Vietnam is characterised by a “socialist market” economy. Since the economic reform in 1986, the government has gradually opened the market to integrate into the global economy. Thanks to this
strategic shift, Vietnam has escaped from the second poorest country in the world and reached the middle
income status in 2010 defined by the World Bank. This country report frames its analysis adopting the
growth framework. It seeks to understand what constrains the aggregate growth. The analysis identifies
that low human capital is the most bind constraint. Specifically, there is a strong mismatch between the
demand and the supply of skilled labour force. This impedes enterprises to recruit and possess sufficiently
skilled workers to grow their businesses. Consequently, there is a growing need for policy intervention
that will increase the supply of skilled labourers in terms of quality and quantity. This report will
recommend three policy options prioritizing higher education and training. Firstly, it suggests the
increasing access to higher education and vocational training. Secondly, it aims to strengthen Technical
and Vocational Education Training (TVET) and improve the quality of tertiary education. Finally, it
recommends the government to play a crucial role in fostering coordination and connection between
employers and schools.