The goal of double-digit economic growth (10% or more per year) is not merely a technical indicator, but reflects the aspiration and strategic choice to break the middle-income trap and ultimately surpass it. Macroeconomic quantitative models and the practical "GDP illusion" from the FDI sector indicate that the potential for capital- and resource-intensive models has almost been exhausted.
This article focuses on analyzing the core barriers hindering total factor productivity (TFP); the misallocation of resources; the "paralysis" in the implementation of science and technology (S&T) policies; and the gaps in the governance of public universities. From this, it proposes a new development architecture: Shifting from stable management to controlled, disruptive design, reshaping the governance of public universities, and unlocking "dead capital" to promote green TFP in circular agriculture. To achieve breakthroughs, the economy doesn't need slogans like "taking shortcuts" or unfounded political will, but rather a major institutional overhaul to unleash endogenous creativity.
Keywords: Double-digit growth, total factor productivity (TFP), science and technology institutions, university governance, circular agriculture , middle-income trap, dynamic stability.
1. The GDP illusion, the reality of GNP, and a reminder from quantitative models.
To measure and assess economic growth (the health and size of an economy), people usually rely on core macroeconomic indicators such as: (i) GDP - Gross Domestic Product, the most common measure, calculating the total market value of all final goods and services produced within a country during a given period; (ii) GNP - Gross National Product; (iii) GNI - Gross National Income: Focusing on the income generated by a country's citizens, regardless of their location (domestic or foreign); (iv) GDP per capita - An important indicator for assessing the level of prosperity and average living standards of the population; (v) Economic growth rate (%). In addition, to assess sustainable development and the quality of growth, many other factors are also considered, such as the Human Development Index (HDI); labor productivity; and economic structural transformation. These common economic concepts are found in all economics textbooks.
In short, GDP is used to assess the scale, production capacity, and job creation opportunities at the local level. However, to evaluate the true wealth and living standards of a nation's people, GNI (or GNP) is a more accurate measure. Today, international organizations such as the World Bank often use GNI as a substitute for GNP.
Since the end of 2024, many forums have discussed the issue of double-digit growth, which seems to mean GDP increasing by at least 10% per year. As mentioned above, along with GDP, there are several other "measures," especially GNP and GNI, but these two indicators are rarely mentioned, even though they have different perspectives and approaches.
After 40 years of reform, Vietnam's economy has escaped poverty and reached middle income level, but the current growth trajectory of 6-7% is no longer sufficient to bring the country to the goal of becoming a developed nation by 2045. The aspiration for double-digit growth is both a historical imperative and a great political motivation to establish the country's position. However, if mechanical stimulus measures (money injection, cheap credit, widespread public investment) are used to force the growth rate, the economy will have to pay the price with inflation (possibly hyperinflation), asset bubbles and bad debts (possibly huge), clear manifestations of the "GDP illusion" [4].
To achieve sustainable breakthroughs without sacrificing quality, the economy needs a "three-legged stool" and a boost from the 3i model. In this model, the capital utilization coefficient (ICOR) must be optimized to 4 units of capital for 1% growth, keep interest rates and the real estate market stable, and ensure the four core security pillars of energy, food, supply chain and data network [3]. This "concern" is further demonstrated through two perspectives:
(i) Quantitative limitations: Based on macroeconomic data from 2010 - 2024, both VAR (Vector Autoregression) and DSGE (Dynamic Stochastic General Equilibrium) models show that achieving a 10% increase in 2026 is mathematically very difficult without a structural breakthrough [8].
Even in the most optimistic scenario of the Ramsey-based DSGE model (expanding workforce, strong increase in total investment), the growth rate in 2026 would only reach 9.47%. This slowdown is further exacerbated by the end of the cheap labor advantage and the end of the demographic dividend around 2039-2040, coupled with geopolitical shifts that make price fluctuations for many essential goods difficult to control.
Table 1. GDP growth forecast (%) for 2026 according to the DSGE model
(ii) Quality of growth (GDP vs. GNP/GNI): The GDP target is obscuring a rather concerning reality about the “real total revenue of Vietnamese people” (GNP) and the amount of money “actually flowing into Vietnamese people's pockets” (GNI). FDI holds 70% of export turnover, operating as “tenants” in Vietnam, where land and labor costs only account for 12-15% of total revenue, while we have to sacrifice the environment and resources. The fact that organizations such as the OECD (Organization for Economic Cooperation and Development) have not provided GDP forecasts for Vietnam in some recent reports is a signal of uncertainty in the current growth structure [9].
