Vietnam Urged to Use Public Procurement to Scale Domestic Tech Firms

Vietnam is facing a critical juncture in its digital evolution, with experts urging the government to shift from a passive observer to an active enabler of domestic technology firms. The goal is to provide local companies with the necessary "runway" to scale operations and achieve global competitiveness.

To achieve this, experts suggest the Vietnamese state must take a direct role by commissioning major national projects and leveraging public procurement. This strategy would create a guaranteed initial domestic market for local technological solutions, allowing indigenous firms to refine their products and strengthen national technological capabilities before attempting to scale internationally.

The FDI Paradox

For years, Vietnam has aggressively pursued foreign direct investment (FDI) from global tech giants, often referred to in local discourse as "eagles." While this strategy has boosted infrastructure and increased capital inflows, it has created a complex ecosystem. The presence of these high-tech foreign investors is expected to attract satellite businesses, creating a spillover effect that expands the broader technology landscape. However, there is a growing concern that without targeted state intervention, domestic firms risk remaining mere satellites to foreign corporations rather than evolving into independent global players.

Moving Up the Value Chain

This transition is vital for Vietnam's long-term economic trajectory. By utilizing the state's purchasing power to seed a domestic market, the government can significantly reduce the financial and operational risks for local innovators. If Vietnam can successfully pivot from being primarily a manufacturing hub for foreign technology to a creator of its own high-tech intellectual property, the country can move up the global value chain. This shift would transform the nation from a provider of low-cost labor and assembly to a source of high-value innovation.

The Path Forward

As the government considers these recommendations, the focus remains on whether the state will commit to the specific procurement shifts required to sustain local growth. The next phase of development will depend on the execution of these national projects and the ability of domestic firms to translate state-backed stability into international scalability. For now, the priority is ensuring that the "eagles" of the domestic sector have the institutional support required to take flight.