamese enterprises enter international markets and supply chains. But as standards for quality, technology, environment, traceability, and governance rise, the low-cost advantage is no longer enough to create sustainable competitiveness.

Therefore, enterprises must shift from a "producing more" mindset to "creating higher value."

This shows in productivity. With the same amount of labor, capital, and raw materials, whichever enterprise produces more goods, with higher quality and lower costs, will have an advantage. To do so, enterprises must invest in technology, automation, data, governance, and human resource quality.

Dr. Can Van Luc, Chief Economist of BIDV, says the requirement to shift the growth model is to use productivity, science and technology, and the digital economy as driving forces, replacing reliance on capital and labor.

For enterprises, digital transformation cannot stop at using management software or online sales. Technology must be brought into decision-making, cash flow management, production management, market forecasting, and customer care.

As AI is increasingly applied, manufacturing, trade, logistics, finance, or service enterprises must all consider the ability to apply technology to cut costs and improve efficiency.

Luc notes this is also a direct pressure on small and medium-sized enterprises. Not every enterprise has large resources to invest in technology, but slow transformation will make the productivity gap with leading enterprises increasingly wider.

State should pay for green outcomes

Another requirement of the new development model is that enterprises cannot develop alone. To improve competitiveness, Vietnamese enterprises must strengthen links with one another and with research institutes, universities, and science and technology organizations.

Resolution 19 sets the orientation to form a business ecosystem across linked tiers, focusing on leading enterprises and anchor companies, while strengthening connections with small and medium-sized enterprises and innovative startups. This is particularly meaningful for the goals of raising localization rates and increasing Vietnamese enterprises' participation in global supply chains.

Reality shows that to become suppliers for major corporations, enterprises need competitively priced products, as well as meet strict requirements on quality, schedule, governance, environmental standards, and traceability.

If enterprises stay only in processing, assembly, or supplying simple materials, the share of value they retain will be limited. The bigger issue is step-by-step participating in higher value-added stages, from design, research and development to branding, distribution, and mastering technology.

Expert Hoang Trong Thuy says that for enterprises, new development capacity lies first in mastering technology, improving human resource quality, innovating governance, and building competitive products. Enterprises need to change how they view value, from "How much money can 1 ton of raw materials be sold for?" to "How many products and how much value can 1 ton of raw materials create?". This is the true measure of capacity to generate added value.

On the government side, Thuy states that support should not come as loans for enterprises to buy tech equipment. Policy needs to focus on digital infrastructure and shared, interconnected data, while linking with long-term credit for technologies that prove effective. In green transformation, the State should pay for green outcomes rather than green equipment or green models.

Renewing the development model is not a story that exists only in resolutions or macro strategies. It goes straight into every factory, enterprise, and investment decision.

The new game will be decided not just by how large an enterprise is, but by its capacity to create higher value, master technology better, and stand at a higher position in the value chain.

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