Abstract
In the context of Industrial 4.0, Vietnam has emerged to play a critical role in the global supply chain while facing intense competition and fast changes. However, what drives manufacturing enterprises in Vietnam to innovate themselves and how well they perform in coping with business obstacle remains one of the central questions in the extent of studies. Therefore, this research primarily attempts to establish how innovation investment and obstacles affect technological and non-technological innovations, especially in the growth phase of the industry life cycle (ILC), with an analysis of available data obtained from the General Statistics Office of Vietnam and World Bank Enterprise Survey data with the use of descriptive statistics and regression analysis. The outcome of this article highlights that researchers and practitioners should consider the importance of the industry life cycle in the choice of technological or non-technological innovation through third significant contributions. First, the innovation investment is driven by R&D, and formal training enables both technological- and non-technological innovation. Second, the innovation obstacle related to finance, policy, competition, and regulation directly impacts the choice of innovation activities. Third, this study demonstrates that the firm’s engagement in technological- and non-technological innovation in line with innovation investment can help maintain successful post-innovation performance.
Highlights
After three decades since the 1986 Doi-moi (Renovation), Vietnam had emerged as one of the most dynamic emerging countries in the South East Asian region
This study examines how the level of R&D investment and formal training in the industry growth phase affects the choice of technologicaland non-technological innovations
The statistically positive correlation between the obstacle in FINN, POLT, COMP, and trade regulation (TRADE) and the likelihood of a company innovating indicate that Vietnamese manufacturing enterprises in the growth phase will participate in technological- and non-technological innovation when there is an increase in environmental obstacles
Summary
After three decades since the 1986 Doi-moi (Renovation), Vietnam had emerged as one of the most dynamic emerging countries in the South East Asian region. Vietnam has recently joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Investment Protection Agreement (EVIPA) These agreements make the Vietnamese market lucrative, attracting foreign enterprises’ investment (World Bank, 2020). The key reason leading to impossibly conduct innovation is partly low awareness about innovation and SMEs’ inherent internal capability (Anh, 2014; Brach et al, 2012). Most of these studies have focused on a limited set of factors, including firm size, ownership types, and other firm-specific characteristics (Hue, 2019). The awareness of Vietnamese manufacturing enterprises’ innovation types is a driving force for business growth and the latest phenomenon
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