Sponsors: Swiss Agency for Development and Cooperation (SDC), Swiss National Science Foundation (SNF).

Project: Employment effects of different development policy instruments


Start: 1st February 2014

End: 31st January 2017 (with a 36 months extension possibility subject to a positive mid-term evaluation)

Participants: – Leaders from Switzerland: Bern University/WTI, the University of Geneva

– Research institutions from 6 countries: Bangladesh, Ethiopia, Ghana, Madagascar, South Africa, and Vietnam

Vietnam team: from Foreign Trade University (FTU) and Central Institute for Economic Management (CIEM), led by Assoc.Prof.Dr. Nguyen Thu Thuy from Faculty of Business Administration, FTU.

The main objective of this research programme is to provide concrete knowledge in developing countries and international institutions about the processes underlying economic transformation and the employment effects of various policy options. Depending on how such information is taken into account, decisions by regulators and policy makers can thus be improved.

The study concentrates on three interlinked development mechanisms that need to be better understood, particularly in a rapidly evolving globalisation context, and considering the different nature of industries and their impact on quantitative and qualitative employment effects: a)    Technology Upgrading b)    Integrating Enterprises in (global) Value Chains c)    Transitioning Labour Markets Vietnam’s contribution to the Programme Research background Economic growth in Vietnam has drastically changed the economy’s structure. The share of labour in agriculture has been diminishing, while increasing in manufacturing and services. The process of developing Vietnam’s economy has run parallel with the process of liberalizing economic activities in the private sector. The sector has responded quickly and strongly: the number of private enterprises went up 50 times during 2000-2011. Vietnam is also implementing ambitious policies to enhance workforce development and R&D. These policies aim to minimize the gap between the supply and demand of labour. Vietnam will pilot around 4 industrial clusters where inter-connected companies, specialized service providers, associated institutions in a particular field work together within a geographic concentration. Research questions Has the change in the occupational distribution of the labour force enhanced the technological upgrading in the economy as a whole and in each sector? Has the expansion of the private sector been accompanied by technological upgrading in this sector? What is the perception of Vietnam’s policy-makers about the role of technological upgrading and labor skill enhancing in the economic development process? How is the perception translated into corresponding policies’ formulation and implementation? Does the presence of MNCs in Vietnam help local enterprises get integrated into these MNC’s global value chains? What is the set of specific proposed policies to promote the participants in industrial clusters get connected, especially the interconnections between enterprises, technical suppliers, and skill suppliers? Are industrial cluster promoting policies effective in helping (i) local enterprises get integrated in global production value chain; (ii) upgrade the technological capacity of the participants within the industrial clusters; (iii) to minimize the mismatches between supply and demand of skills; and (iv) to enhance labour productivity?

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