Transforming Vietnam’s Innovation Landscape
Vietnam is taking a bold step into the future with the enactment of the 2025 Law on Science, Technology and Innovation, which officially came into effect on October 1, 2025. This comprehensive legislation is seen as a strategic institutional leap aimed at strengthening national competitiveness and elevating the country’s role in global value chains.
Consisting of 73 articles across seven chapters, the Law introduces a transformative governance model that encourages active participation from both the government and the private sector in high-tech industries. Its goal is to ignite national economic growth through the promotion of innovation, the commercialization of research, decentralization of authority, and the alignment of scientific outcomes with market demands.
Core Pillars of National Development
The Law enshrines science, technology, and innovation as foundational pillars for socio-economic development, national defense, and enhanced quality of life for citizens. For the first time, innovation is legally recognized on equal footing with science and technology. It defines innovation as a society-wide process that includes individuals, businesses, and organizations working together to improve or create products, services, and management systems.
Key definitions and principles introduced in the Law include concepts like innovation ecosystems, digital platforms, and national data infrastructure. It also reinforces principles such as sustainable development, scientific integrity, academic freedom, and international integration.
Enterprise-Centered Innovation Ecosystem
One of the Law’s most significant contributions is its emphasis on an enterprise-centered innovation ecosystem. Businesses are placed at the core of innovation, with structured linkages to educational institutions, research centers, intermediary bodies, and government agencies. The Law acknowledges new organizational models and innovative production mechanisms in both the public and private sectors.
Community-driven initiatives, digital technology applications, and public service innovations are now considered key components of the national innovation ecosystem. These provisions aim to create a fertile environment for grassroots innovation and broader societal engagement.
Modernizing State Management
The Law represents a shift in the state’s regulatory approach—from pre-inspection to post-implementation performance evaluation. This modernization allows for greater autonomy and accountability among research institutions, businesses, and individuals. The Ministry of Science and Technology will oversee outcome-based assessments to guide funding and task allocation.
A notable feature is the introduction of a regulatory sandbox, which allows for experimental implementation of new models and technologies within defined scopes and timelines. This helps mitigate risk while encouraging the development of cutting-edge solutions.
Importantly, the Law introduces the concept of acceptable risks in research and innovation. If procedures are followed and no fraud or misuse occurs, entities are exempt from administrative and civil liabilities. Researchers are also shielded from criminal liability for unintended consequences stemming from lawful scientific activities.
Empowering Research and Commercialization
The Law enhances the commercialization of research funded by the state budget. Organizations now automatically hold ownership or usage rights over such outputs, minimizing bureaucratic delays. Researchers are entitled to at least 30 percent of profits derived from commercialization, and these earnings may benefit from personal income tax exemptions or reductions.
The State pledges to allocate no less than 2 percent of its total annual budget to science, technology, and innovation. This figure is expected to rise to 3 percent to support large-scale, interdisciplinary projects with significant economic spillover effects.
Funding mechanisms are becoming more flexible, with the Law enabling presumptive financing based on either outcomes or specific project components. Implementing organizations will enjoy greater freedom in managing and reallocating funds as needed.
Fostering Talent and Digital Transformation
Recognizing the crucial role of human capital, the Law outlines comprehensive strategies to attract top talent in science and technology. These include financial incentives, improved working conditions, housing support, and social welfare benefits.
Digital transformation is another key focus. The Law promotes the development of digital infrastructure, online public services, data digitization, and automated management processes. Priority investments include the National Digital Platform for Science, Technology and Innovation Management and the National Information System on Science, Technology and Innovation.
The establishment of national laboratories and shared-use research facilities will be supported, alongside efforts to connect research institutes, universities, and enterprises. Industrial and hi-tech parks may also receive financial backing to strengthen their innovation infrastructure.
Empowering Local Innovation
Provinces and cities are granted increased autonomy to craft localized innovation strategies. They are encouraged to establish innovation funds, centers, and incubators tailored to their unique socio-economic profiles. This decentralization aims to build robust regional innovation ecosystems aligned with local strengths and development goals.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.