National foundation for science and technology development: When the State identifies science and technology as the spearhead of economic development

Focusing on implementing breakthroughs in science, technology, innovation and digital transformation, creating a foundation for the development of new and modern production forces is identified as one of the key tasks of the term of the XIV Congress[1]. With this orientation, the requirement to strongly innovate the mechanism of allocation, management and use of resources for science, technology and innovation is becoming more and more clear, in the direction of priority.

The Fund has the function of sponsoring and ordering the implementation of science, technology and innovation programs and tasks; to support the improvement of national scientific and technological capacity.

The Draft Decree regulating the organization and operation of The National foundation for science and technology development (Draft Decree) is being consulted and promulgated in order to fully institutionalize the Party's guidelines and policies and establish a full legal corridor.  in sync with the provisions of the Law on Science, Technology and Innovation 2025[2] of Vietnam.

Operational practice shows that the current legal framework for this activity still has some limitations such as (i) lack of clear legal basis for organizational model, delineation of responsibilities in the executive apparatus; (ii) many new tasks have been assigned but have not yet been formally regulated; (iii)  the current financial mechanism is not suitable for the characteristics of the Fund as a financial intermediary organization, not providing public non-business services with revenue, leading to limitations on autonomy, human resources and operating efficiency.

Decree No. 265/2025/ND-CP guiding the implementation of the Law on Science, Technology and Innovation 2025 stipulates the financial mechanism framework applicable to The National foundation for science and technology development (the Fund). However, this Decree has not specifically and fully stipulated the organizational model, apparatus and operation mechanism of the Fund, leading to the lack of synchronization between the financial mechanism and the organizational mechanism in accordance with the new provisions of the law. In addition, the Law on Science, Technology and Innovation 2025 stipulates that the Fund has the function of sponsoring and ordering the implementation of science, technology and innovation programs and tasks; to support the improvement of national scientific and technological capacity. However, due to the lack of specific regulations on the organizational model, apparatus and operation mechanism of the Fund, there are still many obstacles in practice, especially in the delineation of responsibilities between subjects in the management and administration of the Fund.  leading to delays in implementation.

Regulations on institutions, mechanisms and resources of the Fund

According to the Draft Decree, the organizational structure of the Fund includes: Strategic Advisory Council, Supervisory Board and Executive Agency[3], in order to establish a governance model in the direction of separating the strategic orientation function, control function and executive function. This approach contributes to ensuring a lean apparatus, clearly delineating responsibilities, and improving the transparency and efficiency of the Fund's operations.

In particular, the Strategic Advisory Council is established as an advisory department to the Minister of Science and Technology in strategic orientation, policy formulation and determination of long-term priorities of the Fund[4]. At the same time, the Supervisory Board was established to support the Minister in controlling the Fund's operations. Article 10 of the Draft Decree has clarified the functions and tasks of the Supervisory Board in controlling compliance with the Fund's operational objectives and principles; supervise openly, transparently, prevent conflicts of interest; control the use of financial resources associated with the results, outputs and impacts of the Fund; at the same time, ensure coordination with inspection and audit agencies and other competent agencies, no overlap and duplication in control activities.

In addition, the Fund's Executive Agency is organized in the direction of promoting decentralization and authorization, associated with the responsibilities of the head. This agency includes the Director, Deputy Directors and professional units; in which, the Director of the Fund is the legal representative and is fully responsible for the operation of the Fund. The Deputy Directors shall be appointed and dismissed by the Minister of Science and Technology on the basis of the Director's proposal, in order to ensure the unity and efficiency of management and administration[5].

Source: NAFOSTED

Fund for Promotion of Scientific and Technological Activities in Service of National Economic Development

Firstly, to encourage enterprises to invest in the development and application of science and technology

In order to concretize the State's strategic orientations, Articles 13 and 14 of the Draft Decree have established a mechanism to prioritize funding for key fields such as high technology, digital technology, semiconductor industry and digital transformation solutions. This is an important legal basis for deploying direct support for key technology tasks.

In addition, the Draft Decree also stipulates co-financing according to the model of 3 houses: State – School/Institute – Enterprise to allow the Fund to co-finance part of the funding from the State budget for scientific and technological tasks in order to mobilize reciprocal resources from enterprises, training institutions, etc  scientific and technological organizations. This also ensures the sharing of responsibilities, benefits and risks among stakeholders, linking research with application and commercialization of results. The regulation is also in line with the goal of identifying enterprises as the center, scientists as the key factor, and the State playing a leading role; to develop research institutes and universities into strong research subjects, closely combining research and practical application for research and development of strategic technologies.

More notably, the Draft Decree also adds a mechanism to support part of the funding for the results of research and development of commercialized technologies of organizations and enterprises with a maximum support of 30%. This clearly shows the principle that the State only provides targeted support, on the basis of market-verified results, avoiding spreading subsidies, and at the same time encouraging enterprises to actively invest and promote technology commercialization, thereby promoting the increase of private sector investment and improving the efficiency of transfer.  application of research results into practice.

Secondly, proactively promote international cooperation and integration in science, technology and innovation

The Draft Decree establishes the function of connecting and supporting domestic and foreign organizations and individuals to participate in the global knowledge network and technology value chain. Article 29 of the Draft Decree specifies that the Fund shall finance and order scientific and technological tasks within the framework of international cooperation under the bilateral mechanism.  multilateral, prioritizing high technology, strategic technology, core technology. The regulation will help improve endogenous capacity and promote technology transfer in line with Vietnam's wishes. In addition, the Draft Decree stipulates that the Fund shall participate, form or co-establish international research funding networks and initiatives to create a framework to support research groups, organizations and enterprises participating in research, production, and global supply chain activities through international funding networks.  international studies program[6].

The draft Decree is expected not only to establish a comprehensive and unified legal corridor on the organizational model, functions, tasks, powers, operation mechanism and financial management of the Fund, but also has profound practical significance in creating a sufficient legal foundation for the Fund to promote its role as an important financial instrument of the State in promoting the development of science, technology and innovation. However, besides positive expectations, the Draft Decree also poses a number of challenges in the implementation process such as the requirement to upgrade the Fund's online management system to implement 100% of the process in the electronic environment, ensuring compatibility with the data architecture framework of e-Government. In addition, ensuring funding for the organization and operation of the Fund is also a "difficult problem" that needs to be carefully calculated.

The draft Decree is an important step in the orientation of national development in the new situation based on science, technology and innovation. When the barriers to finance and technical infrastructure are removed, the Fund will not only strongly promote domestic science, technology and innovation activities, but also strengthen international cooperation, promote the implementation of foreign policy, and raise the level of Vietnam's economy.

Lawyer Nguyen Van Phuc - Hoang Le Thien Thao

HM&P Law Firm