To achieve double-digit growth during the 2026-2030 period and become a high-income country by 2045, Vietnam needs to proactively adopt a development model suited to its practical conditions and the new economic context.
In this process, a key objective is to transform challenges into drivers of development, turning existing bottlenecks and limitations into opportunities for breakthroughs. This requires Vietnam not only to effectively leverage its existing advantages but also to strongly promote innovation, develop high-quality human resources, enhance science and technology capabilities, and strengthen the economy’s self-reliance.
Lessons from elsewhere
Japan is among the world’s most successful examples of a country reaching high-income status. From 1965 to 1995, it experienced an extraordinary three-decade economic boom, with average annual nominal GDP growth of 14.68 per cent. Widely known as Japan’s economic miracle, this period transformed the country into one of the world’s largest economies.
Yet after three decades of rapid expansion, Japan entered a prolonged period of stagnation. Between 1996 and 2025, average nominal GDP stood at around $4.76 trillion, or only 86 per cent of its 1995 level ($5.5 trillion). A key reason was the steady decline in the workforce, coupled with weak productivity growth.
Looking back over six decades, Japan achieved extraordinary economic success in its first 30 years but then struggled to reverse the stagnation in the following 30 years. According to projections by Japan’s National Institute of Population and Social Security Research, the country’s population may shrink to around 50 million by 2100, down 51 per cent from its 2010 peak, and to just 10 million by 2200, a decline of as much as 92 per cent.
Like Japan, South Korea and China have also faced prolonged fertility decline since the 1990s, creating mounting challenges for economic growth, labor supply, and long-term development.
Japan and other countries’ experience offers important lessons for Vietnam. First, Vietnam should avoid a development model based on short-term explosive growth followed by prolonged stagnation. Economic growth must be sustainable, balancing economic expansion with workforce resilience and long-term population stability.
Second, reliance on large-scale immigration to offset labor shortages may become increasingly difficult in the second half of the 21st century. Many high-income economies, including Singapore, the US, Canada, and Australia, have used immigration to sustain growth. However, global labor supply is projected to decline after 2053, intensifying competition for migrant workers and making this model harder to sustain.
Third, sustainable human development must be viewed as the most important foundation for long-term national development. The experiences of Japan, South Korea, China, and other high-income economies show that even advanced economies with strong technology and high GDP per capita may face long-term decline if persistently low fertility erodes population replacement over decades.
R&D workforce and investment
Economic growth in every country is closely tied to the quality and scale of its human resources. In particular, for Vietnam to achieve rapid and sustainable development in the coming decades, human resources for R&D will play a pivotal role.
A country’s GDP per capita is influenced by multiple factors, including R&D workforce density (the number of R&D personnel per 1,000 workers), R&D investment as a percentage of GDP, and the effectiveness of financial markets in supporting startups and venture capital, to name just a few. Among these, R&D workforce density is considered the most influential factor, accounting for as much as 52.65 per cent of a country’s GDP per capita.
In practice, most countries with GDP per capita above $30,000 during the 2024-2025 period recorded R&D workforce density levels of 9 or higher. Vietnam’s R&D workforce density currently stands at only 1.5, while GDP per capita is approximately $4,500. Compared to many countries in the region and globally, this gap remains substantial.
According to current estimates, if Vietnam aims to become a high-income country by 2045, its R&D workforce density will need to increase from the current level of 1.5 to around 5.83. This means the country’s total number of R&D personnel would need to rise from approximately 75,665 at present to nearly 294,000 by 2045.
In addition to developing R&D human resources, investment in R&D as a percentage of GDP is the second-most important factor influencing a country’s GDP per capita. This is considered a foundational resource for promoting innovation, improving labor productivity, and strengthening the economy’s long-term competitiveness.
Many developed economies currently allocate substantial shares of GDP to R&D. Notably, South Korea invests around 4.95 per cent of GDP in R&D, the US 3.45 per cent, and Japan approximately 3.44 per cent.
In contrast, Vietnam currently spends only about 0.5 per cent of GDP on R&D; significantly lower than developed economies and leading innovation-driven countries. Countries with high levels of R&D investment also tend to have higher labor productivity, stronger technological capabilities, and higher GDP per capita. This underscores the particularly important role of science, technology, and innovation in generating new drivers of economic growth.
Five solutions
The greatest risk to Vietnam’s development in the 21st century is unsustainable human development, which could in turn create long-term economic and social risks. In particular, the biggest bottleneck to maintaining average GDP growth of around 10 per cent annually over the course of the next two decades is the risk of a shortage of high-quality human resources in science, technology, and innovation. Without addressing this challenge, the economy may face the risk of falling into the “middle-income trap” and struggle to generate new growth drivers.
To achieve the goal of becoming a high-income country and ensuring rapid, sustainable development during the 2026-2045 period, Vietnam should focus on implementing several key solutions in a synchronized manner.
First, it should decisively uphold the principle that “sustainable human development is the most important foundation for rapid and sustainable development,” while ensuring the restoration of replacement-level fertility by 2030 (2.1 children per woman), or no later than 2035. Long-term population forecasts indicate that if fertility remains around 1.3 children per woman over an extended period, Vietnam’s population could fall to around 46 million by 2200, approximately 22.5 million by 2300, and just 11 million by 2400.
Second, Vietnam should formulate a ten-year plan (2026-2035) to gradually raise the retirement age. As the workforce is projected to begin declining sharply after 2035, increasing the retirement age to around 65 after that period would significantly supplement the country’s labor supply. According to estimates, this measure could add approximately 5 million people to the working-age population during 2036-2100, thereby creating an important basis for sustaining annual GDP growth of 10 per cent.
Third, Vietnam should review labor productivity growth targets for the 2026-2045 period to ensure GDP growth of 10 per cent annually. Currently, Vietnam’s labor productivity growth target for 2026-2030 is set at around 8.5 per cent per year, while actual growth during 2021-2025 was only about 5.1 per cent annually. Vietnam therefore needs to redesign labor productivity targets for each phase and closely align them with strategies for science and technology development, digital transformation, and innovation in order to secure long-term GDP growth objectives.
Fourth, in 2026, Vietnam should immediately formulate and implement a plan to increase its R&D workforce from 75,665 people in 2025 to 294,000 by 2045. This is a critical prerequisite for increasing the country’s R&D workforce density from 1.5 in 2025 to 5.83 by 2045. Without a breakthrough in R&D human resources, the goal of becoming a high-income country by 2045 will not be achievable.
Finally, Vietnam should formulate in 2026 and begin implementing from 2027 a plan to increase total social expenditure on R&D, in line with the roadmap for expanding R&D workforce density. Particular emphasis should be placed on increasing R&D investment from the business sector, given its decisive role in technology commercialization, innovation promotion, and strengthening the economy’s competitiveness.
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