A worker at a wood furniture factory in the northern province of Bắc Giang. — VNA/VNS Photo

Limited resources and a lack of support policies have hindered businesses’ eco-innovation, the development of products and processes that contribute to sustainable development, according to economists and policymakers.

Nguyễn Thị Luyến, head of the economic institution research department at the Central Institute for Economic Management (CIEM), said eco-innovation and more efficient utilisation of resources in production have gained traction in recent years with many localities launching programmes and initiatives for green development models.

At the same time, the participation of numerous organisations, scientists and experts has been crucial in training and encouraging businesses to engage in eco-innovation practices.

CIEM, however, said such policies were still lacking as a consistent, synchronised and coordinated effort.

For instance, it’s unclear what criteria businesses must fulfil to qualify as eco-innovation businesses and what regulations they must follow. Training has mostly covered the theoretical part but is severely inadequate in providing businesses with technical know-how, financial support and supply-chain connections.

"The primary source of financing for innovation is mainly from the businesses' pocket, followed by loans. The number of businesses with access to the State’s financial support remained small,” she said.

Luyến added more policies were needed to involve the private sector, in particular commercial banks and investment funds. She said support must be given in consideration of business sizes and characteristics to encourage innovation and participation.

Mette Ekeroth, a representative of the Danish Embassy in Việt Nam, said Vietnamese SMEs often respond and adapt quickly to new challenges and requirements, not shying away from experiencing new business ideas and models.

She said eco-innovation has proven to be a challenge. However, it can also be an opportunity for pioneering businesses to enhance their competitive advantage, maximise resource-use effectiveness and reduce carbon emissions.

CIEM Deputy Director Nguyễn Hoa Cương said the State has steadily given more support to businesses, especially small and medium-sized enterprises (SMEs) in promoting and implementing eco-innovation, including both financial and non-financial incentives.

For example, there are incentives for eco-innovation for businesses under the Investment Law 2020, the Science and Technology Law 2013, and the Law on Efficient Use of Energy, including preferential regimes for corporate income tax, value-added tax, import-export taxes and land and water lease rates.

He said it’s time the Government implement dedicated support policies and set the criteria requirements as the foundation for the development of business eco-innovation. Meanwhile, the country should focus on completing the legal framework and support policy system for green innovation, including standards, technical regulations, tax policies, financial investment, market policies, consumption policies and policies on education, training, research and development. — VNS