Next-generation competition in Vietnam's industrial parks: from low-cost manufacturing to high-value ecosystems

In the wave of global supply chain restructuring, Vietnam once became a popular destination for manufacturing relocation due to its labor cost advantages and geographic location. However, as international tech giants shift their site selection criteria from "low cost" to "high resilience," Vietnam's industrial real estate model is facing a fundamental test. Experts point out that merely offering production workshops is no longer enough to win the future.

From "Factory Leasing" to "Ecosystem"

Nguyen Van Khue, Chairman of the Vietnam Real Estate Association, stated bluntly at a recent industrial park exhibition in Hai Phong City: "To attract world-leading technology enterprises, we must provide corresponding development space." He emphasized that a new generation of industrial parks should no longer be simple collections of factories, but should become comprehensive ecosystems integrating logistics centers, digital infrastructure, R&D centers, worker housing, education, healthcare, and cultural services.

Behind this shift lies profound industrial logic. High-tech investments, represented by semiconductors and data centers, have infrastructure requirements far beyond those of traditional manufacturing. According to official Vietnamese data, the semiconductor sector has attracted over $14 billion in investment, involving more than 240 projects, while a new wave of capital is flowing into data centers, artificial intelligence, and renewable energy. Investment institutions from South Korea, Japan, Singapore, the United States, and Europe are viewing Vietnam's industrial parks as strategic nodes in the regional supply chain.

Bottlenecks of the Traditional Model

Although Vietnam's industrial production index grew 10.8% year-on-year in the first half of 2026, and the processing and manufacturing sector grew 11.4%, the development of industrial parks has been uneven. Khue pointed out that many parks still follow the old model: logistics facilities lack coordination, weak connections with urban areas, shortages of worker housing and expert apartments, and substandard social services. Progress in digital transformation and green transformation is slow, and the quality of investor support services varies. In addition, administrative bottlenecks such as land clearance, land prices, and investment procedures persist.

Nguyen Duc Hien, Deputy Director of the Central Policy and Strategy Committee, believes that a new generation of industrial parks must become spaces where innovation and digital technology intersect, with artificial intelligence and high-quality human resources at the core, forming innovative industrial clusters that directly enhance national productivity and competitiveness.

Global Trends Driving Transformation

Globally, the narrative of industrial real estate is changing. Competitors such as Mexico, India, and Thailand have launched the concept of "smart industrial parks," integrating clean energy, smart grids, and employee communities. If Vietnam cannot escape the low-cost trap, it may fall behind in the upgrading of global value chains. Tran Van Toan, Vice Chairman of Hai Phong City, noted that currently 70% to 80% of new foreign direct investment in processing and manufacturing is concentrated in industrial parks, with foreign-invested enterprises contributing about 20% of GDP and over 70% of exports, directly employing nearly 3.83 million workers. These figures represent both achievements and risks—once industries relocate, the impact will be systemic.

The Path Forward: Digitalization and Greening

Khue proposed that successful industrial parks should be driven by data, AI, IoT, and big data to achieve intelligent operations, thereby improving efficiency, saving energy, and reducing costs.Ruan Wenkui proposed that successful industrial parks should be driven by data, AI, the Internet of Things, and big data to achieve smart operations, thereby improving efficiency, saving energy, and reducing costs. This means that park managers need to transform from land developers into industrial service providers, proactively building 5G networks, dedicated cloud platforms, and renewable energy systems. At the same time, providing affordable housing and quality public services for workers is essential to retain talent and sustain competitiveness.

Notably, Vietnam has set an annual GDP growth target of over 10%, which requires industry to maintain double-digit growth. Against this backdrop, industrial parks must simultaneously advance the synchronization of planned infrastructure, green transformation, and digital transformation, while focusing on attracting cutting-edge projects in semiconductors, artificial intelligence, and other fields.

Challenges and Opportunities Coexist

Transformation does not happen overnight. Although the policy direction is clear, practical implementation still faces issues such as insufficient clean land reserves, difficulties in local government coordination, and rising investment costs. Moreover, global tech giants are increasingly demanding supply chain resilience, and Vietnam must continuously demonstrate its strengths in energy reliability, political stability, and labor rights.

For investors, the next decade of Vietnam's industrial real estate will no longer be a simple matter of land trading, but a competition in park operation capabilities, innovation service levels, and comprehensive supporting facilities. Parks that successfully complete their ecological transformation first will have the opportunity to dominate the wave of semiconductors, AI, and green energy. For Vietnam itself, this is not only an adjustment of industrial policy but also a reshaping of its national competitive narrative—evolving from a "world factory" to an "innovation hub."