In the context of the global industry transitioning into the Fourth Industrial Revolution, Vietnam's mechanical engineering and manufacturing sector remains relatively backward, with its technological level primarily still at the stage of the Second Industrial Revolution, facing numerous difficulties and shortcomings such as: The mechanical production sector remains at a processing level. In many fields, domestic enterprises are still not capable of independently designing and manufacturing products with international competitiveness; they are unable to manufacture components and spare parts for multinational corporations or repair complex equipment... Mechanical enterprises are often small-scale, with poor management, low technology, and weak linkage capabilities. The application of electronic and information technology is not yet widespread, being mainly concentrated in foreign-invested enterprises. However, due to good production organization, there have been and continue to be many types of products that Vietnamese enterprises produce very well, such as hydraulic mechanical equipment for hydropower plants, oil and gas drilling rigs, and non-standard parts for the cement, thermal power, and petrochemical industries.

In the recent period, implementing the policy of developing science and technology to serve the development of the sector, the domestic mechanical engineering industry has achieved significant results, contributing to the country's industrialization and modernization. In Vietnam, in some projects, with the support of scientific and technological activities, notable results have been achieved. We will review some successful projects as follows:

– In the cement industry, domestic mechanical enterprises have cooperated with China's Tianjin Group, purchasing main equipment along with the basic design from Tianjin, combined with sampling existing equipment in Vietnam, and leveraging their available experience to design, manufacture, and domestically supply 40% of the equipment for the Song Thao cement plant.

– In the hydropower sector, before 2005, Vietnam had to import almost all hydraulic mechanical equipment from abroad. Following the Government's policy of maximizing localization, under the direction of the Ministry of Industry and Trade, enterprises sought to purchase designs and receive technology transfer from abroad. Since 2005, domestic companies have cooperated with Ukraine's ZaparozeGhidrostal company to design hydraulic mechanical equipment. To date, they have fully mastered the design and manufacturing, supplying equipment for dozens of projects worth thousands of billions of VND, at a significantly lower cost compared to imported products. Most recently, this includes supplying equipment for the Son La and Lai Chau hydropower plants.

– In the oil and gas exploration sector, following the localization policy of the leadership of the Vietnam Oil and Gas Group, domestic companies have cooperated with the US company LeTourneau and several Singaporean companies to build new 90-meter water depth drilling rigs. Using basic designs and some main equipment purchased from abroad, we have not only manufactured drilling rigs with quality equivalent to G7 standards and competitive costs but also trained a team of design engineers and manufacturing workers, gradually mastering the technology for designing and manufacturing drilling rigs. In the bauxite mining and processing industry, following the policy of promoting internal resources, the leadership of the Vietnam National Coal and Mineral Industries Group assigned the National Research Institute of Mechanical Engineering as the EPCM contractor, allowing the Institute to hire foreign experts to undertake tasks previously reserved for foreign contractors. This approach not only saves costs for the investor but also significantly enhances the Institute's design and project management capabilities. Through hiring and working alongside experts, the Institute can now undertake basic design for new projects. For managing subsequent projects, the Institute can reduce the number of foreign experts and replace them with its own engineers.

– And most recently, the Ministry of Industry and Trade and the Ministry of Science and Technology authorized the Institute to implement two major S&T tasks: First, the S&T Project "Completing the design and manufacturing technology, and trial manufacturing of electrostatic precipitators with a capacity of 1,000,000 Nm3/h". The Institute succeeded in designing and manufacturing ESP equipment for thermal power and cement plants, achieving a localization rate of over 79.6%, including both design and manufacturing, and notably localizing key components such as collecting plates, discharge electrodes, rapping systems, and electrical and control systems. The project results are being applied to the Thai Binh 1 Thermal Power Plant project and will be replicated for the Nghi Son 2, Vung Ang 3.1, and Quynh Lap 1 Thermal Power Plant projects. Furthermore, with support from S&T funds combined with funds from economic contracts, the Institute completed investment in a modern production line for manufacturing specialized collecting plates and discharge electrodes. Second, the S&T Project "Research, design, manufacture, assemble, and commission a coal handling and conveying system for coal-fired thermal power plants with unit capacity up to approximately 600MW" is part of the S&T Project "Research, design, manufacture, and commission a number of auxiliary equipment systems for coal-fired thermal power plants with unit capacity up to approximately 600MW". This project is being applied to the Song Hau 1 Thermal Power Plant, with the proportion of design consultancy work performed domestically exceeding 40%, including basic design, and the manufacturing portion accounting for approximately 50.3%. By combining funds supported by S&T with funds from economic contracts, the project completed investment in a production line for conveyor systems with a design capacity capable of serving at least four thermal power projects with a capacity of approximately 1200 MW per year.

However, it must be acknowledged that the contribution of S&T from Vietnamese enterprises in general to the development of the mechanical engineering sector in recent times has been very limited. Evidence is that most major national projects are undertaken by foreign general contractors, and most specialized fields have not achieved the desired development. For example, the synchronous equipment sector set a target of "striving to meet 40% of the demand for synchronous equipment," but mechanical enterprises have mainly only participated in producing non-standard products and have not mastered the design aspect, accounting for only about 20% of the total equipment value of the projects. The power machinery sector aimed to "produce marine engines of 400 CV or more, with a localization rate of 35-40%," but has only reached the level of marinizing 60-80 CV engines. The tractor and agricultural machinery sector aimed to "produce medium-sized 4-wheel tractors of 50-80 CV by 2010," which was also not achieved...

