Small and medium-sized enterprises (SMEs) that engage in innovation, particularly product innovation, tend to achieve higher value-added output, stronger revenue growth, and greater profitability than firms that do not innovate. Despite these tangible benefits, recent surveys reveal a paradox: the proportion of SMEs undertaking innovation activities has been declining. A decline in product and technology innovation According to the Ministry of Science and Technology’s 2025 enterprise innovation survey, innovation activity among Vietnamese businesses showed signs of weakening in 2024, particularly among SMEs. The proportion of small enterprises engaging in innovation fell from 35.7% to 28.8%, while the rate among medium-sized enterprises declined from 41.2% to 36.2% between 2023 and 2024. Although the innovation rate among large enterprises increased significantly from 42.9% to 63.1%, large firms account for only a small share of the business population. As a result, the overall proportion of Vietnamese enterprises undertaking innovation activities declined slightly from 38.8% to 34.6% during the aforesaid period. Another enterprise survey conducted by the World Bank in 2023 found that Vietnamese firms lag considerably behind global averages in innovation performance. Only 6.6% of small enterprises introduced new products or services to the market, nearly three times lower than the average among […]
To read more, please click here.
