Many private and foreign companies demand more highly-skilled workers, and are unwilling to pay more for employees with degrees that often lack equivalent skills.
Nguyen Van Duc is an economics graduate from one of Vietnam’s top universities. However, today, he earns about $250 a month as a motorbike taxi driver in Hanoi. Duc is among the many Vietnamese college graduates who failed to secure jobs even though the nation’s unemployment rate is at a mere 2.3 percent.
Duc attributed this phenomenon to the heavy theoretical training received in university, coupled with a large part of Ho Chi Minh’s ideology with communist party history. While Vietnamese institutions equip students with basic skills for low-wage rank and file jobs, its tertiary institutions are failing to prepare youths for more highly skilled jobs. This outlook can ultimately impact its government’s ambition to attain middle-income status as wages increase and basic manufacturing leaves for cheaper alternatives.
Countries that successfully progress to the next economic stage often develop their education systems when they were middle-income economies. Singapore, South Korea and Taiwan developed high-quality higher education before their economies needed a more educated workforce. On the contrary, countries who failed to improve their schooling system either face a situation of distress or remained at status quo.
Undergraduates in Vietnam frequently spend much of their first two years learning about revolutionary leader Ho Chi Minh, socialism and party history as opposed to relevant skills needed by employers. Many private and foreign companies demand more highly-skilled workers, and are unwilling to pay more for employees with degrees that often lack equivalent skills. The unemployment rate among graduates is currently at 17 percent, as such, more parents are now sending their children to study abroad to enhance their work prospects.
Even though the Vietnamese government has made attempts to improve the quality of training in its tertiary institutions, the progress is still relatively slow. In addition, despite the nation’s 97 percent literacy rate, only a third of Vietnam’s labor force had a high school degree last year, according to the Institute of Labour Science and Social Affairs. Vietnam has a low productivity record despite its rapid expansion rates and its economy has one of the weakest industrial productivity levels in the Association of Southeast Asian Nations.
Source: Bloomberg