From Korea to Vietnam: A Smart Industrial Strategy for the Future
South Korea's rapid transformation from a war-torn nation into a global economic powerhouse is one of the most compelling success stories of the modern era. In just a few decades, it emerged as a leader in technology, manufacturing, and cultural influence, home to global brands like Samsung, Hyundai, and LG, as well as a dominant force in entertainment through K-pop and cinema.
Vietnam, which has also experienced remarkable economic growth over the past 30 years, now faces a critical question: Can it follow Korea’s path to become a global leader in industry and innovation?
As someone who has studied Korea’s development in depth through books like Korea: The Impossible Country (Daniel Tudor), Bad Samaritans (Ha-Joon Chang), and The New Korea: An Inside Look at South Korea’s Economic Rise (Myung Oak Kim & Sam Jaffe), I believe that Vietnam has the potential to achieve similar success. However, Vietnam’s approach must be carefully adapted to its own strengths and weaknesses.
This article will explore how Korea succeeded, why Vietnam’s early economic strategies were different, and what lessons Vietnam must apply to become a high-tech, innovation-driven economy.
Korea’s Economic Transformation: A Model of State-Guided Capitalism
In the 1950s and 1960s, South Korea was one of the poorest nations in the world, with a war-ravaged economy, a largely illiterate workforce, and almost no natural resources. Yet, within a few decades, it became a global leader in high-tech industries.
This transformation was not driven by free-market policies alone—it was the result of strategic government planning combined with strong private-sector leadership.
The Key Pillars of Korea’s Economic Success
Industrial Policy & Strategic Government Support
- The Korean government actively guided industrial growth, choosing specific industries—steel, shipbuilding, automobiles, semiconductors, and electronics—as priorities.
- These industries received low-interest loans, tax incentives, and government contracts.
- However, support was conditional—only companies that achieved export success continued to receive backing.
The Rise of Chaebols (Corporate Giants)
- Large, family-run conglomerates, known as chaebols, became the backbone of Korea’s economy.
- Samsung, Hyundai, and LG received government support, but they also had to compete globally to survive.
- Unlike state-owned enterprises in some socialist economies, chaebols remained private and independent, driving innovation and efficiency.
Export-Led Growth
- Korea did not rely on domestic consumption—instead, it forced its industries to compete in global markets.
- By the 1990s, exports made up over 50% of Korea’s economy, ensuring that its industries were internationally competitive.
Massive Investment in Technology & R&D
- Korea now spends over 4.5% of its GDP on research and development (R&D)—one of the highest rates in the world.
- This long-term investment allowed Korea to move from low-cost manufacturing to high-tech industries like semiconductors, AI, and robotics.
Education & Workforce Development
- Korea prioritized STEM education, ensuring that its workforce had the skills to work in high-tech industries.
- Strong university-business collaboration helped accelerate innovation.
Vietnam’s Economic Evolution: From Central Planning to Market Reforms
Vietnam’s economic growth since the Đổi Mới reforms of 1986 has been impressive. The country has become a global manufacturing hub, attracting massive foreign investment and becoming a major exporter of textiles, electronics, and agricultural products.
However, there is one major difference between Korea’s path and Vietnam’s current trajectory: Korea built global companies, while Vietnam remains dependent on foreign investment and multinational corporations.
A Smart Industrial Strategy for Vietnam
Vietnam’s economic transformation over the past few decades has been remarkable. It has grown from a primarily agrarian economy into one of the world’s most important manufacturing hubs. However, as global competition increases and new technologies reshape industries, Vietnam cannot afford to remain a low-cost manufacturing base. To become a truly developed nation, Vietnam must define its own path—a strategy that builds on its strengths, learns from Korea’s successes, and avoids past inefficiencies.
Economic development is not a linear process, and no country follows a rigid timeline. Instead of focusing on specific deadlines, Vietnam must focus on key strategic priorities that will propel it forward. The country must make bold yet well-calculated moves in areas that will determine its long-term success.
1. Strengthening Vietnam’s Industrial Base: From Assembly to Innovation
Vietnam has successfully attracted foreign direct investment (FDI), making it a leading manufacturing hub for global corporations like Samsung, Apple, and Nike. However, a developed economy does not just assemble products for others—it creates and exports its own high-value products.
To move up the value chain, Vietnam must:
- Develop homegrown technology firms that design and manufacture high-tech components, rather than just assembling them.
- Strengthen precision manufacturing and advanced engineering, allowing Vietnamese firms to supply high-tech industries such as semiconductors, aerospace, and robotics.
- Encourage R&D investment and technology transfer, ensuring that Vietnam is not just a producer but also an innovator.
