Summary of economic doctoral thesis promotion policies for enterprises to invest in science and technology of some countries and the lessons for vietnam

VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES DO THANH LONG PROMOTION POLICIES FOR ENTERPRISES TO INVEST IN SCIENCE AND TECHNOLOGY OF SOME COUNTRIES AND THE LESSONS FOR VIETNAM Major: International economics Code: 9.31.01.06 SUMMARY OF ECONOMIC DOCTORAL THESIS HANOI - 2020 The work is completed at: VIETNAM GRADUATE ACADEMY OF SOCIAL SCIENCES ACADEMIC SUPERVISORS: Prof., Dr Nguyen Quang Thuan Assoc Prof., Dr Dang Thi Phuong Hoa 1st defence: Assoc Prof., Dr Bui Tat Thang 2nd defence: Assoc Prof., Dr Doan Ke Bon 3rd defence: Assoc Prof., Dr Nguyen Xuan Trung The thesis will be defended in front of the Academy-level Thesis Assessment Council at……………………………………………… Thesis can be found at: National Library of Vietnam Library of the Academy of Social Sciences INTRODUCTION Rationale During the courses of the nation’s construction and development , our Party has soon identified science and technology as the top national policy, the foundation and driving force of industrialization and modernization of the country Over 30 years of innovation, our country’s science and technology has made a great advancement in building and developing potentials and has gained many important achievements, making practical contributions to socio-economic development, ensuring national defense and security, improving social security and quality of life, bringing our country from an underdeveloped country to the group of middle income countries However, compared to the set objectives and missions, our country's science and technology development has not been commensurate with its potential and position, has not really become a strong driving force for socio-economic development and for avoiding lagging behind other countries in the region and the world International experience shows that the more developed a country in terms of science and technology background, the higher the proportion of investment in science and technology of the non-state sector compared to the state budget The state budget only funds basic research and the research that serves the common national interests [185] In developed countries such as Europe, South Korea, and Japan, this ratio usually ranges from 3: to 5: China has a 3: ratio and tends to increase over time In Vietnam so far, the state budget is still the main resource, accounting for 52% of total social investment in science and technology [3] It should be recognized that no matter how much the State is interested, the State's resources are also very limited in the current situation with many difficulties, which cannot be compared with the abundant potential of the non-sate sector, especially of the business sector However, in fact, Vietnamese enterprises have not invested properly in science and technology activities because of the lack of appropriate incentive policies and experience in building development models of the science and technology system Some countries with similar characteristics to Vietnam, despite not starting from a high point, have succeeded thanks to proper investment policies for science and technology such as South Korea, China and Israel From the above analysis, the author chose the title: “Promotion policies for enterprises to invest in science and technology of some countries and the lessons for Vietnam” to be the research topic of this thesis Research purposes and tasks - Research purposes: Based on the theoretical research on the impact of the Government’s promotion policies on science and technology activities and the practical effect of some countries in the world and in Vietnam, the thesis draws lessons and proposes some solutions to develop promotion policies for enterprises to invest in science and technology for Vietnam - Specific research tasks: (i) Providing an overview of research on policies to promote enterprises to invest in science and technology; (ii) Explaining the role of science and technology, enterprises investing in science and technology, and the policies to promote enterprises to invest in science and technology From there, building an analytical framework for the thesis on the policies to promote enterprises to invest in science and technology; (iii) Analyzing the case studies of China, South Korea and Israel on the policies to promote enterprises to invest in science and technology; (iv) Understanding the current status of the policies to promote enterprises to invest in science and technology in Vietnam Comparing Vietnam and the studied countries to draw lessons that are relevant to the development trend, conditions and the practical situation of Vietnam in the policies to promote enterprises to invest in science and technology Research object and scope  Research object The research object of the thesis is the policies to promote enterprises to invest in science and technology in China, South Korea, Israel and Vietnam  Research scope - Scope of content: The thesis studies the Government policies of China, South Korea, Israel and Vietnam in promoting enterprises to invest in science and technology Policies can be found in law and sub-law documents of each country; The law and sub-law documents about other promotionpolicies (such as the laws / policies on land, security, defense, ) not fall within the scope of the thesis research; Policies to promote enterprises’ other activities (such as enhancing competitiveness, management capacity, financial capacity, ) not fall within the scope of the thesis research - Scope of space: The thesis focuses on researching experiences on policies to promote enterprises to invest in science and technology in China, South Korea and Israel because these are three typical countries in achieving breakthrough development in science and technology via the promotion of investment in science and technology In some analysis, the thesis uses secondary data of some other countries to get an overview of the research problem - Scope of time: For the reference countries, the scope of research spreads along each country’s rapid development period of science and technology For Vietnam, research data collected are in the period of 2018-2019 - Research sample: Survey samples are enterprises that invest in science and technology (science and technology enterprises, technology start-ups, ) These are enterprises that have the interest in and the need for technological innovation, have invested in science and technology activities and best understand the implementation difficulties and issues to seek for the State's support through policies The total number of enterprises whose data are used in the situational analysis is 103 enterprises Two of these will be studied in the form of case study Research process In order to accomplish the research purposes and tasks of the thesis, the PhD student uses the following research process Vietnam EXPERIENCE LESSONS AFFILIATE POLICY Israel DEMAND-SIDE POLICY South Korea SUPPLY-SIDE POLICY China SUPPORTING FACTORS POLICY POLICY SYSTEM to promote businesses to invest in science and technology Lessons for Vietnam to promote enterprises to invest in science and technology