In recent years, the Government has created many incentives for businesses to invest in science and technology including placing orders for scientific subjects and products that have practical application, encouraging enterprises to deduct annual earnings to invest in science, and supporting imported technologies.
Many local authorities have coordinated with enterprises in technology innovation. For example, Ho Chi Minh City (HCMC) has spent 3 trillion VND (about 140 million USD) from the budget of the city for local technology innovation activities. Thai Binh and Nam Dinh decided to support up to 30 percent of funding for local technology innovation activities.
Last year, the Military Telecom Corporation (Viettel) funded 2.5 trillion VND (about 120 million USD) for R&D activities; the National Petroleum Corporation of Vietnam (PVN) funded 2 trillion VND for R&D activities; the Vietnam Dairy Products Joint Stock Company (Vinamilk) spent more than 4 trillion VND on two new modernly equipped milk factories.
Technological improvements to enhance product quality have brought success to businesses. For example, Viettel’s products have met the market needs and the company's development target at one-third of market prices; PVN has successfully fabricated the first 90 meter self-elevating drilling rig in Vietnam; and Vinamilk, with advanced technology, has reduced the number of employees for a shift of production to only one third, reducing production costs while increasing competitiveness.
Apart from corporations, many small scale businesses have also seen the benefits from investments in technological innovation. For example, Hau Giang Pharmaceutical Joint Stock Company has applied 90 initiatives and benefited 29 billion VND; Minh Long I Co., Ltd has reduced energy consumption by 70 percent while improving plant capacity from 20,000 units to 100,000 units per day after the application of new technologies.
These are positive signals, indicating a growing number of businesses that have been interested in technological innovation with a view to enhancing product quality, improving working conditions, reducing adverse impacts on the environment, and gaining market reputation.
Technological innovation investment will bring businesses benefits. However, there are still many barriers for businesses. The biggest difficulty now for domestic businesses is that they are unable to raise funds from various channels for investment in science and technology.
According to Directress of Business Studies and Assistance Center (BSA) Vu Kim Hanh, all businesses understand how good technological innovation can be and how important it is to corporate sustainable development, but they are stuck in short-term vision for struggling capital rotation.
“To promote corporate technological innovation investment, the government should implement incentives such as tax exemptions or deduction for enterprises in the process of testing the application of new technologies and in the early stages of mass production; strengthened business support activities in the search for extra-budgetary funds catering to technological innovation investment. Small and medium-sized enterprises will make breakthroughs in product quality and added value if receiving timely technological innovation support,” Secretary General of Vietnam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang said.-VNA