 Several reasons can be identified as follows:

First, because the interests of researchers, manufacturers, and investors often conflict, the application of research results into actual production, especially in projects under major economic programs, is very limited. Research is only truly effective when combined with long-term socio-economic programs. Through application in some projects, research results are perfected, making product costs competitive, and the costs of purchasing and receiving technology transfer are amortized over several projects.

Second, although we have a mechanical engineering development strategy, we have not yet built a strategy linking mechanical engineering development with specific industrial sectors: specific objectives and evaluation criteria have not been defined; the strategy's objectives are not reviewed and evaluated periodically; support mechanisms are not implemented. The development strategies for industries such as cement, energy, minerals, and chemicals are not linked to the mechanical engineering strategy. Furthermore, although some sectors have strategies and plans, they are not implemented seriously.

Third, we have not clearly oriented the S&T fields that need priority development. For example, currently, all EPC packages in industries such as energy, chemicals, and minerals are undertaken by foreign general contractors. One of the reasons is that we do not master consultancy, design, and project management. If we have a clear goal to become self-reliant in design, manufacturing, and construction technology in certain industries, we will invest in S&T capacity in a targeted manner, and we will certainly have a scientific and technological workforce capable of undertaking that task. For example, when the Ministry of Industry and Trade identified hydraulic mechanical equipment as equipment that could be manufactured domestically but for which we lacked design capacity, the Ministry assigned the National Research Institute of Mechanical Engineering to purchase designs and receive design technology transfer from abroad. After only three designated projects, we have completely mastered this market. However, this is one of the very few orientations provided by the State for the activities of scientific research units. Currently, design research units are left to fend for themselves without any State orientation. Consequently, throughout this period, research units have had to self-orient their development, seek their own work, and even define their own fields of activity. Thus, the already weak and limited S&T capacity becomes even more fragmented and contributes almost nothing to the country's key socio-economic development programs.

Fourth, we cannot protect the market to provide ground for S&T development; we lack an overall development plan and lack overall coordination and direction among ministries, sectors, and economic components to achieve strategic objectives. For example, the investment capital for constructing thermal power plants in the 2007-2025 period is about 80-100 billion USD. Through many studies, it is seen that we could localize about 50% of the auxiliary equipment of the plant, accounting for about 30% of the total equipment value of the plant. The Government had specific policies in Decision 1791 to develop auxiliary equipment for thermal power plants. The Ministry of Industry and Trade and the Ministry of Science and Technology approved S&T projects worth hundreds of billions of VND to achieve this goal, but there is no mechanism binding investors to apply the project results. The experience of the National Research Institute of Mechanical Engineering is that only when we have a project can we find partners for technology transfer cooperation; without a project, partners may not even be interested in cooperation invitations from consultancy and design units. However, investors usually do not want domestic contractors to be main contractors, forcing Vietnamese contractors to stand behind foreign contractors, and the consequence is that negotiations for technology transfer become very difficult.

Fifth, we have not established specific targets for developing S&T capacity. For example, when the Government designates contracts for domestic enterprises to implement projects to increase the localization rate and enhance consultancy, design, and project management capacity, it does not set specific indicators to be achieved during implementation. Furthermore, the review, evaluation, and application of results on a wider scale are limited. Thus, the already limited market protection becomes even less effective.

Based on the above analysis, for S&T activities to meet the requirements of sustainable development and modernization of the mechanical engineering sector, the author recommends:

– An overall development strategy for industrial sectors needs to be formulated. The mechanical engineering development strategy will be a part of this overall strategy, clearly identifying the industrial fields the State is determined to master, and building a synchronous plan to capture this market, including market protection, investment incentives, capital arrangement, and S&T capacity development. In this context, developing S&T capacity is just one of the tasks needed to achieve the goal.

– For feasible S&T projects that achieve results, the State should apply a direct assignment method, with regulations requiring investors to accept and apply them. Only then, after the first 2 to 3 projects are applied, will the S&T project implementing units have the basis of capacity and experience to participate in bidding.

– Specific criteria for developing S&T capacity are needed, along with mechanisms for monitoring, drawing lessons, and applying results on a wide scale to maximize the effectiveness of S&T capacity development.

– Enterprises need to optimize their operational models to achieve high efficiency in production and business by selecting suitable products and forming mechanical processing centers to have a flexible production system capable of meeting rapidly changing market demands. Given the current state of the mechanical engineering and manufacturing sector and economic conditions, priority should be given to developing products that can participate in the global supply chain. Additionally, genuine industrial clusters should be established, including small and medium-sized mechanical enterprises and supporting organizations and enterprises such as material and input suppliers, export companies, logistics providers, banks, and infrastructure providers...

– Administrative procedures in S&T projects need to be simplified. The time from registration to approval of an S&T project, making it ready for implementation, should be specifically regulated to not exceed 3 months to minimize phase discrepancies between the implementation of S&T projects and production projects.

– Finally, mechanical enterprises need to approach and master information technology: Access new information technology solutions, master data analysis and processing science to adapt to and leverage the strengths of information technology.

It can be said that, in the context where the industry in general and Vietnam's mechanical engineering sector in particular have not yet completed the Third Industrial Revolution, the fastest and most correct path for science and technology to serve the goal of national industrialization and modernization most effectively is to create a market for developing key mechanical engineering fields and to accelerate the reception of technology transfer from advanced countries. For this to be achieved, on one hand, the Government must have clear, focused industrial development orientations and plans; on the other hand, enterprises must also reform themselves, reorganize and optimize their operational models, focus on applying new science and technology to production, and enhance the application of information technology in management and production.