Evaluate the status of the policy system to promote enterprises to invest in science and technology Interview: policy makers, researchers, officers/directors of enterprises with activities related to science and technology Surveyed by questionnaires to 120 enterprises investing in science and technology Research methodology (1) Methods of data collection * Secondary data collection: The PhD student studies the thesis topic with the study of secondary data sources from reputable domestic and foreign publications such as articles with ISI, Scopus index; Seminars, doctoral dissertations; Reports, data of the Government and relevant ministries… as well as websites of reputable newspapers, magazines and organizations  Primary data collection a In-depth interview method b Questionnaire method Pilot survey c Case study (2) Methods of data analysis New contributions of the thesis Contributing to systematizing a number of theoretical issues about policies to promote enterprises to invest in science and technology with an analytical framework consisting of four groups: supply-side policy group, demand-side policy group, supporting factors policy group, affiliate policy group with the parties in the national innovation system Identifying the science and technology product supply chain model in the direction of approaching the enterprises’ science and technology start-up projects The supply chain will start from the idea of innovation, go through different stages to the final output when the product is commercialized in the market Types of enterprises with different levels of investment in science and technology will give different results Comparing Vietnam and the three selected researched countries Evaluating the successes and limitations of each country's policy and from there, drawing lessons for Vietnam in building policies to promote enterprises to invest in science and technology The structure of the thesis In addition to the introduction, conclusion, references, appendices; the main content of the thesis is divided into four chapters: - Chapter 1: Overview of the research on policies to promote enterprises to invest in science and technology - Chapter 2: Theoretical foundations of the policies to promote businesses to invest in science and technology - Chapter 3: Policies to promote enterprises to invest in science and technology of China, Korea and Israel - Chapter 4: Policies to promote enterprises to invest in science and technology of Vietnam and lessons learned from countries around the world Chapter OVERVIEW OF RESEARCH ON POLICIES TO PROMOTE ENTERPRISES TO INVEST IN SCIENCE AND TECHNOLOGY 1.1 Factors affecting investment decisions for science and technology Factors influencing an enterprise's science and technology investment decisions and its effects have been identified in many studies, both in theory and in experiment In a recent study, author Becker (2013) has synthesized and analyzed these studies to draw a picture of our understanding of this problem and challenges for future studies According to Becker, there are groups of factors that affect the level of enterprises’ investment in science and technology , including: (i) Characteristics of each business and industry (ii) Competitiveness (iii) Support policies from the government (iv) Location and opportunities to access knowledge resources (v) Spread of knowledge from foreign R&D activities Author Quan Minh Nhut has articles analyzing the current situation and factors affecting the level of science and technology investment in production and business activities of enterprises in Can Tho city in the field of commerce - services (2014) and agriculture(2015) Enterprise survey results show that the proportion of investment in science and technology in the total enterprise’s capital is still relatively low and ineffective According to the author, there are four statistically significant factors affecting investment decisions in science and technology of agriculture enterprises: Equity, efficiency of machinery and equipment, labor and the number of years of operation of the business [36]; and for commerce-service enterprises, there are three impact factors: profit, equity and the number of years of operation of the business [37] Some other domestic research projects also have contents of assessing the technology status of Vietnamese enterprises, including technological level, export ability and competitiveness of industrial enterprises, science and technology staff of industrial enterprises with the content of scale structure by qualifications and distribution by field of science and technology activity of this force, the situation of scientific research and science and technology innovation of industrial enterprises, the relationship between science and technology research and production and business factors 1.2 Policies to promote enterprises to invest in science and technology: Further research into the policies of promoting enterprises to invest in R&D the presence of policy groups including direct financial support, tax incentives, science and technology human resource development, investment in science and technology infrastructure development, affiliate policy with the parties in the national innovation system  Direct financial support In order to solve the financial problem of business innovation projects, many countries have spent a large amount of public funds to minimize debt and capital difference for innovation projects of small businesses A series of policies such as loans, loan guarantees and research grants have been implemented ([175], [93]) Government budgets need to create spillover effects to increase the opportunities to attract foreign investment and to increase budget equity Feldman and Kelley (2006) also confirm that the subsidies received in R&D activities will boost budgets from other sources  Tax incentives According to Hall and Van Reenen (2000), the tax incentive policy for R&D activities is the portion of tax that businesses can claim to be reduced if they participate in R&D activities, thereby promoting enterprises to invest in this field Tax incentives often affect all businesses in the economy, so private businesses need to evaluate to choose and determine the type of project they want to register  Science and technology human resource development Romer (1990) proposed a model in which growth is based on research and development results, reflected in the technological changes companies use to maximize profits In Romer's model, there are four basic factors of production: physical capital, labor, human resources and technology This model, or as described by Valdes (1999) later, growth is more pronounced with a large proportion of human resources in the R&D field  Affiliate parties policy in the innovation system Kamien (1992)] argues that besides the ability to accessknowledge sources, businesses also benefit from joint research activities with universities Mutual compensation of research capacity helps businesses overcome cost and time barriers in developing new technologies and products, while universities can benefit from technology commercialization Therefore, countries that want to develop R&D all aim to improve the research capacity of the