IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/100712.html
   My bibliography  Save this paper

Science and technology policies and the middle-income trap: lessons from Vietnam

Author

Listed:
  • Klingler-Vidra, Robyn
  • Wade, Robert

Abstract

As Vietnam crossed the World Bank’s threshold from ‘low income’ to ‘lower middle-income’ in 2010 the government and aid donors started to speak about ‘the middle-income trap’ as a central problem; and to frame ‘science and technology (S&T) policy’ as a means of sustaining economic growth and thereby avoiding the trap. They identified China and its S&T policy as a model, and pointed to Intel’s $1 billion facility as evidence of a burgeoning technology hub. Yet in the years that followed, Vietnam’s S&T policy has limped along, with efforts simply to boost the number of Silicon Valley-styled start-ups rather than to pursue a ‘Made in China 2025’-like programme. This paper reveals two main reasons. First, the Ministry of Science and Technology is a weak ministry with little budget, unable to persuade other ministries to cooperate in more ambitious and capital-intensive strategies. Second, excitement around S&T policies was fuelled by an influx of high-tech Vietnamese returning home after the 2008 Global Financial Crisis, lending support for building start-up ecosystems. These mechanisms are reinforced by Western aid agencies’ support for this narrow S&T policy conception. Findings are based on policy documents and interviews conducted with S&T policy-makers, aid donor staff, and start-up investors between 2012 and 2018.

