Vietnam has grown at an average 6.2% per year since 2000, gaining fame worldwide as a go-to place for export manufacturing, largely because of cheap labor. The minimum wage in Hanoi and Ho Chi Minh City is just 3.9 million dong ($172) per month. But this advantage from one of the world’s fastest-growing economies looks like less of a good deal when you realize that 78% of the workforce has no academic qualification and just 9% have credentials from a university or higher. The lack of more skilled labor has become an increasingly obvious barrier to growth in value-added exports such as high-tech goods, which require advanced studies for mastery.


Without a fix Vietnam could lose ground to China as Asia’s economic darling. A similar number, 76%, of Chinese workers also have “no skill at all,” Beijing’s state-run China Daily news website says. More than 90% of Chinese companies are “affected by the shortage and low quality” of workers, it adds.

But the remaining 24% in China is backed by the sheer number of 830 million working-age adults. A lot have degrees from top Western universities. Some know enough to do a job briefly for someone else and learn how the technology works, then quit to start their own. Manufacturers also pick China for factories to be near its giant consumer market. Vietnam, with just 93 million people and a still-emerging middle class, isn’t there yet.


The government may begin to target certain industries for rigorous education drives, Mussons says. “Vietnam’s willingness to focus on strengthening the country’s competitiveness through education is going to be crucial in the next few years,” he says. “The Vietnamese government will have to pick industries that they think will be winners and to build up education programs around these sectors.”


Vietnam Is Losing Economic Ground To China Due To Lack Of High-Skilled Workers
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