universities and research institutes system and promote the linkage between these research centers and the R&D activities of the enterprise sector 1.3 Research gap for the thesis The domestic and international researches on policies to promote enterprises to invest in science and technology in this Chapter bring good reference value for the thesis, especially in shaping the group of policies to promote enterprises to invest in science and technology that Vietnam can apply to its construction and implementation activities Theoretical studies on basic issues in science, technology, R&D, and innovation are also a good basis for the thesis when it oriented to the supply chain of science and technology products Summary of chapter Overview of some researches on policies to promote enterprises to invest in scientific research and technology development in some countries around the world such as the US, South America, Japan, China, South Korea, Israel,… as well as Vietnam Studies show different perspectives on policies that affect investment in science and technology in the enterprise sector The gap of the study is identified as a synthesis view of policies to promote enterprises to invest in science and technology, not just focusing on one or a few specific policies The thesis studies the policies according to the model of the supply chain of science and technology products starting from the idea of innovation, going through different stages to the final output which is the commercialized product on the market; These policies are divided into groups The evaluation of the effectiveness of the construction and implementation of the policies to promote enterprises to invest in science and technology is based on two perspectives, one of the policy makers and the other of enterprises From there, the thesis will focus on the ineffective policies at each stage, combining with lessons learned from studied countries to make policy proposals suitable for the conditions and practice of Vietnam Chapter THEORETICAL FOUNDATIONS OF THE POLICIES TO PROMOTE ENTERPRISES TO INVEST IN SCIENCE AND TECHNOLOGY 2.1 The role of science and technology in economic growth There are many empirical studies conducted to calculate the impact of R&D on growth at all three levels: enterprise, industry, and country / region At the enterprise level, the rate of return can be measured through the impact of investments in R&D activities for the productivity growth of the company itself As calculated by Griliches (1992), by using the data at the enterprise level in the US, the elasticity of output is defined by the percentage difference of output divided by the percent difference of input This is estimated to be about 0.07 That means for every 10% increase in costs for R&D, output will increase by 0.7% In other words, the rate of return for the enterprises’ R&D activities is about 27% [101] 2.2 The role of investment from the enterprise sector for science and technology Enterprises investing in science and technology are understood as the process in which enterprises use financial resources, physical resources, labor and intellectual resources to conduct science and technology activities to create new products and new technologies or new processes that contribute to increasing labor productivity, bringing profits to businesses and developing the country's economy Investing in the research of the application of new science and technology is a strategy that has helped many businesses create breakthrough in technology, products, branding, production processes, strengthening competitiveness and promoting growth Thanks to the researches on the role of R&D investment in the enterprise sector, there are more and more developed, developing and middle-income countries, or low-income countries are focusing on R&D 2.3 Factors affecting enterprise’s investment in science and technology activities According to Becker (2013), there are groups of factors that affect the level of investment in R&D of enterprises The factors will be analyzed in detail as follows: 2.3.1 Characteristics of each enterprise and industry 2.3.2 Competitiveness 2.3.3 Support policies from the government The current science and technology policy is also called the innovative science and technology policy [75] People often use the term innovative science and technology policy as a kind of policy, but it can also be seen as three different types of policy "ideas" science policy, technology policy and innovation policy [142] 2.3.4 Location and opportunity to access knowledge resources An important factor affecting R&D activities of an enterprise is the geographical distance between it and the sources of knowledge Nobel Prize-winning economist Paul Krugman laid the foundation for the theory of the role of geography in innovation when arguing that countries could endogenously develop into industrial core zones and agricultural peripheries 2.3.5 Spreading knowledge from foreign R&D activities The eclectic theory of multinational enterprises suggests that FDI firms are more technologically advanced than domestic firms and can transfer technology for in the host country([89], [90], [67]) 2.4 Policies to promote enterprises to invest in science and technology Based on specific policies according to the concept stated by Steinmueller (2010), the PhD student built an analytical framework for the thesis as shown in Table 2.3 Supply-side policy Demand-side policy Support factors policy Affiliation policy - Direct funding for research (basic and applied); - Financing for development (of technology, prototype products) through tax incentives - Financing to bring products to the market (market research, experimental production, product launch); - Financing for technology transfer; - Developing high quality science and technology human resources; - Developing infrastructure for science and technology - Affiliate parties in the national innovation system Bảng 2.3 Framework for policy analysis of the thesis Source: Steinmueller (2010) and author (2019) 2.4.1 Supply-side policy Supply-side policies focus on financial support policies or direct funding for interprises to carry out R&D activities, and as a result, the MCC (marginal cost curve) shifts to the right, i.e., the enterprise’s investment costs will be reduced The implication of the supply-side policy is to create incentives for enterprises to expand production through tax exemptions and reductions, to increase investment in research and development thus improving production capacity, reducing costs and prices (1) Research funding (2) Funding for development (tax incentives) 2.4.2 Demand-side policy According to the science and technology product supply chain approach mentioned above, the demand-side policies are divided into three main categories: Financing policy to bring products to the market (market research, experimental production, product launch); Financing policy for technology transfer; Financing policy for product commercialization (new product development, product marketing) 2.4.3 Support factors policy (1) Policy on human resources for science and technology The Chinese Government considers science and technology development the main driver of sustainable development