The Ministry of Science and Technology will encourage businesses to foster innovation through research. The scheme is part of a project costing US$110 million to boost the country's creative industries.

The project, to be carried out over five years from 2014, will focus on dynamically and independently reforming the science and technology system.

It will also promote technological innovation in businesses and help create science and technology enterprises.

At a workshop held to launch the project late last year, Minister of Science and Technology Nguyen Quan said many countries had shown that investment in education, science and technology would foster innovation and create incentives for national development.

He said that to renew growth there was no alternative to renovation mostly based on science and technology and high-quality human resources.

In another move, a fund worth more than VND2 trillion ($94 million) has been set up to support innovations by business people and enterprises.

Additionally, Viet Nam is helping science and technology businesses by offering tax reductions and exemptions. For example, if they are making a profit, they are free from paying tax for the first four years. This will be modified to 50 per cent tax for the following nine years.

Enterprises that successfully apply science and technology achievements not only get preferential corporate tax but can also benefit from other preferential policies, said Minister Quan on the VTV programme People Ask, Ministers Answer last Saturday.

For example, businesses renting land cheaply, can get better access to sources of finance.

Quan said the State had also invested in building hi-tech zones, not only to house businesses but also research institutes and universities.

However, he added that the State invested in all businesses operating in the field of science and technology. Many countries had paid great attention to developing creative Industries that contributed up to 15 per cent of GDP.

Quan said the Government attached great importance to developing creative industries. In 2007, Viet Nam issued Decree 80 on science and technology. This was considered the cornerstone for the creative industries.

He said that in the past eight years, Viet Nam had established several science and technology businesses, including the Hai Phong Import and Export Company and the Ba Ria-Vung Tau Water Supply and Drainage Company. They had shown high sustainable growth despite the recent economic downturn.

Quan said Viet Nam had also increased international co-operation to support such businesses. "The World Bank has approved a $100 million project to encourage scientific innovations. Finland has pledged continued support for a similar project worth 10 million Euros. The Vietnamese Government sets aside a considerable part of its budget to support science and technology businesses," he said.

"We hope that there will be about 5,000 science and technology businesses by 2020 following a strategy on science and technology approved by the Prime Minister. These businesses are expected to contribute between 7-15 per cent of GDP," he added.