The American energy group First Solar has started phase 1 construction of a solar panel factory worth US$300 million of the total investment capital of over US$1 billion in Cu Chi District, HCM City. The research and development center project worth US$15 million in Quang Trung Software City of Hewlett-Packard of the U.S was also licensed. Intel already put into operation its chip testing factory in Saigon Hi-tech Park in July 2010.

In Saigon Hi-tech Park in HCM City, production and export revenues double each year. According to a report of the park’s authority, in 2010, production value of businesses reached US$505 million, a 92% increase year-on-year; and the export value of 2011 is expected to reach US$1 billion. To date, 46 projects have been licensed with total investment capital of over US$1,87 billion; 24 of which are operational. The park aims to attract six to eight more investment projects this year, with around US$150 million of registered capital.

In Quang Trung Software City, HCM City, 10 years ago there were only 21 businesses with around 250 employees; today, there are 101 enterprises and the total registered capital has reached US$78.83 million. The software park is targeting revenue of US$300 million in 2015.

According to Dr. Nguyen Van Lang, head of Hoa Lac Hi-tech Park’s authority, businesses and their projects here generate US$40 million worth of export products each year. Lang says the park has also received a pledge of support worth around US$600 million for the next five years from the Japanese ODA.

Regarding the activities of hi-tech parks, Lang, who is also deputy minister of Science and Technology, contends that hi-tech industries are starting to grow in Vietnam. He says the most important phase is devising legal framework, legal documents and development strategies for hi-tech parks. Apart from the three aforementioned hi-tech parks, a host of other biotechnology centers and hi-tech industrial parks have also appeared in many localities.

Although end products of these big projects are solely for export and technology transfer has not been emphasized, this is a positive signal. Firstly, big groups bring advanced technologies, paving the way for other companies to follow. Secondly, the presence of such groups is an opportunity for policymakers to pay closer attention to this aspect. As a result, mechanisms and policies will gradually be improved, creating opportunities for domestic businesses to set foot in the suppliers’ chain and supporting industries.

The remaining challenges

Amid the domestic technology picture, the arrivals of foreign hi-tech groups are cheerful spots. Nonetheless, in order to develop high tech, according to Lang, a great deal of difficulties needs to be dealt with.

“The first challenge is site clearance, the second is investment capital for infrastructure, and the third is the lack of management experience. Another problem is ambiguous mechanisms and policies,” Lang says.

Lang’s comments have been vindicated. According to the 2010 summing-up report of Saigon Hi-tech Park’s authority, land recovery and site clearance were the biggest challenge for the park last year. Also in this report, slow progress in infrastructure construction and policy making were obstacles to attracting new investment capital.
According to Lang, to keep up with other nations in the region and the world, Vietnam development of hi-tech industries should be given first priority.

To solve those issues, besides establishing a multitude of hi-tech parks, devising hi-tech investment mechanisms, Vietnam should learn from China, Singapore, Malaysia and India in training a hi-tech workforce of high caliber for research and development, software production and products for Vietnam’s source technology (electronics, semiconductors, biotech products, nanotech, space, satellite, etc.).

An experience that Lang calls a “way out for the long run” Vietnam should learn is to create source technologies for the Vietnamese. After a recent visit to BKIS and Vinagames, Lang contends that despite small in scale, these companies could achieve the goal of US$1 billion revenue in the future.
Another thing is to establish venture capital companies and funds, both state-run and private, as investment in technology, especially high tech, is venture capital investment by nature.