With the orientation of making Vietnam one of the ‘powerhouses’ in industry in the coming time, the Government has issued an Action Program under Resolution No. 23-NQ/TW dated March 22, 2018 [1]. This adds motivation and favorable conditions for businesses in the industry to develop rapidly, thereby achieving the goal of industrialization and modernization by 2030 as planned. This article by KTG Industrial will provide information on industrial development policies in Vietnam.
Vietnam Industrial Landscape
Recognizing the importance of industry to the national economy, the Government has made efforts to implement many important policies and guidelines to promote sustainable growth. This is clearly demonstrated through the positive results from revenue and market share of some key industries such as electricity, electronics, information technology, etc.
Typically, by the end of 2024, according to information from the Ministry of Information and Communications, the industrial revenue of the digital technology industry in Vietnam is estimated to reach VND 3,878,296 billion (about USD 151.86 billion, up 11.2% compared to 2023) [2].
However, the current industry in Vietnam still does not meet certain requirements of the global industrialization and modernization process. In general, positive results are only short-term instead of the desire for stable and sustainable growth. This can be explained by reasons such as weak internal strength, heavy dependence on foreign investment, too much emphasis on cheap labor, etc.
Industry in Vietnam is on the rise, and needs appropriate support policies
What’s in industrial policy in Vietnam
The Vietnamese Government has officially approved the Government’s Action Program, implementing Resolution No. 23-NQ/TW dated March 22, 2018 of the Politburo on the orientation of building a national industrial development policy to 2030, with a vision to 2045 (attached to Resolution No. 124/NQ-CP) [1].
The most important goal of this program is to turn Vietnam into a country with rapid industrialization and modernization so that it is in the TOP 3 leading countries in Southeast Asia (ASEAN) by the end of 2030. At the same time, the Government’s vision is that by 2045, Vietnam will become a modern industrialized country.
To implement these strategies, the Government and the Politburo have agreed on a number of detailed and key goals for 2030 as follows:
- Industrial Competitiveness Index (CIP) is among the top 3 countries in ASEAN.
- GDP growth with the proportion of industry reaching over 40%.
- The proportion of GDP for the processing and manufacturing industry reaches about 30%.
- The proportion of GDP for the manufacturing industry reaches over 20%.
- The proportion of high-tech industrial products in the processing and manufacturing industry reaches at least 45%.
- The average growth rate of industrial added value is over 8.5%/year
- The average growth rate of the processing and manufacturing industry is over 10%/year.
- The average growth rate of industrial labor productivity is 7.5%/year.
- The proportion of labor in the industrial and service sectors is over 70%.
- Building a number of large-scale domestic industrial enterprises with international competitiveness [1].
From now until 2030, Vietnam has had certain strategies for the industrial sector
Government policies and initiatives driving industrial growth
To achieve the above goals, the Vietnamese Government has proactively proposed appropriate action programs. Including:
- Completing the approval of proposed plans in industrial sectors according to the Law on Planning, so that the territorial space and industrial structure shift can meet daily orientations and local socio-economic conditions.
- Consider forming industrial clusters based on appropriate criteria (such as the same industry, having advantages in trade, geo-economics, labor resources, etc.).
- Proactively coordinate with ministries and branches to develop methods to evaluate the performance of the above clusters to ensure the highest operational efficiency.
- Focus mainly on industries related to automobiles, agricultural machinery, construction equipment, industrial equipment, electrical and electronic equipment, etc.
- Coordinate with the Ministry of Agriculture and Rural Development to guide and direct localities to allocate appropriate agricultural and forestry processing facilities according to raw material areas and consumption capacity.
Investment opportunities in Vietnam’s industries
Towards completing all goals by 2030, Vietnam is currently “opening” to all potential investors in important industries with many new strategies as follows:
Manufacturing
Manufacturing is one of the industries that promotes strong economic development in Vietnam. This is confirmed by the data of more than 24.8 billion USD of FDI into our country as of September 2024, focusing mainly on high-value industries such as electronics, auto components, semiconductors and green technology [6].
In the national industrial development policy to 2030, the Government has actively requested the Ministry of Industry and Trade to focus on perfecting policies and regulations related to the development of the manufacturing industry, especially key mechanical products. In addition, the government also approved the strategy and removed factors affecting the development results of the textile and footwear industry in 2025.
