Officials of HCM City's Department of Science and Technology said at a seminar on Tuesday that there were many deep-rooted problems that inhibit development of the domestic technology sector.

Department official Do Nam Trung said the sector was yet to make a "breakthrough" that could sustain its development in the years to come.

He noted that most science and technology products being sold in the domestic market had foreign origins.

A survey by the National Institute of Science and Technology Policy and Strategy Studies showed that domestic science research institutes could only meet between 30 and 40 per cent of the country's technology renovation demand, he said.

Local sci-tech products are typically not updated to latest technology standards and those that do are not marketed well.

In Ha Noi and HCM City, only 15 to 20 per cent of products created by local research establishments are commercialised. This percentage is much lower at other localities in the country.

Consequently, since 2000, Viet Nam has spent between US$2 billion to $3.5 billion each year on importing equipment and technology chains, which account for around 30 per cent of the country's total import value.

Equipment

As much as 65 per cent of the imported equipment and technology come from regional countries like Japan, Taiwan, Singapore, South Korea and China.

At present, 56 per cent of enterprises buy technology and equipment of foreign origin to renovate their production technology, while only 22 per cent use domestic sources, the survey found.

According a report by the Ministry of Industry and Trade, the textile and garment industry alone needs 45 per cent of its machinery and equipment

upgraded and 30 per cent needs to be replaced.

In the mechanical engineering industry, 90 per cent of the technology and equipment dates back to about 50 years ago.

Meanwhile, according to the Ministry of Science and Technology, just 10 per cent of equipment and production chains used by enterprises in the country are hi-tech, 38 per cent are at the medium level and the remaining are outdated.

A survey of 100 enterprises in the textile and garments and chemical industries conducted by the Central Economics Management Research Institute found 55 per cent of the enterprises wanting to upgrade their current production chains and 52 per cent willing to invest in new technology and equipment.

Despite the obvious potential for development, the domestic technology market has developed very slowly, Trung said.

Most of the domestic sci-tech products are often in "invisible form," so it is difficult for authorised agencies to accurately evaluate them and establish their price.

Science research institutes do not pay attention to converting their findings into technology products that can be commercialised.

Moreover, suppliers of domestic sci-tech products have poor knowledge of intellectual property rights so many of them are used freely.

Meanwhile, legal procedures needed for implementing intellectual property rights and technology transfers have not been completed, making it difficult to commercialise sci-tech products.

Renewal

Despite knowing the importance of sci-tech products, domestic companies dedicate little or no part of their financial plans for renewal and R&D (research and development) activities. One estimate puts it at an average of 0.3 to 0.5 per cent of a company's turnover.

To ensure sustainable development of the local technology market, all its aspects needed to be reformed, including financial mechanisms, socio-economic policies, science and technology policies, State management of science and technology studies and technology transfers, Trung said.

"However, the renewal must focus on ways that encourage enterprises'use of technology to create high valued-added products, and providing financial support at the outset of this process is important," he said.

Individuals, institutes, colleges, universities and enterprises should also be stimulated to strengthen their science and technology research capabilities and to co-operate with foreign partners to effect relevant and useful technology transfers.

An urgent task was to foster and strengthen links between businesses and scientific research institutions including universities so that their work was relevant to market needs, Trung said.

Setting up intermediate organisations that can connect sellers of sci-tech products with buyers would also boost development of the domestic technology market, which would serve the national cause of industrialisation and modernisation, he added.