How Innovative is Vietnam?

The following blog originally appeared on VNHELP‘s blog. To see the original post, click here. VNHELP is nonprofit organization that provides humanitarian and development assistance to Vietnam, focusing on individual and community building by tackling the key education and health needs of Vietnam’s poor.

 

How innovative is Vietnam? This is a simple question that can be difficult to answer.

On the one hand, Vietnamese people can be incredibly resourceful. How often do you see parts of a presumably out-of-commission truck strapped to an ox to create a new mobile contraption? (The efficiency of this invention, though, seems questionable.)

On the other hand, Vietnam has lax intellectual property right laws that end up promoting brand imitation rather than innovation. Case in point: Google-branded toilet paper. Probably not what the tech giant had in mind when it wanted to expand to new markets.

One way we can try to measure Vietnam’s innovation is through looking at the number of patents that are filed and granted in Vietnam. According to the World Intellectual Property Organization (WIPO), there were 9047 patents granted in Vietnam between 1995 and 2010. 1326 were filed by foreigners and just 294 of those patents were filed by Vietnamese nationals, which seems a paltry sum. But 7426 of the patents were also filed by people of “unknown” origins, and we might assume that at least some of those unknowns were actually Vietnamese nationals. Worldwide, in the same fifteen year span, Vietnamese nationals were also granted 1 patent in France, 2 in New Zealand, 2 in Romania, 1 in Thailand and 7 in the U.S.

But patents alone may not be able to capture the espirit d’innovation of a country because in today’s world innovation isn’t necessarily about inventing the next big thing. It can be about finding new uses for old resources, or connecting the dots between products or services that didn’t seem related at first. So another way we can try to measure Vietnam’s innovation is by looking at the Global Innovation Index, a joint production of WIPO and INSEAD Business School.

The Innovation Index looks not just at the number of patents or new products coming out of a country, but also at innovation ecosystems. It examines a country’s innovation input, which is built on the strength of  its institutions, human capital and research, infrastructure, market sophistication and business sophistication. It also assesses a country’s innovation output, built around the pillars of creative outputs and knowledge and technology outputs.

Image extracted from the Global Innovation Index’s site

Unfortunately, by these metrics too, Vietnam doesn’t fare too well. Out of 141 countries, Vietnam ranks 76th. This is a drop from last year’s ranking, where Vietnam stood at 51 of 125 countries. Before that, it was 71st in 2010 and 64th in 2009. This year’s top spots went to Switzerland (a country of less than 8 million people, or less than a tenth of Vietnam), Sweden (population size 9 million), and Singapore (with a little over 5 million people). The U.S. ranked 10th and China ranked 34th. Japan, once known as the land of gadget and trinket innovation, came in at 25th.

Within the South East Asia and Oceania region, Vietnam is 12th of 17 countries. Among lower middle income countries, Vietnam looks a little better at 7th of 36 countries.

According to the Index’s country profile of Vietnam, some of Vietnam’s greatest weaknesses are its institutions and its ease of protecting investors. Underdeveloped human capital and research, especially in tertiary education, are problematic. Areas it’s doing well in include PCT patent filing with foreign inventors, creative goods exports, and microfinance gross loans. For the complete country profile, check out this link and select Vietnam under the first appendix.

We’re pleased to see Vietnam doing well with microfinance, and we will continue to work to expand our own microfinance projects to reach more borrowers. In the mean time, we do hope that Vietnam can develop a greater spirit of innovation. And we don’t necessarily need to see new high end products that revolutionize an industry coming out of Vietnam. We believe that innovation is not just an exercise in profit maximization and producing commodities, but also a pursuit of intellectualism, sustainability and optimizing positive social impact. We’re interested in seeing how innovation can introduce existing technologies that help uplift marginalize communities from poverty. There is so much potential for innovation in business, nonprofit sector, and public sector.