2. Building Global Vietnamese Brands
One of Korea’s greatest achievements has been the creation of global corporate champions. Samsung, Hyundai, and LG were not always world-class companies, but the Korean government and business leaders pushed them to think globally and continuously improve.
Vietnam already has potential global players such as:
- VinFast (Electric Vehicles and Batteries)
- Viettel (Telecommunications and Technology)
- FPT (Software, AI, and Digital Transformation)
For Vietnam to truly establish its presence on the global stage, these companies—and others—must:
- Expand internationally, not just focus on the domestic market.
- Compete on technology and innovation, not just cost.
- Build strong brand identities that are recognized worldwide.
A strong brand is more than just a product—it represents trust, reliability, and innovation. Vietnam must shift from being a “factory for foreign brands” to being a country that creates, owns, and exports its own world-class brands.
3. Becoming a High-Tech Powerhouse
Technology is the foundation of economic growth in the 21st century. Countries that dominate AI, semiconductors, and clean energy will lead the global economy.
Vietnam must:
- Increase R&D spending from the current ~1% of GDP to a level that allows it to compete with Korea and other advanced nations.
- Develop a semiconductor strategy, ensuring it is not dependent on foreign chip suppliers.
- Invest in AI, biotech, and automation, future-proofing its economy for the digital age.
- Strengthen university-industry collaboration, so that research leads to real-world applications.
Vietnam’s young, tech-savvy population is an advantage. With the right investments, Vietnam can become a leader in emerging technologies rather than a follower.
4. Building a Strong National Talent Base
A developed economy is built on human capital. Korea’s success was largely driven by its investment in education, particularly in science, technology, engineering, and mathematics (STEM).
Vietnam must:
- Prioritize STEM education to ensure its workforce is prepared for the demands of a high-tech economy.
- Encourage critical thinking and entrepreneurship, moving beyond rote memorization in education.
- Attract and retain top talent, including Vietnamese professionals working abroad.
The key to Vietnam’s future is not just attracting factories, but creating the next generation of inventors, engineers, and entrepreneurs.
5. Expanding Vietnam’s Soft Power: The “Vietnamese Wave”
Beyond technology and industry, Korea’s rise has been fueled by its ability to export its culture—K-pop, K-dramas, and Korean fashion. Vietnam has an opportunity to do the same.
To increase its global influence, Vietnam should:
- Promote V-pop, cinema, and fashion internationally.
- Leverage tourism and cuisine—Vietnamese food is already world-famous, but it can be further developed as a global brand.
- Support digital content creators, positioning Vietnam as a hub for creative industries.
A country’s global standing is not just measured by its GDP but by how it influences global culture and ideas. A strong cultural identity can make Vietnam more attractive to global investors, talent, and consumers.
6. Strengthening Economic and Trade Diplomacy
Vietnam has successfully built strong trade relationships, but it must go further. The world is shifting away from traditional trade models, and Vietnam must secure its place in the evolving global economy.
Key priorities include:
- Diversifying trade partnerships beyond reliance on China and the U.S.
- Leading within ASEAN, using regional influence to negotiate stronger economic agreements.
- Positioning itself as a hub for global supply chains, benefiting from companies shifting production away from China.
By being strategic in its trade policies, Vietnam can strengthen its economic resilience and ensure sustainable long-term growth.
7. A Smarter Role for Government in Industrial Development
Korea’s success was built on smart government planning, not government control. Vietnam must ensure that its government acts as a facilitator, not a bureaucratic obstacle.
The government should:
- Support businesses with incentives and infrastructure, but not micromanage them.
- Encourage competition rather than creating monopolies or protecting inefficient companies.
- Ensure that state support is based on performance, not politics.
The goal is to create an agile, responsive economic system where businesses have the freedom to innovate while benefiting from government-backed long-term strategy and planning.
A Vision for the Future
Vietnam’s journey to becoming a developed nation will not happen overnight. There is no fixed timeline, but there is a clear path forward.
- Strengthen the industrial base—move from assembly to innovation.
- Build global Vietnamese brands that can compete with the world’s best.
- Become a leader in high-tech industries like AI, semiconductors, and green energy.
- Invest in talent and education to create the workforce of the future.
- Expand Vietnam’s soft power through culture, entertainment, and global branding.
- Strengthen economic diplomacy and trade networks to secure Vietnam’s role in global supply chains.
- Ensure government acts as a strategic partner, not a controller, guiding development with smart policies.
Vietnam has already proven that it is capable of rapid growth. The next stage is about moving from “catching up” to “leading.” If Vietnam embraces a smart, innovation-driven strategy, it has the potential to become one of Asia’s great success stories.
The future is unwritten, but Vietnam has the talent, ambition, and opportunity to shape its own destiny. The only question is: will it seize the moment?
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