Vietnam’s Path to High-Income Status Depends on Nurturing High-Tech Talents, Says Report

Vietnam’s economy in 2025 has been examined in a September 2025 report, prepared by the World Bank in collaboration with the Central Institute for Economic Management (CIEM), the Vietnam Institute for Development Strategies, and several academic partners. Their combined analysis paints a picture of a resilient economy navigating global turbulence while highlighting an urgent imperative: to nurture a workforce equipped with the skills needed for high-tech industries. The report positions human capital development not as a side concern but as the central pillar of Vietnam’s future competitiveness and its goal of becoming a high-income country by 2045.

Resilience Amid Global Uncertainty

Vietnam continues to outperform many regional peers, maintaining growth that, while slower than in the immediate post-pandemic rebound, remains strong by international standards. Household consumption has strengthened thanks to steady remittances and improving labor market conditions. Public investment has emerged as an important lever, with large infrastructure projects designed to sustain momentum. Yet efficiency in disbursement remains uneven, limiting the full impact of state-led spending. Exports, traditionally the main growth driver, are faltering as global demand softens and trade fragmentation accelerates. Electronics and textiles still dominate the export basket, but the report underscores that these sectors remain heavily reliant on imported inputs, constraining domestic value addition.

Structural Bottlenecks and Climate Risks

Despite resilience, Vietnam faces structural bottlenecks that, if unresolved, may slow its transition to the next stage of development. Productivity growth has decelerated, small enterprises face difficulties accessing credit, and employers repeatedly report a mismatch between graduate skills and industry needs. The report stresses that educational attainment alone does not guarantee job readiness: too many graduates leave universities without the digital or technical skills demanded by fast-evolving industries. Adding to these internal challenges are external risks: tightening global financial conditions threaten capital inflows, and geopolitical uncertainty clouds export prospects. Climate change compounds the problem, as Vietnam’s coastal economy remains acutely vulnerable to storms, rising seas, and other shocks that could undermine both livelihoods and industrial zones.

Nurturing Vietnam’s High-Tech Talents

The special focus of this update is Vietnam’s human capital and its readiness to support high-tech growth. While the country has earned praise for strong performance in basic education, particularly in mathematics and science at the secondary level, it faces a severe shortage of advanced skills in artificial intelligence, semiconductors, data science, and high-end manufacturing. Without these capabilities, Vietnam risks being locked into low-value-added assembly roles while competitors climb higher on the global supply chain ladder. Employers consistently report difficulties in hiring qualified engineers, while graduates acknowledge the gap between academic curricula and practical industry requirements. The report argues that unless Vietnam closes this skills gap, its aspiration to become an innovation-driven economy will stall.

Policy Pathways for a Skilled Future

To address these gaps, the report proposes a set of interlinked policy priorities. Strengthening university–industry collaboration is paramount, ensuring that curricula align with market demands and that students gain practical experience before graduating. Investment in advanced training institutions and research ecosystems, particularly for semiconductors and AI, is seen as urgent to avoid falling behind regional competitors. Vietnam must also design policies to attract and retain international experts, ranging from streamlined visa systems to financial incentives, who can help accelerate capacity building. Equally critical is inclusivity: the report emphasizes that women and disadvantaged groups should have equitable access to emerging high-tech opportunities, broadening the talent pool and ensuring fairer development outcomes.

Outlook: From Factories to Innovation

Looking forward, the report maintains a cautiously optimistic stance. In the short term, growth will remain solid, though risks lean to the downside given global uncertainty. Over the medium term, the ability of Vietnam to sustain its trajectory will depend on how effectively it transitions from being a hub of low-cost manufacturing to an economy powered by innovation. This will require deep reforms in education, targeted investment in human capital, and resilience measures against climate risk. In the longer term, Vietnam’s ambition to achieve high-income status by 2045 hinges on whether it can nurture a new generation of high-tech professionals capable of driving advanced industries. The report’s underlying message is clear: Vietnam’s future prosperity will not be decided only by the scale of its factories or the speed of its export growth, but by the ingenuity, skills, and innovation of its people.