Vietnamese Companies Pivot to High-Tech Innovation as Low Labor Costs Lose Advantage

2026-08-23 global

Ho Chi Minh City, Saturday, 22 August 2026.
At the InnoEx 2026 forum in Ho Chi Minh City, business leaders addressed rising labor costs by shifting focus toward artificial intelligence, green technology, and digital innovation.

The Inflection Point for Vietnamese Business

Global economic experts and Vietnamese business leaders convened in Ho Chi Minh City on 19 and 20 August 2026 for the InnoEx Forum 2026, operating under the theme ‘The Inflection Point – Where Global Shifts Fuel Business Reinvention’ [1][3]. As Southeast Asia faces rising labor costs and changing supply chain expectations, executive discussions centered on shifting from traditional low-cost manufacturing toward technology-driven innovation and sustainability [1]. The event, held at the Thiskyhall Sala Convention Center in Thu Duc City, brought together over 4,000 CEOs, founders, and senior leaders alongside representatives from more than 70 international investment funds [2][4]. This gathering served as a critical platform to address the erosion of traditional competitive advantages for Vietnamese businesses in a rapidly evolving global trade dynamic [1].

GDP Growth and High-Income Goals

Vietnam achieved 8% GDP growth in 2025, marking the highest rate in ASEAN, yet the nation requires an average annual growth rate of approximately 6% through 2045 to reach high-income economy status [1]. To support this transition, Ho Chi Minh City has set strategic goals for the 2026–2030 period, targeting a minimum annual regional GDP (GRDP) growth of 10% [2][8]. Furthermore, the city aims for the digital economy to constitute approximately 40% of GRDP by 2030, necessitating a transition away from traditional reliance on capital and labor advantages [2][3]. Leaders emphasized that strategic pivoting driven by ambition is essential to create the next advantage rather than merely ensuring survival [1].

Digital Infrastructure and Data Reliability

During the ‘Pivot or Defense?’ panel, experts highlighted that data reliability, rather than volume, is the critical barrier for Vietnamese businesses in facilitating transactions and cross-border cooperation [1]. Mr. Nguyen Huy, Head of Data Technology Department at the National Data Association, noted that data only creates a competitive advantage when it can be well authenticated and seamlessly interconnected [1]. The forum agenda included specific sessions on operational excellence and innovation sectors, focusing on AI, semiconductors, and biotechnology to shape competitiveness in the next 5 to 10 years [2][4]. Technology adoption must be driven by real business needs, answering what problem it solves and what value it creates for society [3].

City-Level Ambitions and GRDP Targets

Ho Chi Minh City leverages existing strengths in finance, manufacturing, and logistics to transition from a technology importer to a hub for technology research and commercialization [3]. The event organizers aimed to facilitate networking for over 4,000 leaders, with leaders comprising 13.333 of the anticipated 30,000 total participants at the venue [6]. Strategic initiatives include relaxing institutional frameworks to allow secure technology testing and increasing open data access for private and academic collaboration [8]. The city intends to advance digital infrastructure and incentivize global technology corporations to establish R&D centers in the region [3].

Sustainability and Green Innovation

Eleven Vietnamese innovation projects under the Plastics Innovation Programme presented solutions that have successfully prevented, collected, or treated over 750 metric tons of plastic waste [6]. These projects align with the Law on Environmental Protection and extended producer responsibility regulations, utilizing diverse methodologies including alternative materials and innovative financing [6]. The Green Innovation Fellowship 2026 winner was awarded to Việt Nam Food and Parongbong Raw Lab, recognizing achievements with the potential to create positive impact for communities [5]. The forum’s Green Innovation Summit focused on what powers the next advantage in the context of evolving sustainability standards [4].

Startup Ecosystem and Investment Flows

The Startup Wheel 2026 Vietnam Track Winner was announced as Viet Dynamic, while Aqufish won the International Track during the closing ceremony [5]. Bvarta, a Top 30 Finalist in the Startup Wheel 2026 International Track, showcased its location intelligence platform to demonstrate the utility of spatial data for cross-border business expansion [7]. The event concluded on 20 August 2026 with an emotional recognition ceremony celebrating outstanding projects and pioneering individuals driving innovation forward [5]. InnoEx 2026 successfully connected market demand with technology solutions, linking domestic businesses with international knowledge networks [3].

Sources

Supply Chains Southeast Asia