Suggested Citation

  • Klingler-Vidra, Robyn & Wade, Robert, 2020. "Science and technology policies and the middle-income trap: lessons from Vietnam," LSE Research Online Documents on Economics 100712, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100712
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/100712/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wade, Robert H., 2017. "The American paradox: ideology of free markets and the hidden practice of directional thrust," LSE Research Online Documents on Economics 69765, London School of Economics and Political Science, LSE Library.
    2. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    3. Robert H. Wade, 2017. "The American paradox: ideology of free markets and the hidden practice of directional thrust," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 859-880.
    4. Jakob Edler & Jan Fagerberg, 2017. "Innovation policy: what, why, and how," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(1), pages 2-23.
    5. Robert H. Wade, 2018. "The Developmental State: Dead or Alive?," Development and Change, International Institute of Social Studies, vol. 49(2), pages 518-546, March.
    6. Wade, Robert Hunter, 2016. "Industrial policy in response to the middle-income trap and the Third Wave of the digital revolution," LSE Research Online Documents on Economics 69649, London School of Economics and Political Science, LSE Library.
    7. Jorge Niosi, 2008. "Technology, Development and Innovation Systems: An Introduction," Journal of Development Studies, Taylor & Francis Journals, vol. 44(5), pages 613-621.
    8. Wade, Robert H., 2018. "The developmental state: dead or alive?," LSE Research Online Documents on Economics 87356, London School of Economics and Political Science, LSE Library.
    9. Indermit Gill & Homi Kharas, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications - Books, The World Bank Group, number 6798.
    10. Douglas B. Fuller, 2013. "Building Ladders out of Chains: China's Hybrid-led Technological Development in Disaggregated Value Chains," Journal of Development Studies, Taylor & Francis Journals, vol. 49(4), pages 547-563, April.
    11. Pietro Masina, 2010. "Vietnam between developmental state and neoliberalism: the case of the industrial sector," Working Papers 1007, c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione.
    12. Nguyen Van Thang & Nick Freeman, 2009. "State-owned enterprises in Vietnam: are they 'crowding out' the private sector?," Post-Communist Economies, Taylor & Francis Journals, vol. 21(2), pages 227-247.
    13. Ken Warwick & Alistair Nolan, 2014. "Evaluation of Industrial Policy: Methodological Issues and Policy Lessons," OECD Science, Technology and Industry Policy Papers 16, OECD Publishing.
    14. Tran Ngoc Ca, 2006. "Universities as drivers of the urban economies in Asia : the case of Vietnam," Policy Research Working Paper Series 3949, The World Bank.
    15. Autio, Erkko & Rannikko, Heikki, 2016. "Retaining winners: Can policy boost high-growth entrepreneurship?," Research Policy, Elsevier, vol. 45(1), pages 42-55.
    16. Robert H Wade, 2016. "Industrial Policy in Response to the Middle-income Trap and the Third Wave of the Digital Revolution," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 469-480, November.
    17. Paus, Eva, 2014. "Latin America and the middle-income trap," Financiamiento para el Desarrollo 36816, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Nee, Victor & Opper, Sonja, 2012. "Capitalism from Below: Markets and Institutional Change in China," Economics Books, Harvard University Press, number 9780674050204, Spring.
    19. Rainer Kattel & Mariana Mazzucato, 2018. "Mission-oriented innovation policy and dynamic capabilities in the public sector," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(5), pages 787-801.
    20. Martin Painter, 2005. "The Politics of State Sector Reforms in Vietnam: Contested Agendas and Uncertain Trajectories," Journal of Development Studies, Taylor & Francis Journals, vol. 41(2), pages 261-283.
    21. , Aisdl, 2016. "The Relationship between Innovation Capabilities and Efficiency of Foreign Invested Enterprises in Vietnam," OSF Preprints j78cs, Center for Open Science.
    22. Dan Breznitz & Darius Ornston & Steven Samford, 2018. "Mission critical: the ends, means, and design of innovation agencies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(5), pages 883-896.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klingler-Vidra, Robyn & Tran, Ba Linh & Chalmers, Adam William, 2021. "Transnational experience and high-performing entrepreneurs in emerging economies: Evidence from Vietnam," Technology in Society, Elsevier, vol. 66(C).
    2. David B. Audretsch & Antje Fiedler, 2022. "The Vietnamese entrepreneurship paradox: how can entrepreneurs thrive without political and economic freedom?," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1179-1197, August.
    3. Wankeun Oh & Seung Won Kang, 2022. "Attribution of Changes in Vietnam’s Labor Productivity," Sustainability, MDPI, vol. 14(11), pages 1-19, May.
    4. Klingler-Vidra, Robyn & Tran, Ba Linh & Chalmers, Adam William, 2021. "Transnational experience and high-performing entrepreneurs in emerging economies: evidence from Vietnam," LSE Research Online Documents on Economics 110756, London School of Economics and Political Science, LSE Library.
    5. Hoang, Giang & Luu, Tuan Trong & Le, Thuy Thu Thi & Tran, Anh Kim Thi, 2022. "Dark Triad traits affecting entrepreneurial intentions: The roles of opportunity recognition and locus of control," Journal of Business Venturing Insights, Elsevier, vol. 17(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wade, Robert H., 2018. "The developmental state: dead or alive?," LSE Research Online Documents on Economics 87356, London School of Economics and Political Science, LSE Library.
    2. Janusz Heller & Rafal Warzala, 2018. "Is Poland in a middle income trap? A theoretical and empirical analysis," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 17(4), pages 367-381, December.
    3. Upalat Korwatanasakul, 2023. "Thailand and the Middle-Income Trap: An Analysis from the Global Value Chain Perspective," PIER Discussion Papers 202, Puey Ungphakorn Institute for Economic Research.
    4. Ioanna Kastelli & Lukasz Mamica & Keun Lee, 2023. "New perspectives and issues in industrial policy for sustainable development: from developmental and entrepreneurial to environmental state," Review of Evolutionary Political Economy, Springer, vol. 4(1), pages 1-25, April.
    5. Robert Wade, 2018. "Escaping the periphery: The East Asian ‘mystery’ solved," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    6. Grashof, Nils, 2020. "Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework," Papers in Innovation Studies 2020/4, Lund University, CIRCLE - Centre for Innovation Research.
    7. Constantino Hevia & Norman V. Loayza & Claudia Meza-Cuadra, 2023. "Industrial Policies vs Public Goods under Asymmetric Information," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 46(91), pages 39-52.
    8. Robert Wade, 2018. "Escaping the periphery: The East Asian 'mystery' solved," WIDER Working Paper Series wp-2018-101, World Institute for Development Economic Research (UNU-WIDER).
    9. Grashof, Nils, 2021. "Putting the watering can away –Towards a targeted (problem-oriented) cluster policy framework," Research Policy, Elsevier, vol. 50(9).
    10. Wade, Robert H., 2021. "The opening of minds towards more active government that steers the production structure," LSE Research Online Documents on Economics 113924, London School of Economics and Political Science, LSE Library.
    11. Csontos, Tamás Tibor, 2023. "A magyar felzárkózási modell ágazati alapú, regionális és időbeli összehasonlító elemzése [Sectoral comparative analysis of the Hungarian catching-up model]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 167-191.
    12. , Aisdl, 2019. "What Citizenship for What Transition?: Contradictions, Ambivalence, and Promises in Post-Socialist Citizenship Education in Vietnam," OSF Preprints jyqp5, Center for Open Science.
    13. Magnus Henrekson & Anders Kärnä & Tino Sanandaji, 2022. "Schumpeterian entrepreneurship: coveted by policymakers but impervious to top-down policymaking," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 867-890, July.
    14. Tyce, Matthew, 2020. "Beyond the neoliberal-statist divide on the drivers of innovation: A political settlements reading of Kenya’s M-Pesa success story," World Development, Elsevier, vol. 125(C).
    15. Glawe, Linda & Wagner, Helmut, 2020. "China in the middle-income trap?," China Economic Review, Elsevier, vol. 60(C).
    16. Paus, Eva & Robinson, Michael, 2022. "Firm-level innovation, government policies and the middle-income trap: insights from five Latin American economies," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    17. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
    18. Fu-Hsuan Chen & Hao-Ren Liu, 2021. "Evaluation of Sustainable Development in Six Transformation Fields of the Central Taiwan Science Park," Sustainability, MDPI, vol. 13(8), pages 1-14, April.
    19. Luo, Anran & Rodríguez, Fabricio & Leipold, Sina, 2020. "Explaining the political gridlock behind international Circular Economy: Chinese and European perspectives on the Waste Ban," SocArXiv uyw5g, Center for Open Science.
    20. Leonard Prochaska & Daniel Schiller, 2021. "An evolutionary perspective on the emergence and implementation of mission-oriented innovation policy: the example of the change of the leitmotif from biotechnology to bioeconomy," Review of Evolutionary Political Economy, Springer, vol. 2(1), pages 141-249, April.

    More about this item

    JEL classification:

    • N0 - Economic History - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:100712. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.