In recent decades Việt Nam has transformed into one of Asia’s most dynamic economies, fueled by bold reforms, a burgeoning private sector and rapid digital adoption.

In an interview with Việt Nam News, Don Lam, founding partner and CEO of VinaCapital, shares insights on Việt Nam’s economic evolution, the role of the private sector, and the opportunities that will shape the country’s future.

Having spent over 30 years in Việt Nam, how do you see the country’s economic transformation since you first returned? What sectors do you think Việt Nam should focus on to create greater added value, improve people’s livelihoods and promote economic growth?

Việt Nam’s economic transformation over the past 30 years has been nothing short of breathtaking. Back then who would have thought Việt Nam would become a global manufacturing hub or an emerging technology center in such a short amount of time? It was still a fairly poor country rebuilding from decades of conflict and with an economy that was still largely based on agriculture. But the seeds of future growth were already planted in the form of the Đổi mới (Renewal) policies.

Over the past 25 years Việt Nam has risen out of poverty into a middle-income country, an enormous achievement noted by the World Bank. Việt Nam's GDP has grown at an average annual rate of about 6.25 per cent and in double-digit rates. Today, it is one of the fastest-growing economies in Asia with strong manufacturing, services and technology sectors driving its success.

All of this occurred thanks to the Government’s steadfast commitment to implementing economic reforms to improve the lives of the Vietnamese people.

That commitment continues to this day – there is always more work to be done to achieve the goal of becoming a high-income country in the next 25 years.

To sustain its growth, Việt Nam needs to move up the value chain from basic assembly to higher-value activities such as R&D and chip production and encourage local firms to develop domestic supply chains to reduce dependence on imported components.

With 70 per cent of the population under 35 and high internet penetration (80 per cent by 2024), there is huge potential for continued robust growth of Việt Nam’s digital economy.

Việt Nam’s energy demand is soaring with industrialization, and there is huge potential in solar and wind. It is already a regional leader in solar capacity but needs to invest more in sustainable energy.

Việt Nam is also a major agricultural exporter, but much of its output is in raw form. It needs to invest more in food processing, branding and technology to increase value-added exports and promote sustainable practices to meet global demand for green products.

Finally, as a major player in global trade, Việt Nam needs better logistics infrastructure, including smart ports, AI-driven supply chain solutions, and e-commerce fulfilment services.

By focusing on high-tech, sustainable agriculture, digital services, renewables, and other promising sectors, Việt Nam can create greater economic value, improve living standards, and solidify its position as a key player in the global economy.

The Government has been piloting special mechanisms and policies to achieve breakthroughs in science and technology, innovation and digital transformation. How effective do you believe they will be? 

These special mechanisms, such as those outlined in Resolution No. 57-NQ/TW and other policies, reflect a bold, forward-thinking approach to trying out new technologies that could help propel Việt Nam toward its vision of becoming a more prosperous nation. First is innovation and R&D. Through preferential policies, Việt Nam is fostering a stronger eco-system for innovation, helping its enterprises develop cutting-edge technologies and compete globally.

Second is human resources. Focused initiatives for STEM education, vocational training and upskilling the workforce prepare Việt Nam’s labour market for the demands of a digital economy and enhance domestic innovation, reducing reliance on imported technology and expertise.

Việt Nam aims to grow its digital economy to 30 per cent of GDP by 2030. These pilot policies can drive productivity and economic diversification and ultimately move the country beyond its traditional reliance on manufacturing and exports.

As vice chairman of the IV Board (the private sector development research board), how do you see the role of the domestic private sector in Việt Nam's economy? Why do you think it struggles to expand as quickly as State-owned and foreign companies? 

One of Việt Nam’s greatest attributes is its people’s entrepreneurialism. It is little surprise that it is the private sector that is driving Việt Nam’s economic growth – it currently contributes 51 per cent of GDP and more than 30 per cent of State revenues, provides more than 40 million jobs or 82 per cent of the total workforce, and contributes nearly 60 per cent of social investment.

The Government clearly understands the importance of further developing the private sector. This vision positions private enterprises as a lever for economic transformation and global competitiveness.

To fully realise the private sector’s full potential means continuing to address the numerous barriers that hold them back. The major challenges to be addressed are access to financing via banks and capital markets, ease of doing business, bureaucratic requirements, and lack of information on how to enter larger markets.

Việt Nam already has some large and successful private sector companies that have done well at home, but the prospect of expanding to other markets is daunting given the fierce competition they face from foreign companies with advantages in capital, technology and branding.

At home and abroad, Vietnamese companies are dealing with human resources of uneven quality, a relatively shallow pool of management talent and lower innovation qualities compared to global enterprises.

In summary, I am very optimistic about the prospects for the private sector in Việt Nam. It complements SOEs and foreign-owned companies, and I truly believe it can compete with the latter in many areas once it is fully developed.

Investment funds like VinaCapital play a crucial role in providing domestic companies with capital to invest in technology, expand production and generally grow alongside Việt Nam. Can you tell us about some of your company’s prominent investments and its upcoming plans?

For more than 20 years I am proud that VinaCapital has been a leader in foreign portfolio investment in Việt Nam. Our funds provide capital to Vietnamese companies to help them grow. These investments have been instrumental for several success stories such as Hòa Phát Group, where our capital enabled them to purchase state-of-the-art technology and eventually become Việt Nam’s top steelmaker, and Kido, which has expanded and become a leading company in the consumer discretionary sector, competing head-to-head with foreign companies and winning.

Beyond providing capital, we help management develop transparent governance processes, implement financial controls, and help them understand the value of adopting environmental, social, and governance (ESG) standards. These are crucial to attracting major investors, building a strong brand and ensuring long-term competitiveness.

By investing in and nurturing homegrown champions, VinaCapital is playing an active role in supporting the Government’s ambition to elevate Việt Nam’s private sector onto the international stage, attracting further investment and enhancing economic resilience.

We continue to look for and evaluate investment opportunities that align with Việt Nam's sustainable development goals, particularly those related to technology, logistics, clean energy, and infrastructure. These are critical sectors that will propel Việt Nam’s economic growth in the decades ahead and where domestic companies can and should be the leaders.

VinaCapital has been a longtime investor in technology. As Việt Nam’s digital transformation accelerates, how are your priorities shifting to align with the Government’s vision? 

We have been investing in technology almost since we started, long before anyone thought of the term “digital economy”. Later this year, we expect to launch our third technology investment platform, VCVCF III, which will provide growth capital to companies providing solutions in sectors including agriculture, financial technology, logistics, digital media, retail, healthcare, renewable energy, and blockchain.

This fund represents just one part of our forward-looking vision to invest in and support the growth of Việt Nam’s digital economy. It also includes participating in developing the foundational elements of a thriving digital ecosystem, including data centres, artificial intelligence, semiconductors, and blockchain.

The development of a comprehensive digital eco-system and economy is a critical element in Việt Nam’s strategy to evolve beyond middle income status. VinaCapital believes in the transformative power of technology to drive economic growth and social progress, and we will continue to do all we can to contribute to that. — VNS