Vietnam Develops National Science and Technology market
04 August 2021
On July 13, 2021, the government announced the Prime Minister's decision No. 1158/QD-TTG on the program to develop the National Science and Technology market by 2030. With this, the program creates a favorable environment and facilitate Science and Technology market activities. The program also provides opportunities for science and technology companies, including start-ups.
"From an economic perspective, technology is both a factor of production and a positive externality, something that yields positive effects to the society but is not compensated for by the market," says Manh-Hung Tran, Managing Partner cum Head of IP and Tech Practice at BMVN, a member firm of Baker McKenzie in Vietnam. "Economists refer to this as a market failure, a situation where the market cannot self-adjust and government intervention is required. The Vietnamese government's meeting minutes and resolutions indicate that it is well aware of this, hence has focused policy-making on encouraging the development and application of technology, an impetus for economic development."
He says that the recently announced Program to Develop the National Science and Technology Market (Program) by the Prime Minister is part of such a policy trend. Thus, the Program's reference to IP Assets focuses primarily on works of scientific and technological nature, namely inventions and utility solutions.
"Vietnamese intellectual property law does recognize and provide mechanisms to protect such works," he says. "However, in terms of policymaking, economic growth requires entrepreneurs and inventors to be further incentivized. The Program does so by setting quantitative goals to be achieved, based on standards such as the transaction value of scientific and technological commodities, the proportion of those commodities' transactions, the proportion of transactions for technologies imported from developed countries. To realize these goals, the Program sets out a range of consistent and comprehensive measures (i.e. improving policies/regulations; facilitating the market demand; developing market intermediaries; nurturing the human resources; develop the infrastructure) covering the key shortcomings of the current IP assets market that needs to be put in place synchronously. That said, broad policy areas under the Program are to be elaborated by relevant State agencies."
With the current Vietnamese IP law regime already recognized/protected inventions and utility solutions, the program does not directly affect the legal framework, and is to be seen as generic policy directions only; one should await further promulgations by state agencies for detailed evaluation of any changes.
"That, however, does prevent an analysis of the Program's provisions," he says. "We can see that it correctly identifies the main obstacle that inventors and businesses often face, namely transaction costs. For example, although SMEs may have novel ideas, they often lack the resources and means to develop such ideas into practical solutions. Large corporations, on the other hand, seek innovative ideas but often at a huge cost in terms of time, money and effort."
Given that, one would see that solutions offered under the Program are centred around driving down transaction costs.
They include:
- Encourage enterprises to establish science and technology associations;
- Support organizations and individuals in evaluating, valuing, and assessing the values of technologies;
- Develop the science and technology market's intermediaries, especially those in the private sector, develop networks of intermediaries; encourage the establishment of consulting associations;
- Promote the science and technology market by organizing events both online and offline; expedite cooperation programs with global partners, especially those in countries where Vietnam already signed free trade agreements with.
"These broad directions are expected to pave the way for more specific policies, which hopefully will connect supply and demand in the science and technology market in a more efficient manner," he says. "There are other miscellaneous policies that would benefit participants in the market from both the supply and demand perspectives: Improving the legal framework is beneficial because with clear and defined rights/obligations, parties are provided with more certainty prior to entering into agreements and may avoid costly disputes; Attracting and incentivizing science and technology experts enhance the quality of the Vietnamese labor workforce in the science and technology market, which is beneficial to corporations and investors carrying out businesses in Vietnam; Improving the expertise of government officials clearly helps with administrative procedures, which essentially relate to parties' costs."
Excel V. Dyquiangco