and hopes to spur an innovation-centered economy in the 2020s The orientation of the Chinese Government in enhancing the reform of the science and technology system is: Focusing on the efficient distribution of science and technology resources and comprehensive integration, creating a breakthrough in industrial innovation; Focusing on the enterprise system with the integration of industry, academia and research to strongly promote the comprehensive construction of …(?) and enhance the nation’s indigenous innovation capacity [180] 3.1.3 Policies used to promote enterprises to invest in science and technology 3.1.3.1 Supply-side policy “The National Strategy for Mid- and Long-term Science and Technology Development (2006 - 2020)” promotes enterprises to increase R&D spending and enhance their technological innovation capacity through a number of policies: Accelerating the imposition of consumption-based value-added taxes and make industrial payments for equipment purchases prioritized by the deductible valueadded tax; Implementing a series of tax holidays, increasing the level of incentive policies, including pre-tax deduction for the R&D costs of high-tech enterprises; Encouraging businesses to set up special funds for R&D activities; Allowing enterprises to accelerate depreciation of tools and equipment used in R&D activities; Issuing a holiday tax policy to purchase advanced scientific equipments [180] 3.1.3.2 Demand-side policy With the indigenous innovation strategy, the Government develops regulations to implement the Government Procurement Law to encourage and protect innovation of local peoples 3.1.3.3 Supporting factors policy i) Policy on science and technology human resources Higher education reform is emphasized, corrective measures have been taken to fulfill the ambitious task of regenerating the education system and developing appropriate human resources In addition, the "Made in China 2025" program [181] has established a multi-level talent training system ii) Policy on science and technology infrastructure China established infrastructure for science and technology through the following activities: Building technology zones, centralized science and technology centers; Establishing and perfecting the promotion mechanism related to intellectual property rights and the IPR transaction system; building a model to develop the science and technology market through the Science and Technology Service Centers under the Technology Market Association, the Shanghai Technology Exchange, the Guangdong Production Center; Paying attention to developing a system of intermediariesand brokers in order to create relationships and to connect supply with demand, etc 3.1.3.4 Affiliate parties policy in the national innovation system 11 In order to mobilize more resources, China has set a target to change not only in innovation factors such as research institutes or educational and training institutions but also to strengthen the innovation environment The construction of a unique Chinese national innovation system emphasizes the element of building a technology innovation system led by enterprises with the combination of enterprises, universities and research institutes, this is a breakthrough for the comprehensive building of national innovation 3.2 Experience from South Korea 3.2.1 National context South Korea achieved extraordinary economic development in the past half century, transforming from an agricultural economy to a technology-intensive economy Despite being a poor country in the 1960s, Korea quickly learned, adapted and created the advanced technologies necessary for the successful transformation of the economy [126] The gross national product per capita increased from less than $US 100 in 1960 to nearly $US 33,500 in 2018 [143] The main reasons for this rapid economic development are the government, institutions and private enterprises It is important that the government implemented a policy of technology import and funding for R&D groups in the early stages of economic development, thus paving the way for South Korea's robust industrial development later [126] Figure 3.3 Percentage of GDP for R&D in South Korea Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm (2019) 3.2.2 Government views on promoting businesses to invest in science and technology The South Korean government determines that the long-term goals of science and technology must be in line with national development goals National development goals are declared to be on par with developed countries, striving to rank 15th in the world in terms of gross national product (GNP) and ranked 10th in the world by trade volume [68] To compensate for the country's meager natural resources, the essential goal for science and technology is to become a space for innovation and creativity and to be in the top 10 of the world in the field of industrial technology 12 3.2.3 Policies used to promote businesses to invest in science and technology 3.2.3.1 Supply-side policy In order to reduce R&D costs for private enterprises, the government established a Reserve Fund for R&D in 1973 and began to exempt taxes and apply low rates when purchasing equipment for R&D activities since 1976 Various tax incentives began to be enforced in the 1980s, reflecting the South Korean government's efforts to transfer leadership in its technology development to private companies 3.2.3.2 Demand-side policy Korea's demand-side policy aims to increase the export of technology products In addition to technology trade, Korea's R&D policy orientation may be related to the export of technology-intensive products Korea's R&D policies have truly contributed to the development of Korea's technology-intensive industries since the mid-1980s 3.2.3.3 Supporting factors policy * Policy on science and technology human resources South Korea is one of the countries with the highest rates of population attending colleges [163] In addition, encouraging higher education, building human resources through vocational training programs are also part of the Government's efforts The Government established the Korean Advanced Institute of Science and Technology (KAIST) in 1971 with adequate financial support for the operating budget to train masters and PhDs in science and engineering [140] * Policy on science and technology infrastructure - Development of knowledge centers The Korean government also established the Korea Institute of Science and Technology (KIST), which was the first multidisciplinary research institute in Korea in 1966; established the Korea Advanced Research Institute for Science and Technology (KAIST) in 1971 and many other research institutes - Strengthening the intellectual property system to ensure competitiveness Korea attaches great importance to the development and improvement of its patent protection system The government wants to build a strong and effective patent protection system that is suitable for the systems in developed countries 3.2.3.4 Affiliate parties policty in the national innovation system - R&D cooperation policy - Promotion of the role of large corporations - Chaebols - Establishment of Innopolis 3.3 Experience from Israel 3.3.1 National context Israel is a small country in