Vietnam attracted $34.65 billion in registered foreign direct investment (FDI) in the first half of 2026, marking a 61 percent increase over the same period in 2025. Realized FDI reached $13.03 billion, the highest first-half level in five years. Observers, including Harvard’s Growth Lab, have noted the country's increasingly diverse and sophisticated export base as a sign of strong long-run growth. However, as of January 3, 2018, scenes of people riding motorbikes in Hanoi reflected a landscape that has since undergone rapid industrialization. Despite this progress, the nation faces a challenge in meeting its ambition of reaching high-income status by 2045, as future growth requires sustained productivity rather than just moving workers from agriculture into factories.
A study drawing on 13 years of nationally representative Labor Force Survey data shows that for every 100 jobs created in foreign-invested firms, an additional 100 jobs emerge in the same district. While this one-to-one local employment multiplier is a significant spillover, the composition of these jobs is sobering. Of every 100 additional non-FDI jobs, roughly two-thirds are in services—such as restaurants, repair shops, and retail stalls—and only one-third are in manufacturing. Occupational data shows that for every 100 FDI jobs, only 13 to 15 high-skilled cognitive roles emerge, compared to 41 to 45 blue-collar production jobs and 27 to 31 clerical or service positions. This trend mirrors a workforce where lower-secondary education predominates, explaining why educational progress has not yet translated into strong economic returns.
By 2023, workers with tertiary qualifications accounted for about 18 percent of total employment, yet the economy struggles to utilize these skills. Manufacturing employed 25.4 percent of the workforce but only 16.5 percent of tertiary-educated workers, with only 11.5 percent of manufacturing workers holding a tertiary qualification. This creates a demand-side problem where continuing education becomes costly for poorer households. While the Grade 9 completion rate is over 90 percent, Grade 12 completion remains below 60 percent. Without more jobs that reward advanced skills, Vietnam risks a graduate mismatch where educated workers are pushed into low-productivity services or leave the country.
The government must broaden its definition of high-quality investment to include wage progression, firm-based training, and technical and managerial employment. Rather than risky quotas, Vietnam should lower the cost of sophisticated activities through reliable infrastructure, industry-linked training, and applied research support. Resolution 68, issued by the Politburo of the Communist Party of Vietnam in May 2025, identifies the private sector as a key driver, but success depends on domestic firms scaling operations. Education policy must also connect directly to labor demand through public-private training partnerships, apprenticeships, and jointly designed curricula that are evaluated by whether graduates move into jobs that deepen their skills. Furthermore, industrial and urban policy should combine infrastructure with universities, vocational colleges, and public amenities to attract sophisticated activities. Ultimately, Vietnam needs domestic firms capable of competing alongside foreign investors, and foreign investors whose success depends on Vietnamese skills.
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