By 2024, the manufacturing industry has also made important strides, preparing for development results in 2025. According to the General Statistics Office of Vietnam, the industrial production index increased by 8.4% over the previous year (in the first quarter, it increased by 5.9%; in the second quarter, it increased by 9.9%; in the third quarter, it increased by 9.3% and in the fourth quarter, it is estimated to increase by 7.9%) [7]
Manufacturing is an indispensable part of the GDP revenue of the industrial sector in Vietnam
Electronics
Not inferior to the manufacturing industry, the electrical and electronic industry in our country has also made many remarkable strides. Typically, compared to 2023, the production output of uninterruptible power supplies, automatic data processing equipment, etc. increased by 23.3%; computer components increased by 8.37%,… (information as of July 2024) [4].
Along with that, it can be seen that electronic products on the market are mainly imported and assembled domestically. This is a positive result for investors aiming for this industry.
The electronics industry is also a bright spot in the development of Vietnam’s industry in 2024 when witnessing a series of events such as
Renewable Energy
Realizing the great potential of the energy industry (especially renewable energy), the Government issued many documents to improve the investment environment for this “golden” field.
Specifically, the VIII generation power planning process was successfully approved in May 2023, expected to increase by 4,100 MW of capacity, mostly from solar power by 2030. In addition, the state also plans to add 252.1 – 291.5 billion kWh of electricity production from natural light by 2050, along with 21,880 MW of onshore wind power, 6,000 MW of offshore wind power by 2030 and 70,000 – 91,500 MW by 2050 [3].
Infrastructure
As a developing economy, Vietnam needs a lot of investment capital to build infrastructure systems, thereby creating favorable conditions for sustainable growth. According to the latest statistics, Vietnam wants to have at least 25 – 30 billion USD/year, from now until 2040 to invest in transportation, highways, trains, etc. [8]
Faced with such a demand threshold, our country is constantly striving to rank high on the international credit rating list according to Fitch Ratings. That means Vietnam has demonstrated its financial capacity, ability to meet debt obligations and economic and social stability in the following years. This is a great foundation for investors who want to recover capital quickly [8].
Although the infrastructure in Vietnam has been more complete than before, some areas still need more investment capital
Logistics
According to the latest information, the average growth rate of Vietnam’s logistics industry is 14% – 15%, with a scale of 40 – 42 billion USD/year. In parallel, the results of the World Bank (WB) rankings show that Vietnam ranks 43rd in the Logistics Performance Index (LPI), among the top 5 countries in ASEAN (as of 2023) [9].
Thanks to such impressive potentials, Vietnam is confident that it can “upgrade” the Logistics industry in the future if it has enough capital potential. Therefore, the Prime Minister issued Decision No. 200/QD-TTg dated February 14, 2017 approving the Action Plan to improve competitiveness and develop Vietnam’s logistics service industry by 2020 with 06 goals and 60 specific tasks. Of course, there are many tax policies and supporting infrastructure [5].
Challenges and factors for businesses when participating in the industrial market
Although Vietnam opens up many opportunities for multi-sector investment, there are certain challenges that need to be overcome as soon as possible to achieve the expected economic growth rate. Notable among them are:
Regulatory landscape
Vietnam is an Eastern country, so in general, the legal system is still partly influenced by outdated customs and practices. Along with that, the process of perfecting and developing our country as it is now is only less than 50 years, so somewhere the law has not been adjusted too much according to the extremely fast integration speed as it is today. Therefore, foreign enterprises wishing to invest in our country may encounter difficulties in completing procedures according to state regulations.
Procedures for registering investment or business in Vietnam still have shortcomings
Infrastructure limitations
As mentioned above, although the quality of infrastructure in our country is improving positively, it may not “catch up” with the needs of investors. Up to now, we still need huge investment capital for infrastructure (tens of billions of USD per year). Therefore, if foreign investors require much higher infrastructure requirements (such as subways) to serve the production and distribution process, our country is temporarily unable to meet them well.
Workforce challenges
According to the latest updated data (January 16, 2025), Vietnam has reached a milestone of more than 101,313,000 people and an average age of 32.9 years old (with the majority of the population between 15 and 64 years old) [10]. It can be seen that our country’s labor force is extremely abundant, but to increase the economy comprehensively, workers must have solid technical skills and expertise. This is a shortcoming of Vietnam when the number of intellectual human resources is not enough to directly serve factories and plants, but must be sought abroad.
