HANOI: Vietnam must overhaul its foreign direct investment (FDI) strategy to remain competitive as artificial intelligence (AI) reshapes global capital flows, an expert says.
Phan Huu Thang, former director of the Foreign Investment Agency (FIA), has warned that traditional advantages, such as low labour costs, are losing relevance in investment decisions.
He said artificial intelligence (AI) is fundamentally changing where and how capital is deployed, with leading technology firms now prioritising digital infrastructure, availability of AI talent and the maturity of local innovation ecosystems, over labour costs.
In an article published on vnbusiness.vn, he outlined three major global trends.
First, capital is shifting away from traditional manufacturing towards digital infrastructure, including data centres, cloud computing and AI platforms.
Second, demand for labour is moving from low-cost workers to highly skilled engineers, data scientists and AI researchers.
And third, investment decisions are increasingly based on the quality of ecosystems, rather than tax incentives, Thang wrote.
Despite this, Vietnam retains several advantages, including an established manufacturing base, a young, tech-savvy population and a favourable position in global supply chain diversification, he said.
However, the country is not yet fully prepared to attract large-scale AI-driven FDI, citing structural constraints such as underdeveloped AI infrastructure, a limited pool of high-level AI talent and a fragmented innovation ecosystem.
Vietnam must set three core requirements for AI-related FDI projects: substantive technology transfer, joint investment with Vietnamese firms and integration into the domestic innovation ecosystem, said Thang. — Viet Nam News/ANN
