Limited resources and policy gaps challenges eco-Innovation in Vietnam

Mette Ekeroth, a representative of the Danish Embassy in Vietnam, emphasized the importance of eco-innovation for Vietnamese small and medium enterprises (SMEs) at a recent economic forum. Ekeroth noted that while Vietnamese SMEs are quick to adapt to new business models, they face significant challenges in implementing eco-innovation due to limited resources and lack of supportive policies.

Economists and policymakers echoed Ekeroth’s concerns, highlighting that Vietnam’s progress in eco-innovation has been hampered by inconsistent policies and a lack of coordinated support. Nguyen Thi Luyen, head of the Economic Institution Research Department at the Central Institute for Economic Management (CIEM), pointed out that although there have been initiatives for green development, the criteria for what constitutes an eco-innovation business remain unclear. Moreover, businesses often lack access to the technical knowledge, financial support, and supply-chain connections needed to implement these practices effectively.

CIEM has called for more targeted support, particularly for SMEs, which make up a significant portion of Vietnam’s economy. The primary source of financing for innovation currently comes from businesses themselves, with limited access to government-backed loans or incentives. This gap underscores the need for more robust involvement from the private sector, including commercial banks and investment funds, to drive eco-innovation forward.

Ekeroth’s comments, along with input from local experts, highlight the urgent need for Vietnam to enhance its support mechanisms for eco-innovation. By doing so, the country can ensure that its businesses not only meet the challenges of sustainable development but also thrive in an increasingly competitive global market.