the Middle East with a population of about 9.2 million people (2020), and is the only country in the world where Jews make up the majority (about 73.9%) [124] In 1949, Israel became a member of the United Nations 13 The outstanding features of the Israeli research community that form the engine behind the country's R&D industry [153]:- Ranked # in the world in terms of number of researchers per million people (2018) - Ranked # in the world in terms of number of engineers per capita (2017) - Ranked # in the world in R&D spending as a percentage of GDP (2018) - Ranked second in the world in venture capital capacity (2018) - Ranked third in the world in terms of innovation (2017) - Ranked third in the world for the quality of scientific research institutes (2017) - Ranked third in the world for enterprise’s spending on R&D (2018) Figure 3.4 Percentage of GDP for R&D in Israel Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm (2019) 3.3.2 Government views on promoting enterprises to invest in science and technology The goal of Israeli goverment is to position Israel at the core of the knowledge economy [79] The government's vision is to increase a large number of enterprises in all sectors of the economy, to encourage R&D processes and to create technological value - First level of action: Innovate infrastructure - Second level of action: Invest in R&D - The third level of action: Capture economic value 3.3.3 Policies used to promote enterprises to invest in science and technology 3.3.3.1 Supply-side policy Israel also has long-term policies to promote the development of industries in suburban areas Accordingly, for the least developed regions, the funding for supporting R&D activities will be increased by 10% This means projects serving daily life will be supported up to a maximum of 60% while projects serving defense will be supported up to 40% [149] - The program "Magnet" - Incubation program 3.3.3.2 Demand-side policy 14 In Israel, the MAGNETON Program supports the transfer of technology from academic institutes to industry This program is for Israeli industrial companies wishing to receive new technologies from academies and for approved academic research groups wishing to conduct new applied research in partnership with a related company Eligible participants will receive grants of up to 66% of the approved budget No royalty payments are required 3.3.3.3 Supporting factors policy * Policy on science and technology human resources To ensure high-quality human resources for R&D activities, since 1995, Israel has become the country with the largest investment in education among OECD countries, with 10.3of GDP invested in education * Policy on science and technology infrastructure The construction of policies to develop science and technology infrastructure, especially IT infrastructure for science and technology is most prominent in Israel Due to the fact that the national terrain does not allow the establishment of centralized technology zones, Israel focuses on developing IT as a science and technology infrastructure to serve the connection and sharing of knowledge 3.3.3.4 Affiliate parties policy in the national innovation system Israel has always been open to FDI and has succeeded in attracting investment in R&D and manufacturing from US-originated companies such as Intel and Motorola in the 1970s The government has also launched cooperation programs between major companies in the world and research units in Israel 3.4 Some general lessons drawn from the experiences of the countries From the above detailed analysis, a number of issues related to the policies to promote enterprises to invest in science and technology in the studied countries can be assessed (1) South Korea First, the Korean government has considered human resources an important factor in R&D This is consistent with the endogenous economic growth theory of Romer (1990), Grossman and Helpman (1991), Aghion and Howitt (1992) and other scientists, which say that the increase in the level of resources devoted to R&D will increase the growth rate of the economy Second, the Korean government not only educates young scientists and attracts scholars from abroad, but also establishes many research institutes in which scientists and engineers can research and practice current R&D policies Third, effective cooperation between the Government and the private sector is also very important In developed countries, in general, the private sector has a greater share of R&D spending Forth, financial benefits, such as tax incentives for R&D activities, are neccessary to motivate institutions and companies to take risks and invest in R&D Fifth, the construction of innovative cities provides another important lesson for developing countries 15 Last but not least, developing countries need to understand the changing comparative advantage and lead the attention of R&D policies to go one step ahead (2 ) China Through researching policies to promote enterprises to invest in science and technology in China, it can be seen that, slowly and systematically, this country has narrowed the scientific gap with developed countries Understanding the causes of the dynamic development of Chinese science and technology has shown that China want the development to lean towards and mobilizes adequate resources, continuously develops policies with feasible tools and strict enforcement with the will to accept failures and endeavor to correct them (3) Israel Israel experts said that Vietnam can completely become a developed country like what Israelis did Some things that Vietnam can learn from: - First, promoting education and focus on building universities, not on large-scale but advanced in terms of: material - technical conditions, content of training - research, and organization - administration - Second, there should be a strategy for government intervention, just like Israel has made a strategic investment in technology to create an advantage for the country - Third, wide spreading entrepreneurship - Forth, promoting trade with neighboring countries - Fifth, improving the quality and efficiency of foreign investment - Sixth, setting high standards, for example: increasing global competitiveness by three levels each year by enhancing world-class education and technology, improving infrastructure, attracting high quality FDI, creating favorable conditions for hi-tech enterprises - Lastly, taking advantage of the low cost of production in parallel with high-tech innovation Obviously, there are many factors for Vietnam to become a startup country like Israel Vietnamese people are smart, the Government is dynamic and always creates the best conditions for the development of the economy and enterprises Moreover, Vietnam is strongly integrating into the world economy, participating in a series of important FTAs, which will help more and more FDI flow into Vietnam This will soon make Vietnam a hot spot and startup hub for companies in the near future Summary of chapter Chapter examines policies to promote enterprises to invest in science and technology of China, South Korea and Israel All the three countries have built a consistent ideology with science and technology as the center, playing a decisive