Judicious Use of AI Can Help Vietnam Become a High-income Country

Vietnam’s goal for high-income status by 2045 requires roughly 5.5% annual growth in income per capita, versus 5% historically. We offer thoughts on whether artificial intelligence (AI) can supply the missing margin. Reviewing the growing AI literature, we find that appropriate policies are instrumental. Vietnam has several advantages, including scoring a high score above what its income predicts on government AI readiness and its AI diffusion rate is rising faster than in any other low-income or middle-income economy. Borrowing results from existing cross-country evidence on digital adoption, we construct three tentative growth scenarios on AI adoption. Broad and deep adoption could help the country reach its goal earlier than the baseline without any adoption. Realizing that dividend depends on four priorities: teachers first, electricity and Vietnamese-language data, an open-source latecomer strategy reaching millions of small firms, and institutions that pay for talent. These findings can be relevant to other developing countries.