2. Lessons learned from several countries around the world
International experience shows that overcoming the middle-income trap depends heavily on innovation capacity, institutional quality, and technological mastery. Drawing lessons from South Korea, Taiwan, Thailand, and South Africa, the author divides these four countries into two groups: those that have successfully "taken off" (South Korea, Taiwan) and those that have stagnated and risk falling into the middle-income trap (Thailand, South Africa), in order to draw comparisons with the current situation in Vietnam.
Group 1: Represents economies that have overcome the trap and "taken off".
South Korea: Iron discipline, R&D, and leading conglomerates (Chaebol)
South Korea rose from the ashes of war, initially relying on low-cost outsourcing. However, the country quickly shifted to an industrialization strategy based on large private conglomerates (Chaebol), while simultaneously implementing a very strict conditional support mechanism. Specifically, the state intervened by selectively choosing outstanding private enterprises, channeling credit to them (forming Chaebols like Samsung and Hyundai) with ironclad discipline: they had to meet export targets and achieve technological self-sufficiency. Simultaneously, South Korea invested heavily in higher education; research and development (R&D); and gradually transitioned from assembly to high-tech manufacturing such as semiconductors, automobiles, shipbuilding, and cultural industries. From assembling televisions for others, the country has been able to manufacture its own chips, build ships, produce automobiles, and now exports its culture (K-pop, K-drama).
A key lesson from South Korea is the need to build leading domestic enterprises capable of global competitiveness and mastering core technologies, instead of relying solely on FDI enterprises.
Taiwan: The Power of Small Businesses and Core Technology
While South Korea relies on giant corporations, Taiwan relies on a highly flexible network of small and medium-sized enterprises (SMEs). The government establishes technology research institutes (such as ITRI - Industrial Technology Research Institute), uses state funds to research new technologies, and then "transfers" them free of charge or at low cost to private businesses.
Taiwan has chosen an extremely difficult niche and transformed itself into the world's "choke point": semiconductors. TSMC (Taiwan Semiconductor Manufacturing Company Limited) is the clearest example. The world cannot manufacture technology products without Taiwanese chips.
Taiwan's success illustrates that you should choose an irreplaceable link in the global supply chain and make it the best in the world, to understand why Taiwan focuses on R&D (design) instead of assembly at the bottom of the profit curve.
Group 2: Economies that are “stagnating” and caught in the “middle-income trap”.
Thailand: The outsourcing trap and "aging before getting rich"
Thailand was once dubbed the "Detroit of Asia" - a giant automobile manufacturing hub, however, it mainly played a role in assembling vehicles for foreign corporations (Toyota, Honda...).
Despite attracting significant FDI and creating numerous domestic jobs, Thailand has failed to force FDI companies to transfer technology and has also failed to build a competitive domestic industrial brand. As labor costs rise, FDI flows are gradually shifting to countries with lower costs (such as Vietnam). Meanwhile, an aging population and political instability are making it difficult for Thailand to maintain its growth momentum, and many long-term policies have been disrupted.
Thailand's failure shows that FDI is only truly meaningful when it creates endogenous technological capabilities and is closely linked with domestic businesses. If FDI is only used to boost GDP and solve short-term employment problems to maintain public stability without learning their technology, the country will be left behind when the advantage of cheap labor wears off.
South Africa: Inequality, Institutions, and the Resource Curse
South Africa possesses abundant resources and a relatively developed industrial base, but persistent social inequality and weak governance have hampered growth momentum (a legacy of apartheid). Wealth is concentrated in the hands of a small group, while the vast majority of the population lacks the skills and training to participate in the modern economy.
Poor governance has led to deteriorating infrastructure (severe and prolonged power shortages); high unemployment rates have resulted in persistent crime and social unrest, undermining growth momentum and making it difficult for the country to maintain its attractiveness to investors. This demonstrates that economic growth cannot be sustainable without a foundation of education, infrastructure, and social equity. The lesson learned is that growth without mass education, advanced higher education, and basic infrastructure development is "suicidal growth." An economy cannot take off if the majority of its population is left behind.
3. From international lessons to the need for innovative thinking in Vietnam's development.
The experience of Asian economies shows that overcoming the middle-income trap is never an easy path. South Korea and Taiwan succeeded because they did not accept a long-term position as cheap manufacturing partners, but instead proactively invested heavily in R&D, higher education, and core technologies. South Korea chose a strategy of developing leading industrial conglomerates while applying very strict discipline to enterprises receiving state support. Meanwhile, Taiwan built a flexible network of small and medium-sized enterprises (SMEs) linked to a strong system of technology research institutes with a strategy focused on the semiconductor industry.
    |
 |
| Vietnam is promoting the transformation of its agriculture from "green production" to "green value." |
Conversely, Thailand, despite once being considered a regional industrial manufacturing hub, has primarily focused on assembling products for foreign corporations. As labor costs rise, FDI flows shift to other countries, while domestic businesses lack the capacity to move up the value chain.