role for socio-economic development These countries have built an open, synchronous legal corridor ensuring intellectual property rights, ensuring interests and competitiveness for enterprises 16 From general studies in the world and researches on the successes of China, South Korea, and Israel, it is possible toconfirm some important points in the policies of these countries as good lessons for Vietnam (1) The particularly important role of investment resources from the private sector in the development of science and technology; (2) State policies have an important influence on attracting investment from the business sector for research and development activities; (3) High quality human resources is the key to success; (4) The issues of technology commercialization, innovation, IP rights, IT platforms need to be paid more attention, especially in the industrial revolution 4.0 A part of these results has been published in the works (1, 3, - List of works related to the thesis) Chapter POLICIES TO PROMOTE ENTERPRISES TO INVEST IN SCIENCE AND TECHNOLOGY OF VIETNAM AND THE LESSONS LEARNED 4.1 State views and goals to promote enterprises to invest in science and technology 4.1.1 Current state of science and technology policy and infrastructure * Science and technology policy and infrastructure According to the Business Registration Administration, by the end of 2019, there are 758,610 enterprises in operation, of which non-state enterprises accounted for 96.23% According the level of technology, in 2018 the number of high-tech enterprises increased from 5,182 enterprises in 2010 to 11,834 enterprises in 2018, but only accounted for 12.24% of the total number of enterprises operating in processing and producing industry [43] Characteristics of some R&D factors are as follows (a 2017 survey by the National Department of Science and Technology Information): - Vietnam has 172,683 people participating in R&D activities (Table 4.1) The number of researchers in higher education institutions decreased from 53.18% in 2011 to 47.26% in 2017; - Research staff with doctorate degrees increased by 4,373 in the period from 2011 to 2017; The proportion of researchers with postgraduate degrees in the total number of research staff has increased from 43.8% (in 2011) to 52.7% - In 2017, the whole country had 687 R&D organizations of different sizes, mainly of small-scale under 100 people - According to the geographical distribution, it can be seen that two-thirds of these organizations are concentrated in Hanoi and Ho Chi Minh City * Science and technology policy As a developing economy, Vietnam now has many mechanisms and policies to promote enterprises to invest in science and technology in order to boost socialization and to mobilize all resources, especially resources from the business 17 sector for investment in science and technology development according to the Science and Technology Development Strategy for the period 2011 - 2020 Investment in science and technology in recent years has marked a great change in the contribution of society, especially from the enterprise sector If in about 10 years ago, funding for science and technology activities was mainly based on the state budget (about 70-80% of total investment in science and technology), today, investment in science and technology from the state budget and from enterprises is relatively balanced with the respective rates of 52% and 48% (in 2018) [4] 4.1.2 Perspectives and goals With the view of business as the center of the national innovation system being set out uniformly in the political system, the review and consolidation of the effectiveness of the policy system to promote enterprise investment in science and technology is an extremely urgent task 4.2 Policies to promote enterprises to invest in science and technology in Vietnam 4.2.1 Supply-side policy (1) Direct sponsorship policy - National Foundation for Science and Technology Development (NAFOSTED) was established under Decree No 122/2003/ND-CP of the Government and officially came into operation in March 2008 The Fund operates for non-profit purposes and has the function of funding and lending to perform science and technology tasks proposed by organizations and individuals - The National Technology Innovation Fund is a State financial institution operating for non-profit purposes, with the function of providing concessional loans, loan interest support, guarantee for loans, capital support for organizations, individuals and enterprises to research, transfer, innovate and to perfect technology - Direct financial support through national science and technology programs: (2) Indirect sponsorship policy (tax incentives, rental exemption and reduction, credit incentives, etc.) To promote the private sector to invest in R&D activities, the state has used tax policies to pass provisions in the laws: Science and Technology Law 2013, Investment Law 2014, Law on High Technologies 2013, Law on Technology Transfer, Law on Corporate income tax, Law on import tax, export tax, Law on value added tax and related legal documents to support enterprises when investing in science and technology Specifically: - Incentives for corporate income tax: - Incentives for import tax: - Incentives for non-agricultural land use tax: - Incentives for value added tax: - Exemption for income tax: - Exemption for land rent, water surface rent, registration fee: - Science and technology development fund of the enterprise: 18 - Credit incentives for science and technology enterprises - Exemption of fees when using machinery and equipment at key national laboratories, technology incubators, business incubators, and state scientific and technological research facilities 4.2.2 Demand-side policy (1) Trade promotion: In 2010, the Prime Minister launched the National Trade Promotion Program (Decision No 72/2010 / QD-TTg) under which the National Trade Promotion Program is built with the aim of increasing trade promotion activities, developing export and domestic market; promoting trade in mountain, border and island areas; Supporting the planning and operation of commercial infrastructure; Contributing to the improvement of production and business capacity of the business community; Combining trade promotion, investment and tourism activities (2) Priority policies for commercialization of research results and products of science and technology enterprises: Decree No 13/2019 / ND-CP [21] stipulates that science and technology enterprises can: - Have priority when establishing IP rights, recognizing and registering for circulation of products formed from scientific and technological results to develop new products - Use Science and Technology Development Fund of the enterprise to commercialize science and technology results; Be prioritized to participate in projects supporting the commercialization of scientific and technological results and state intellectual property - Be prioritized to develope national technical standards for products formed from science and technology results of science and technology enterprises in case the product is on the product list of group when there is no relevant technical standard 4.2.3 Supporting factors Policy (1) Supporting the training