Viet Nam – Anticipating skills for a high-tech formal economy

Viet Nam wants to transform itself into a more skilled, high-tech formal economy, but it can only do that if it has a deeper understanding of its large informal labour force and the skills needed to achieve its goal. The ILO enabled its government to gain those insights so that it can move forward with greater confidence.

Web page | 10 December 2021

At-a-glance achievements

Informal employment has always been a major part of Viet Nam’s economy, but little has been known about its true scale, characteristics and trends. In fact, until the ILO’s involvement, there were no laws that explicitly addressed informal labour, and no system for anticipating the skills that workers might need to support the country’s long-term growth plans.

Key elements of our support included:
  • Conducting the first, detailed analysis of the country’s informal labour force: Our analysis of informal employment in Viet Nam used the well-established ILO conceptual framework, based on standard international classifications. We found that informal employment has been falling, from around 80% of all employed in 2013 to nearly 68% in 2019, but the numbers are still large, with over 36 million in informal work, predominantly in agriculture (ILO analysis based on Labour Force Survey data of GSO- VietNam). Some sectors, such as manufacturing, are formalising labour more rapidly than others, suggesting possible structural reforms to accelerate the shift of employment into those sectors. However, the analysis revealed that informal employment varies significantly between sectors, regions, age groups and gender, indicating the need for more targeted policies. The results of our study, which can be downloaded here, were not only discussed in the National Assembly and promoted in social media, but also led to a revision of the Statistics Law so that officially recognises a national indicator for ‘workers in informal employment’, based on the definition used in the ILO’s conceptual framework.
  • Establishing a system for anticipating the skills needed in future: Viet Nam had no methodology for anticipating the skills to achieve its goal of becoming a more skilled, formal economy. To help it develop a system, based on the methodology that ILO has successfully applied across the globe, we initially carried out an analysis of its data and policies to identify gaps that needed to be filled to predict future skill requirements. Examples of gaps included lack of data on workers’ qualifications and the absence of policies to encourage businesses in different sectors to develop skills. The country’s Prime Minister recently approved a skills strategy, incorporating the skills anticipation system that we enabled the government to establish.

Moving forward

We will continue to support the inclusion of skills recognition for informal workers in the revision of the Employment Law, and help create career development support tools for them so they can plan for decent work and careers in the formal sector.