Competition
Competition between businesses can be the reason why new investors hesitate
Although competition between investors and business owners is inevitable to help the economy grow more effectively, if competition occurs beyond what is necessary, new investors will have a “cautious” mindset and consider more carefully. This leaves Vietnam with a number of opportunities to attract both domestic and foreign investment.
Conclusion
Vietnam’s industrial policy, coupled with strong government support and a dynamic economy, offers unparalleled opportunities for investors and businesses looking to expand. With booming sectors such as manufacturing, electronics, renewable energy, infrastructure and logistics, the country is poised for a major transformation, particularly the opportunity to become a global semiconductor hub [11]. The government’s focus is on improving the regulatory framework, investing in infrastructure and promoting innovation to ensure an environment conducive to sustainable growth. For businesses looking to tap into Vietnam’s potential, now is the time to act and secure a foothold in this rapidly growing market.
References:
[1] Vien Kiem sat Nhan dan Toi cao. (2025). Chinh sach phat trien cong nghiep quoc gia den nam 2030. Vksndtc.gov.vn. http://vksndtc.gov.vn.
[2] Hoang Ngan. (2025, January 7). Doanh thu nganh cong nghiep cong nghe so Viet Nam dat hon 151 ty USD trong nam 2024. Retrieved January 15, 2025, from DCCA – Lien minh sang tao noi dung so Viet Nam website: https://www.dcca.org.vn/doanh-thu-nganh-cong-nghiep-cong-nghe-so-viet-nam-dat-hon-151-ty-usd-nam-2024.
[3] Tap chi cong san. (2018). Retrieved January 16, 2025, from Tap chi Cong san website: https://www.tapchicongsan.org.vn/web/guest/kinh-te/-/2018/910402/chinh-sach-cong-nghiep-xanh-huong-toi-su-phat-trien-ben-vung-o-viet-nam.aspx.
[4] Nganh cong nghiep dien tu Viet Nam nhieu loi the va tiem nang phat trien. (2024, September 12). Retrieved January 16, 2025, from moit.gov.vn website: https://moit.gov.vn/tin-tuc/phat-trien-cong-nghiep/nganh-cong-nghiep-dien-tu-viet-nam-nhieu-loi-the-va-tiem-nang-phat-trien.html.
[5] (2017). Retrieved January 16, 2025, from Mof.gov.vn website: https://mof.gov.vn/webcenter/portal/vclvcstc/pages_r/l/chi-tiet-tin?dDocName=MOFUCM195235.
[6] Tan, M. (2024, November 9). Viet Nam dang o vi the tot hut “lan song” moi dau tu vao nganh cong nghiep gia tri cao. Thoi Bao Tai Chinh Viet Nam. https://thoibaotaichinhvietnam.vn/viet-nam-dang-o-vi-the-tot-hut-lan-song-moi-dau-tu-vao-nganh-cong-nghiep-gia-tri-cao-163642.html
[7] Diem sang cua san xuat cong nghiep nam 2024. (2024). General Statistics Office of Vietnam. https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2025/01/diem-sang-cua-san-xuat-cong-nghiep-nam-2024/
[8] LE MY. (2024, February 9). Nhu cau dau tu co so ha tang va co hoi von cua doanh nghiep. Diendandoanhnghiep.vn. https://diendandoanhnghiep.vn/nhu-cau-dau-tu-co-so-ha-tang-va-co-hoi-von-cua-doanh-nghiep-10128205.html
[9] Hai Van. (2024, October 31). Nganh logistics can chuyen doi de but pha trong ky nguyen moi. Nhip Song Kinh Te Viet Nam & The Gioi. vhttps://vneconomy.vn/nganh-logistics-can-chuyen-doi-de-but-pha-trong-ky-nguyen-moi.htm
[10] hoavic. (2017, April 21). Dan so Viet Nam moi nhat (2025) – cap nhat hang ngay – DanSo.org. DanSo.org. https://danso.org/viet-nam/
[11] baochinhphu.vn. (2024, October 2). Viet Nam co co hoi tro thanh trung tam cong nghiep ban dan toan cau. Baochinhphu.vn. https://baochinhphu.vn/viet-nam-co-co-hoi-tro-thanh-trung-tam-cong-nghiep-ban-dan-toan-cau-102241002094034294.htm
