As indicated in the first section of this report, Vietnam’s working age population is set to decline in the coming decades and in turn, overall labour productivity is likely to decline. As a result, this will “probably be a drag on per capita growth between 2020 and 2050,” according to an IMF blog post.

The World Health Organization now considers Vietnam to have one of the world’s fastest ageing populations in the world.

• At the moment, the elderly population hovers below 4% of the country’s population, which equates to about 10 million people over the age of 65.
• By 2030, this is expected to rise to almost 7% of the population, and more than 10% by 2050.

Added to this, Vietnam has a low retirement age (currently 60 for men and 55 for women), and now has the second-highest life expectancy in Southeast Asia (75 years).

In a move towards decentralisation, the government seeks to shift from a highly specialised centrally planned system to a more autonomous system of multi-disciplinary universities.

Tran Anh Tuan, deputy director of MOET’s University Education Department, said Vietnam endeavours to change four issues related to higher education:

1.  Upgrading training quality
2.  Giving autonomy to schools
3.  Conducting school accreditation
4.  Improving scientific research

Circle back to the Education in Vietnam report section for a refresher on the country’s education landscape.

As much as the Vietnamese economy is growing, it is not yet doing so on the strength of its university graduates.

• Youth unemployment is nearly 3 times that of the national average: 6.3% of those aged 15-to-24 are out of work, compared to a national unemployment rate of 2.3%.
• The General Statistics Office indicates that 1 of every 5 unemployed people in Vietnam has a bachelor’s or master’s degree.
• While in developed countries, 25-30% of the labour force is composed of university graduates, they make up only 7% of the labour force in Vietnam.
• Among working-age Vietnamese, students with bachelor or vocational degrees were the most likely to be unemployed in 2015 – while those with no training and no specific skills somehow were the least likely to be unemployed, according to the Institute of Labour Science and Social Affairs.

Between 2003 and 2006, the percentage of firms that reported difficulty in recruiting workers…

• increased from 37% to 63% for engineers and technicians;
• increased from 54% to 70% for middle managers;
• was low at 14%–20% for manufacturers (e.g., production-line workers).

The World Bank released a detailed report in 2018 entitled “Vietnam’s Future Jobs: Leveraging mega-trends for greater prosperity” which identifies the challenges and opportunities for better quality and more inclusive jobs in Vietnam and shares policy reforms that could be a catalyst to create these jobs. The report outlines recommendations drawing from macroeconomics, agriculture and rural development, business environment and exports, labour force participation and mobility, employment, trade policy, gender, education and skills training, and demographics.

In December 2018 Saigon Online reported that the Asian Development Bank (ADB) approved a USD 78 million financing package to help Vietnam’s labour force meet market demands by improving the quality of National Technical and Vocational Education and Training (TVET) institutions.

The Skills and Knowledge for Inclusive Economic Growth Project, supported by a USD 75 million loan from ADB, will provide advanced training equipment to 16 national TVET institutes. In collaboration with the business community, these upgrades will enhance the quality of training programmes for advanced skills in key growth areas, such as electronics, mechanics, biotechnology, automation, and automotive.

In addition, a USD 3 million grant financed by the government of Japan will complement these activities by strengthening the quality of the soft skills and developing demand-driven short-term skills programmes for women and youth in disadvantaged communities.

“With more than 60% of the population under age 35, Vietnam has the potential to help deliver high and sustainable economic growth,” said ADB Senior Social Sector Specialist Ms. Sakiko Tanaka. “To help realise this potential, this project aims to help ensure Vietnam’s labour force has the skills and knowledge necessary to increase their competitiveness and productivity for the global market.”

Vietnam is currently facing a shortage of skilled labour, and its labour productivity is lower than its neighbours in Southeast Asia (e.g., 7.5% of Singapore’s and 17% of Malaysia’s in 2015). Moreover, a recent survey by Vietnam’s Chamber of Commerce and Industry said TVET graduates lack industry-specific skills and other soft skills.

The project is expected to benefit about 75,000 students as a result of an improved teaching and learning environment. At least 2,500 adults and out-of-school youths are expected to take part in short-term skills training courses to help them find better-paying jobs or start their own businesses.

The rise in outbound student numbers corresponds with outbound travel habits from globally curious Vietnamese consumers.

In 2018, Visa released its Global Travel Intentions (GTI) Study which analysed international travel trends and the behaviour of more than 15,000 global travellers from more than 27 countries and territories. The report shows that Vietnamese travellers are expected to take on average nearly five trips abroad in the next two years, up from 3.5 trips in the last two years.

Vietnamese travellers are also expected to spend more on their trips overseas. Each traveller is expected to spend an average of USD 1,100 per trip, up from USD 880.

The average time spent overseas by Vietnamese travellers was four nights per trip over the past two years, much lower than the Asia-Pacific average of seven nights. They also chose destinations that were, on average, 4.5 hours travel time away.

Thailand, South Korea, Japan and Singapore were the most visited countries. Intra-region travel dominated, with 91% of Vietnamese travellers visiting destinations in Asia in the past two years.

They are likely to continue to be well patronised over the next two years, with the U.S emerging in the top five.

Meanwhile, Mastercard Advisors forecast that some 7.5 million Vietnamese travellers will venture outside the country in 2021, increasing from only 4.8 million in 2016.

About 6.5 million Vietnamese tourists travelled abroad in 2016, an increase of 15% from 2015, according to the national Vietnam Tourism Association.

Annually, Vietnamese spent over USD 3.491 billion a year on travel and accommodation – and that’s just via ecommerce – an increase of 16% in the last year.