Industrialization Process in Vietnam: 40 years of Economic Renovation

Since the comprehensive economic renovation in 1986, the industrialization process in Vietnam has underwent several cognitive transformations and has achieved some remarkable success. The two main breakthroughs in the Communist Party of Vietnam cognitive viewpoint on industrialization were: the transformation of industrialization strategy from import substitution to export led growth; and the adaptation of industrialization process to the specific context of Vietnam. The success of industrialization in Vietnam were evident through: rapid economic growth; economic restructuring in line with global trend; impressive export performance; strengthen relation with key diplomatic partners; and the development of human capital beyond expectation relative to the country’s income level. However, Vietnam’s economy is showing signs of declining growth momentum; specializing in low value-added assembly functions; rising regional disparities and income inequality. This indicates that the country’s industrialization model needs further adaptation in the new global context. The new model needs to: focus more on building an independent and self-reliant domestic economy; build on the foundation of domestic science and technology development; focus on some key industries, such as information technology, electronics, or renewable energy; and prioritize on developing human capital.