Lessons from international experiences relevant to Vietnam show that the country still relies heavily on FDI for high-tech exports. Domestic enterprises, especially small and medium-sized enterprises (SMEs), mainly participate in low value-added stages. Without improving endogenous capacity and mastering technology, the risk of being trapped in a processing-based growth model is very real. Vietnam today bears many resemblances to Thailand 20 years ago, with a large trade surplus, but the majority of export value and high technology (phones, electronics) is in the hands of FDI (Samsung, Intel...). Domestic enterprises mainly focus on processing, or private capital flows too heavily into real estate speculation instead of investment in production and R&D.
To avoid repeating Thailand's mistakes and move towards a model like South Korea and Taiwan, Vietnam needs to implement four core principles: (i) Abandon the short-sighted "red carpet" mentality for FDI: It's time to resolutely screen FDI. Only accept projects with commitments to R&D, technology transfer, and supply chain linkages with Vietnamese businesses. Absolutely do not sacrifice the environment and land for low-value processing projects; (ii) Discipline capital and nurture domestic "leading wolves": Credit capital and land resources must be directed towards manufacturing, technology, and high-tech agricultural businesses. Clear reward and punishment policies are needed to compel large Vietnamese businesses to expand internationally; (iii) Implement a revolution in STEM education and vocational training: We cannot develop chips, AI, or green energy if the vast majority of graduates work in simple service jobs. Therefore, we must invest vitally in the quality of technical education and practical engineering; (iv) Racing against time in demographics: Vietnam is aging its population at one of the fastest rates in the world. We only have about 10-15 years left of the "demographic dividend." If we do not increase labor productivity (through technology and management) during this time, we will certainly be stuck in the middle-income trap and forced to remain there permanently.
3.1. Anatomical Analysis of TFP Dynamics: The Disease of "Asset Speculation" Instead of "Productive Investment"
When the inputs of capital (K) and labor (L) are depleted, the almost sole decisive driver is total factor productivity (TFP), which is often expressed through the Cobb-Douglas production function. This is a widely used economic model to represent the relationship between inputs (capital K, labor L) and total output (Y), helping to measure productivity, economies of scale, and elasticity of output with respect to inputs.
The reality is that the technology absorption capacity of domestic enterprises is currently very weak [5]. The economy is "dualistic": FDI enterprises hold core technology and 70% of export turnover, while domestic enterprises (97% are SMEs) only pick up "fragments" of processing value at the bottom of the "smile curve" (The curve shows the level of value added at different stages in the value chain of a production industry). The reason lies in the resource allocation system:
* Annotate the axes of the chart:
Land rent profits overshadow R&D: The core reason is not only due to lack of capital, but also due to a distorted resource allocation system: The disease of asset speculation overshadows investment in production and R&D. Core technology research needs about 5-10 years to break even, but the risk is high, while the land management mechanism allows huge profits from land subdivision and sale in a short time. Social capital and intellectual elite automatically flow to where it is easiest to make money instead of investing in production to have products or R&D [14]. No country has achieved sustainable double-digit growth thanks to "land subdivision and sale".
Huge real estate bad debt: Real estate bad debt is warned to potentially reach trillions of dong [1]. If this huge capital were directed into R&D and production instead of enriching a group that "profits" from land rent differences, the economy would certainly have made qualitative leaps.
3.2. From “stable management” to “controlled breakthrough design”
To overcome this resistance, national governance thinking must change fundamentally [7]. An economy cannot break through if every component is designed to be "not allowed to make mistakes". A new strategic architecture with 3 core layers needs to be established:
Shifting from “absolute stability” to “dynamic stability”: Stability is not about eliminating volatility, but about the ability to absorb volatility to move forward. It is necessary to create special growth zones (e.g., Hanoi - Bac Ninh - Hai Phong, or Ho Chi Minh City - Dong Nai) with superior institutional frameworks that allow for the experimentation of tax policies, new financial models, and a high-level one-stop mechanism.
Conditional state leadership: Instead of a "request-and-grant" system or acting as a substitute for the market, the state focuses on paving the way for institutional reforms, investing in foundational infrastructure (logistics, energy, digital infrastructure), and guaranteeing initial risks for large projects.