of human resources for scientific research and technology development The policy on training science and technology human resources in Vietnam is not new, but there are still many difficulties and limitations such as: there is no connection in terms of demand between educational and training institutions and enterprises in the deployment of training science and technology human resources; science and technology enterprises, high-tech enterprises have not spent enough resources for training and improving human resources; The financial mechanism for the training of science and technology human resources, especially high-tech human resources, still has many shortcomings and has not yet met the infrastructure for effective training (2) Policies for developing science and technology infrastructure The Law on Science and Technology 2013 [40] stipulate contents to promote the application of scientific research and technological development, to promote creative activities, technical improvements, optimize production and 19 innovation such as investment regulations from the state budget for science and technology; regulations on investment of enterprises, organizations and individuals in science and technology through tax incentives, credit, and use of research equipment at state-equipped facilities; Building infrastructure for science and technology development, development of high technology, building and developing the science and technology market 4.2.4 Affiliate policy with the parties in the national innovation system Organizational policies are implemented by the Vietnamese Government through the tasks of a number of national science and technology programs towards strengthening linkages, mutual support, and value chain enhancement of national key products 4.3 Evaluate policies to promote enterprises to invest in science and technology in Vietnam 4.3.1 Compare Vietnam and thereference countries Chapter presents the context, viewpoints and policies for science and technology development, including policies to promote enterprises to invest in science and technology of China, South Korea and Israel All the three countries have some common characteristics as follows: They were all underdeveloped Asian countries until the 1960s of the 20th century China gained independence in 1949, Israel in 1948 and South Korea gained independence after the Korean War ended in 1953 All countries had poor infrastructure, stagnant economy, and difficult people's lives, young government, incomplete institutions, etc All three countries were at the beginning stage of the world’s innovation movement on the basis of the third industrial revolution (in the late 1970s) All the three countries achieved different degrees of economic breakthrough after 4-5 decades of conducting the country’s industrialization based on science and technology and all succeeded in terms of perfecting economic institutions, strengthening R&D (?) and improving the quality of human resources All three countries already have market economies with basic freedom conditions for national development, which is similar to Vietnam The above comparison results will be one of the bases for the PhD student to propose policies to promote enterprises to invest in R&D in Vietnam 4.3.2 Some reviews from the actual enterprises survey According to the data from the Ministry of Science and Technology, as of December 31, 2018, Vietnam had 3,590 organizations registering for science and technology activities, including 1,629 public organizations and 1,961 non-public organizations In addition, there are about 2,000 enterprises qualified to be science and technologyenterprises in the fields of: IT, software production, enterprises in high-tech zones, enterprises that own invention and useful solutions that have not yet registered to issue certificates of science and technology enterprises [4] With the number of enterprises growing strongly in both quantity and quality, the policies to 20 promote enterprises to invest in science and technology have become more meaningful than investing only money in scientific research (1) Results of Survey by questionnaire: The PhD student collected some information from enterprises through survey by questionnaires and received 103 answer sheets Enterprises are statistically described according to four characteristics and asked about the Government's promotion policies according to four levels (2) Results from case studies : Case studies were performed on two enterprises with two relatively different characteristics One is a large-scale state owned enterprise with high investment rate in science and technology The other is a successful start-up in 2019 4.3.3 Some achieved results By combining the results of analysis and evaluation from secondary data and primary data, it can be seen that some of the results achieved in the Government's policy of promoting enterprises to invest in science and technology are as follows: First, in terms of building policies to promote enterprises to invest in science and technology, Vietnam has relatively enough related policies Second, in terms of implementation, Vietnam’s policies to promote enterprises to invest in science and technology have created a relatively complete legal corridor in decentralizing management from central to local levels in order to formulate, promulgate, and organize the implementation and control of science and technology activities At the same time, there have been positive impacts on the commercialization of research results and technological innovation towards the application of advanced technologies in production 4.3.4 Some limitations and reasons Despite certain achievements in science and technology activities, these policies still have limitations that need to be fixed to encourage enterprises better: (1) Enterprises are not fully aware of the policy of research, technology application and development (2) The supply-side policy on funding, tax incentives, credit, and training has not created a strong motivation for innovation in businesses, the incentives are still low, and the procedures are still cumbersome; (3) The demand-side policy in the development of the science and technology market has not been as effective as expected, there is a lack ofreputable intermediaries, the supply of technology is limited, and technology innovation has not yet become an urgent need of enterprises; the technology level and capacity of enterprises are still low (4) The policy on management supporting factors lacks appropriate priority science and technology orientation and strong policies to make a breakthrough in the areas where Vietnam has advantages (5) Affiliate policy: The affiliate policy to put science and technology products into production is limited 21 4.4 Some lessons learned 4.4.1 Domestic and international context 4.4.2 Some lessons learned to promote enterprises to invest in science and technology Lessons learned for Vietnam in building and implementing policies to promote enterprises to invest in science and technology are drawn on the following foundations: (1) Overview of the researches related to the policies to promote enterprises to invest in science and technology at home and abroad; (2) Successful