Vietnam Reform and Development Forum

Venue: Hanoi, Viet Nam

• H.E. Mr. Nguyen Xuan Phuc, Prime Minister, Socialist Republic of Viet Nam
• H.E. Mr. Nguyen Chi Dung, Minister, Ministry of Planning and Investment

I am honored and delighted to deliver this statement on Institutions for Inclusive Innovation on behalf of the United Nations in Viet Nam. At the outset let me take this opportunity to congratulate the Government of Viet Nam on the progress made in promoting innovation as evidenced by the proposals for the establishment of the National Innovation Center, the World Economic Forum's Center for the Fourth Industrial Revolution and other initiatives.

Promoting inclusive innovation is essential for Viet Nam to pursue rapid, sustainable growth and achieve the Sustainable Development Goals. To quote President Ho Chi Minh Innovation (sáng kiến) is "the valuable asset of the nation" - a statement that has become even more relevant with the passage of time. Viet Nam is at a key turning point at which decisions made by government regarding the scale and speed of innovation, how it is generated and diffused, and who benefits, will be critical to the quality of growth and the achievement of the 2030 Agenda for Sustainable Development.

Institutions play an important role in the generation and deployment of innovations. Drawing from global experience, we would like to highlight 4 key recommendations:

1. Innovation is highly contextual. Models and institutions from abroad offer valuable lessons but must be adapted to national conditions and the local context. In Viet Nam, priority should be given to stimulating innovation, by accelerating technological diffusion (measured by the number of firms adopting new technologies) and penetration (measured by the scale and depth of technology application within firms) within Micro Small and Medium Enterprises (MSMEs), which make up the majority of the country's business sector to boost productivity and create more productive jobs for all. The engagement of women and men, and especially the most vulnerable people—including ethnic minorities, people in remote and disaster-prone areas, children from economically disadvantaged households, migrants and people with disabilities—is vital to accelerate inclusive development through innovation.
2. Promoting inclusive innovation must aim at increasing the participation of all actors and spreading the benefits of innovation equally. The initiative to establish Inclusive Innovation Centers under the Philippine Innovation Act is one among many international examples of efforts to engage micro and small firms, women and people from marginalized communities in addressing development challenges. In Viet Nam, different actors are engaged in social innovations at local levels, such as inter-generation clubs linking the state social protection system and community institutions to support older people, community HIV testing to bring services closer to vulnerable or marginalized people, telemedicine networks that extend maternal and child care services to remote locations and minority groups, and affordable e-commerce and e-payment services for rural populations and ethnic minority women provided by Viettel Post and the UN. The implementation of the National Strategy for Cultural Industries can provide numerous opportunities for youth - a natural source of innovation -to lead the development of the creative economy.
3. The role of the State is key to leading and shaping innovation. Investing in 21st century skills, science and entrepreneurial clusters is critical but not sufficient. The State leads innovation in many successful nations as Mariana Mazzucato has described in her important book The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Government initiatives extend beyond investment in institutions and building ecosystems for innovation to include R&D and "social R&D." Japan and the Republic of Korea have successfully implemented models to support pre-commercial testing and product pathways to commercial viability. State investment in human capital through education, health and social protection is fundamental and strategic as the innovation and competitiveness of tomorrow start with investments today in the early years of life. State investment in nutrition, water and sanitation, and integrating digital learning, green and transferable skills into pre-primary, primary, secondary and technical and vocational education and training, is vital to enhance the cognitive and physical development of girls and boys.
4. New institutions are needed to spread new technologies and innovations.

• Universities as engines of innovation - have expanded their remit beyond teaching and research to operate as innovation engines and hubs in their communities. Digital education has created communities of learners that span the globe, sharing ideas and solving problems across the previously impassable barriers of space, time and language.
• Incentivizing Parastatal organizations to produce and spread new technologies and innovations. The Fraunhofer network of institutes in Germany undertakes 6-8,000 applied research projects annually, with the mixed funding from government and the private sector. The Shenzhen Open Innovation Lab in China and the Catapults Centers in the UK are examples of well-designed parastatals that combine the resources of the private and public sectors to stimulate innovation and widen access to its benefits.
• Social enterprises and NGOs as social impact innovators - in many countries, including Viet Nam, have applied high-tech and innovative solutions to address health, economic and social in the community, including among vulnerable populations.
• Global financing platforms like the Private Financing Advisory Network, a public private partnership co-hosted by the UN that provides business coaching and investor matchmaking services between climate and clean energy projects and private sector investors.

In conclusion, Viet Nam has a unique opportunity to design an innovation ecosystem as part of the Socio-Economic Development Strategy that leaves no one behind, especially the most vulnerable people. The production and use of innovation can generate leaps in productivity, reduce poverty and enable communities to respond to increasingly complex environmental and social challenges. The institutions of innovation that government, private sector and communities design now will be help Viet Nam build a resilient, prosperous future that delivers better opportunities for all Vietnamese people.

The UN stands ready to deepen its support to the Government of Viet Nam and its people in this endeavor.