Individual accountability discipline: Eliminate the "collective responsibility" mechanism. Each strategic project must be linked to an individual ultimately responsible, accompanied by clear KPIs and an independent oversight board. Success should be rewarded appropriately, failure and the risks of innovation should not be criminalized, but personal gain or group interests must be dealt with severely.
3.3. Institutional bottlenecks in science and gaps in university governance
For Total Factor Productivity (TFP) to achieve a breakthrough, science and technology and higher education must be direct productive forces. However, these two pillars are currently hampered by outdated management thinking.
The "paralysis" in R&D and the "request-and-grant" mechanism.
The state does not lack science and technology strategies, but the current financial mechanism applies a basic construction project management mindset to scientific research. The cumbersome, bureaucratic "request-and-grant" payment and settlement system has stifled the creative work of intellectuals in general, and scientists in particular, for a very long time, at least until the Law on Science and Technology and Innovation and the accompanying Government Decrees are enacted. Furthermore, the budget mechanism before October 14, 2025, did not accept the "right to risk" in scientific research, leading to a "fear of making mistakes" and "fear of responsibility," causing research projects to stop at the acceptance stage. Currently, the law allows for risk in scientific research, eliminating the need for a "Risk Exemption Act," and has shifted to a system of output-based pricing according to KPIs. This is a big step away from the "give and take" mechanism [10].
Although the new legal framework with the Law on Science, Technology & Innovation 2025, Government Decree No. 265/2025/ND-CP, and Decree No. 267/2025/ND-CP dated October 14, 2025, has significantly "unleashed" research and innovation, no longer viewed solely through the lens of state-funded infrastructure development, when compared to research financial management models in developed countries, our legal system in this important field still reveals the following paradoxes and bottlenecks:
(1) The paradox between “output contracting” and “input management”: We are stuck in the paradox of “contracting but not really contracting”: Although Decree No. 265/2025/ND-CP allows contract tasks up to the final product without detailed settlement, the regulations still require the lead organization to store legal records and documents to be ready for explanation. As a result, the set of documents is no different from the old partial contract tasks. In addition, the application conditions are very strict, making it almost impossible for any task to dare to apply contract to the final product.
(2) The bottleneck between the nature of research and administrative thinking: Scientific research requires flexibility and acceptance of risks and failures. Conversely, our financial system, whether intentionally or unintentionally, is trying to "program" creativity: The leading organization is forced to make clear commitments regarding the product and output quality. Although the 2025 Law adds the principle of risk acceptance, the bill-counting mindset still stifles the initiative of scientists.
(3) Technology Valuation & Spin-off Employer Bottleneck: In international universities, owning and selling IP to establish businesses is very easy. In Vietnam's system, technology valuation is a major bottleneck: No non-public valuation organization assesses the value of intellectual property. This leads to the consequence that higher education institutions are stuck, unable to contribute capital to establish spin-off businesses with their own research results. Although some pioneering higher education institutions have resolved the issue, scientists are still not truly reassured. In short, the biggest paradox is that laws with an open spirit of innovation are enacted, but regulations of the Accounting and Budget Law (closed) are used for management.
Reshaping university governance: Opportunities arising from structural change.
We must resolutely abandon the old "inertia" in training and scientific research, which is: (i) A preference for ostentation, formality, and valuing degrees and titles. We must build a culture that prioritizes substance and substance over form, being frank, insightful, and returning to the "practical learning and practical application" of Phan Chau Trinh from 100 years ago; (ii) Paying more attention to basic science, prioritizing applied research; increasing budget for high-quality higher education and vocational training linked to businesses; attracting and retaining talent; (iii) Merging single-discipline research institutes into universities. The official abolition of university councils places the university system at a historical crossroads; however, without a control mechanism, the system is very likely to fall back into bureaucratization and authoritarianism. Vietnamese universities need to boldly apply the principle of "Compliance or Accountability," granting genuine autonomy in finance, academics, and personnel, along with a set of output KPIs and an independent international accreditation criteria [12]. At the same time, this is the golden time to carry out a major overhaul: Merging specialized research institutes into key universities.
The merger of specialized research institutes into the ecosystem of major training centers will end the existing disconnect and create synergistic power: Research results will no longer remain on paper or confined within the institute, but will become "living textbooks" and practical spaces for students, trainees, and researchers. The "Institute within a University" model with a dual-title mechanism will transform scientific research institutes into R&D machines that generate wealth and resources for society. Only in this way can we strongly shift to a growth model based on innovation and technological development, especially core technologies.
