Economic forecasting and export upgrading opportunities at the industry level: the case of Vietnam’s electronics sector
Economic forecasting and export upgrading opportunities at the industry
level: the case of Vietnam’s electronics sector
Identifying opportunities for upgrading a sector to global value chain is always important for
development policy. This study proposes a new approach to forecast potential products that a country
can upgrade in short and medium term of development, basing on concepts of economic complexity
and product space (networks). We apply the suggested framework to the electronic sector, which is a
critical industry in the world and for Vietnam economy. Using global export data over 20 years of
2001-2020, the study uses algorithms in machine learning techniques to calculate complexity index
and relatedness matrix of exporting products at 6 digit-level. Upgrading opportunities of Vietnam
electronics are forecasted, resulting a list of products for short and medium future production. The
forecasted products for upgrading include products that are highly complex and are closely connected
to products that Vietnam currently has competitive advantages. The paper also discusses the
challenges for Vietnam electronic sector that currently relies on low labor cost and has gradually lost
competitive advantages as consequences of raising wages and focusing on low technological products.