New trend of FDI inflow

Monday, 2016-03-28 17:00:33
 Font Size:     |        Print

Inside a Samsung's design R&D centre (photo:
 Font Size:     |  

NDO - The increasing appearance of foreign direct investment (FDI) projects in research & development (R&D) will help Vietnam accelerate the transformation from a low value-added production economy to a high value-added one. 

According to the Hanoi municipal People's Committee, Samsung Electronics Vietnam will build a US$300-million R&D centre in Hoang Mai district. The project will replace Samsung’s existing R&D centre at PVI Tower in Cau Giay district as the workplace for more than 1,600 engineers and workers. The centre will become Samsung's largest R&D project in Southeast Asia.

Established in 2012, Samsung's R&D centre in Hanoi is now responsible for researching and developing the software market for mobile phones and tablet products in Southeast Asia, accounting for 10% of Samsung's global revenue in this field.

Vietnamese software engineers working for this R&D centre have contributed to designing and writing software for the digital writing device S-Pen Montblanc - a cross between Samsung technology and Montblanc's sophisticated expertise in writing devices.

With US$300 million invested in building a new R&D centre, Samsung Electronics has demonstrated that the group not only considers Vietnam as a place for mobile phone production and assembly, but also a place for research and development of software applications, a field requiring more brainpower and skilled labour. The project will also help increase the added value to made-in-Vietnam products in this field. Samsung plans to raise the number of Vietnamese workers in R&D from 1,600 to 1,800.

Samsung is not the only foreign group expanding its investment in R&D in Vietnam. Apple Inc, a rival of Samsung in the mobile phone and tablet market, is preparing to invest US$1 billion in building a data and R&D centre in Hanoi. The centre will serve Apple operations in Asia, but it is unclear where and when the project will start.

Chairman of the Vietnam Association of Foreign Invested Enterprises Nguyen Mai said that such moves are indicating a trend of investment into higher value added areas in Vietnam. High-quality FDI inflow has begun to pour into Vietnam, Mai noted.

In fact, a few years ago, foreign groups began to invest in R&D activities in Vietnam. Hewlett-Packard (HP), one of the world's leading computer manufacturers, invested in building a R&D centre at Quang Trung Software City in Ho Chi Minh City in 2012, HP's first R&D centre in the Southeast Asian region. Italian scooter manufacturer Piaggio also built a R&D centre beside its plant in Vinh Phuc province which serves Piaggio operations in Asia. Other multinational groups including Panasonic, Yamaha and General Electric also have their own R&D centres in Vietnam.

In the years following the implementation of Doi Moi, FDI inflow into Vietnam has mainly covered light industry using low technology including garments and textiles, footwear and real estate. With R&D projects, Vietnam has the opportunity to move to production with higher added value in addition to a quicker technology transfer process thanks to the increasing presence of Vietnamese workers in large corporations.

Head of the Project Management Office at Samsung's R&D centre in Hanoi Do Duc Dung said that he is proud to say that all Vietnamese workers at the centre are as qualified as any other workers in Samsung R&D centres globally. As proof, Samsung has assigned Vietnamese engineers to develop the S-Pen Montblanc project.

Robert Bosch Vietnam Director Vo Quang Hue also acknowledged that the standards of Vietnamese engineers have improved in the past years and they are qualified to take part in R&D projects by foreign companies.

Robert Bosch Vietnam is now running two R&D projects in Dong Nai province and Ho Chi Minh City, and it is likely to increase investment in these centres in the next few months to expand its research capacity, serving its operations in Asia, Hue added.