lessons on the policies to promote enterprises to invest in science and technology and innovation in three Asian countries: China, South Korea and Israel; (3) Current status of investment in science and technology of Vietnamese Government and enterprises in the current period through secondary data sources and actual survey results; (4) Global science and technology development trends and enterprises' investment trends for science and technology; (5) The trend of policies for science, technology and innovation in general, followed by the trend of funding policy for research, development and innovation in enterprises 4.4.2.1 Lessons on supply-side policy groups (1) Improving the efficiency of direct financial investment policies through National Funds and Programs (2) Perfecting the State's tax and financial policies (3) Improving policies to promote capital from enterprises to invest in science and technology (4) Selecting standard projects and providing multi-level and multi-modal funding 4.4.2.2 Lessons on demand-side policy groups (1) Investing in key industries associated with the industrial revolution 4.0 (2) Policy to order science and technology products (3) Investing in large enterprises in the industry or merging with and acquiring big FDI (4) Protecting IP rights and liberalization in international science and technology activities 4.4.2.3 Lessons on supporting factors policy groups (1) Policies to support training and development of human resources (2) Establishing of science and technology infrastructure 4.4.2.4 Lessons on affiliate policy with the parties in the national innovation system (1) Increasing awareness for individuals and businesses about science and technology, innovation and entrepreneurship 22 (2) Connecting database information infrastructure for businesses with communication methods on science and technology (3) Connecting the activities of all parties in the national innovation system CONCLUSION The research thesis on "Policies to promote enterprises to invest in science and technology of some countries and the lessons for Vietnam" is presented in three parts: Introduction, Content and Conclusion In addition to the standard parts of a thesis, the Content is divided into four chapters: Overview of the research on the policies to promote enterprises to invest in science and technology; Theoretical foundations of the policies to promote enterprises to invest in science and technology; Policies to promote enterprises to invest in science and technology of China, South Korea and Israel; Policies to promote enterprises to invest in science and technology of Vietnam and the lessons learned Research on the policies to promote enterprises to invest in science and technology in China, South Korea and Israel shows that these three countries have built a consistent ideology with science and technology being in the center, playing a decisive role for socio-economic development To accomplish this goal, governments have built an open, synchronous legal corridor, ensuring IP rights, ensuring the interests and competitiveness of businesses; promoting technology transfer, investment in technology development and commercialization, balancing the elements of the innovation system These efforts have positive effects on the R&D (?) investment of the enterprise sector, promoting creativity and sustainable economic growth in each country The actual state of investment activities in science and technology of Vietnamese enterprises in general and policies to promote this activity in particular still shows many limitations and shortcomings: The policies to promote and support the application of scientific and technological advances in production are not really oriented towards enterprises or not yet centered on enterprises; The policies on sponsorship, tax incentives, credit, and training have not created a strong motivation for innovative businesses, the incentives are low, the procedures are cumbersome; Technology innovation activities have not become an urgent need of enterprises, the technological level and capacity of enterprises are still poor; There’s a lack of appropriate priority orientation for science and technology as well as strong policies to make a breakthrough in the fields where Vietnam has advantages; There is poor connection between research and training, research and the market and between scientists and enterprises The transformation of science and technology organizations to autonomous and self-responsible mechanisms still faces many difficulties, leading to the low effectiveness of policies 23 The lessons learned are an important part of the thesis which shows summaries and draws lessons from policies of countries around the world, especially China, South Korea and Israel There are 12 lessons of experience divided into four groups of policies for Vietnam in the development and implementation of policies to promote enterprises to invest in science and technology These lessons show that a rigid policy should not be applied everytime, everywhere for all beneficiaries and at all stages of development The government must regularly evaluate and analyze the policy implementation process, clearly define the achievements and the limitations in order to adjust and perfect the policy to meet the practical conditions and development requirements The lessons learned are always for reference only Vietnam is having all the favorable factors to accelerate development with the driving force of science and technology innovation The issue is that there needs to be a political determination and a strong commitment from the top leaders of the country, the concensus of the entire political system, the people and enterprises Based on science and technology dynamics and innovation and creativity, our country will strive to become a developing country with high average income by 2030 and become a developed socialist-oriented country by 2045 24 LIST OF AUTHOR'S PUBLISHED WORKS Do Thanh Long (2018), Investment policy for R&D: experiences of some countries and the lessons for Vietnam, Journal of Economic Research, No (480), pp 33-45 Thanh Minh Nguyen, Tuyen Quang Tran, Long Thanh Do (2018), Government Support and Firm Profitability in Vietnam, Comparative Economic Research, Vol 21, Number 4, 2018, pp 85-100 Do Thanh Long (2020), Breakthrough policies of Israel in the development of innovation systems and technology, Journal of African & Middle East Studies, No 04 (176), pp 23-32 Do Thanh Long (2020), Development of the Korean system of scientific research and technological development, Journal of Economics and Forecasting, No (721), pp 77-79 ... enterprises to invest in science and technology; (iv) Understanding the current status of the policies to promote enterprises to invest in science and technology in Vietnam Comparing Vietnam and the. .. Some lessons learned to promote enterprises to invest in science and technology Lessons learned for Vietnam in building and implementing policies to promote enterprises to invest in science and. .. Israel; Policies to promote enterprises to invest in science and technology of Vietnam and the lessons learned Research on the policies to promote enterprises to invest in science and technology in