Green and sustainable industry: An inevitable trend

Ho Chi Minh City plays a pivotal role in driving economic development across the Southern key economic region and the country as a whole. Its industrial progress serves as a catalyst for regional development, especially in the context of the global surge in Industry 4.0.

Transformation is inevitable

To date, the city’s industrial parks and export processing zones have largely fulfilled their objectives of attracting investment, developing industrial production, creating jobs, facilitating the transfer of technological know-how and advanced management practices, boosting export value, and gradually integrating into global production networks and value chains.

This has significantly contributed to State budget revenues and supported Ho Chi Minh City’s socio-economic development towards advanced industrialisation.

However, the development of industrial parks in recent years has also revealed limitations. Investment efficiency remains low, value-added output is limited, resource use is inefficient and labour-intensive industries still dominate. Meanwhile, technical and social infrastructure remains incomplete.

At present, several industrial parks have completed half of their operational cycle. By 2041 and in the years that follow, a number of parks will reach the end of their 50-year land lease period with the State.

As a result, many enterprises have become hesitant to expand production or renew machinery and technology, while some industrial parks are struggling to attract new investment projects, particularly those with high intellectual content or advanced science and technology.

According to the Ho Chi Minh City Institute for Development Studies, comparing industrial development nationwide with that of Ho Chi Minh City shows that national industrial growth in recent years has been faster than that of the city.

This underscores the need for new industrial development orientations. Going forward, the city must prioritise in-depth transformation and develop ecological industrial parks and high-tech parks, while attracting high-tech sectors with spillover effects that can lead and create industry-wide linkages.

Associate Professor Dr Tran Hoang Ngan, former Director of the Ho Chi Minh City Institute for Development Studies, noted that the city has been pursuing industrial transformation for years. Rather than relying on traditional, labour-intensive and resource-intensive industries, the city is shifting towards high-tech, advanced and environmentally friendly industries, reducing greenhouse gas emissions.

Building an ecosystem for transformation

To achieve sustainable growth, experts emphasise that Ho Chi Minh City must adopt a selective approach to industrial development, focusing on high-tech sectors with high value-added potential.

The city should prioritise industrial development rooted in innovation, dynamism and creativity, capitalising on Industry 4.0 achievements to advance smart manufacturing and consolidate its position as the industrial leader of the Southern key economic region and the nation.

Rich McClellan, Country Director of the Tony Blair Institute for Global Change in Viet Nam, stressed that Ho Chi Minh City is at a critical juncture in its economic development, with strategic decisions on industrial priorities set to shape its future.

By focusing on sectors such as electronics and high-tech manufacturing, the digital economy, IT services, renewable energy and green technologies, and green finance, the city can leverage its competitive advantages to integrate more deeply into global supply chains.

Ho Chi Minh City aims to transform its industrial base into the national hub for high-tech industries and a nucleus of innovation in the near future.

To achieve this, according to Dr Tran Du Lich, Chairman of the Advisory Council for the Implementation of Resolution 98 (Resolution No. 98/2023/QH15 dated 24 June 2023 of the National Assembly on piloting specific mechanisms and policies for Ho Chi Minh City’s development), the city must establish a transformation ecosystem built on three key pillars:

The first is an appropriate, transparent and clear institutional framework, with the State acting as an enabling force through policy support.

The second is developing adequate infrastructure, such as transport and digital infrastructure, to support transformation.

The third, and equally crucial, is human resources. To develop semiconductors, AI, the Internet of Things (IoT) and related fields, the city must cultivate a skilled workforce.

Together, these three pillars form a transformative ecosystem that enables fast and sustainable industrial transformation. “Ho Chi Minh City does not need to focus on what it produces, but on how it produces, with new technologies. That is what matters in the global value chain,” Dr Tran Du Lich affirmed.

Link to the original article