3.4. Ecological Agriculture: From “Dead Capital” to “Green TFP”
The resource-intensive agricultural growth model has come to an end. The current imperative is green TFP - a circular, multi-value agricultural economy [2]. In addition, agriculture is no longer a purely stable growth sector, but must strongly transform from "green production" to "green value" to meet strict international standards such as ESG. The agricultural sector needs to eliminate the breaks in the supply chain to establish a comprehensive ecosystem and proactively manage market risk scenarios, thereby making a substantial contribution to the goal of macroeconomic growth [10]. However, the disconnect between practice and law is creating major barriers, especially for cooperatives and SMEs.
Table 2. Institutional barrier paradoxes to green TFP.
To unlock the source of "Green Credit", the State needs to urgently legalize the issuance of certificates of ownership of assets on agricultural land [12]. Along with that, establish a "three-legged stool" mechanism (Bank - Scientists - Cooperatives). In which, agricultural universities play the role of a third party to assess ecological feasibility, quantify environmental risks into financial language to guarantee loans.
4. Conclusion and action plan
Double-digit growth is not a slogan or a magical miracle, nor can it be achieved through shortcuts. The economy can only truly break through when science and technology are effectively utilized, the university system operates according to international standards, and barriers to private enterprise are removed.
Vietnam needs a radical overhaul to transform knowledge into a direct productive force, ushering in an era of prosperity not only in terms of GDP but also using GNP/GNI as a true measure of a nation's "health." The core issue is implementing comprehensive institutional reforms to turn knowledge and innovation into direct productive forces. The action roadmap can be implemented in three phases: From 2026-2028: Unlocking institutions, defining special growth zones, and finalizing a list of strategic projects; From 2028-2031: Accelerating investment in foundational infrastructure, attracting private sector, and promoting second-generation industrialization; From 2031-2035: Scaling up successful models, eliminating weaknesses, and shifting entirely to high-productivity-based growth.
Professor, Doctor, People's Teacher Tran Duc Vien
Vietnam Academy of Agriculture
References:
1. Investment Newspaper, March 2026. Trillions of dong are stuck; banks propose selling bad debts below cost.
2. Can Van Luc, January 2025. Expert offers suggestions for Vietnam to rise and achieve double-digit growth. An Giang Newspaper/Government Electronic Information Portal.
3. Can Van Luc, March 2026. Paper: Double-digit growth without sacrificing quality, Vietnam needs a "three-legged stool" and the impetus from the 3i model. Proceedings of the Workshop "Driving Forces for Double-Digit Economic Growth and Agricultural Prospects 2026", Vietnam Farmers' Association and Dan Viet Newspaper.
4. Nguyen Bich Lam, March 2026. Double-digit growth: The need for comprehensive economic restructuring. Government Electronic Information Portal.
5. Nguyen Duc Trung, January 2026. Paper presented at the Conference: Double-digit Growth: Critical Bottlenecks to Overcome. Dan Tri Newspaper.
6. Nguyen Si Dung, January 2026. Driving forces for a breakthrough economy and double-digit growth. People's Police Newspaper.
7. Nguyen Thai Hung, April 2026. A discussion on the national strategic plan to create a double-digit growth model for Vietnam. https://www.facebook.com/share/p/1DxQhJWA9s/?mibextid=wwXIfr
8. Nguyen Van Phu, To The Nguyen, January 2026. Forecast of Vietnam's economic growth in 2026, prospects for double-digit growth. Hanoi Security Newspaper.
9. OECD, March 2026. OECD Economic Outlook, Interim Report March 2026.
10. Tran Cong Thang, March 2026. Paper: Agriculture is no longer just a sector of stable growth, but must undergo a strong transformation to become a real driving force for double-digit growth targets. Proceedings of the Workshop “Driving Force for Double-Digit Economic Growth and Agricultural Prospects 2026”, Vietnam Farmers Association and Dan Viet Newspaper.
11. Tran Dinh Thien, January 2026. Reasons why continuous double-digit growth in the era of transformation is feasible. CafeF online newspaper.
12. Tran Duc Vien, March 2026. The shortcomings hindering Vietnamese higher education. Tia Sang Magazine, VnExpress special section.
13. VCCI, March 2026. Proposal: Improve institutions and laws to achieve double-digit growth targets. VnBusiness Magazine.
14. Vo Xuan Vinh, March 2025. To achieve double-digit growth, barriers to attracting investment resources need to be removed. Dong Nai Newspaper.
Source: https://vnua.edu.vn/tin-tuc-su-kien/tin-hoat-dong-khac/khat-vong-tang-truong-2-con-so-tu-bai-hoc-quoc-te-den-yeu-cau-doi-moi-tu-duy-phat-trien-cua-viet-nam-58666