Breakthrough financial mechanisms for strategic technologies

The Minister of Science and Technology has issued Circular No. 49/2026/TT-BKHCN stipulating financial mechanisms for research and development tasks involving strategic technologies under the National Special Programme on Science, Technology, and Innovation for Strategic Technologies.

Reforming remuneration mechanisms to attract high-quality talent

Circular No. 49/2026/TT-BKHCN translates the policy into highly actionable financial mechanisms, including remuneration based on job positions; hiring experts under market-based arrangements; managing funding by work packages and milestones; payment by results; greater autonomy; mobilisation of non-budgetary resources; contingency funding; implementation of multiple independent research approaches; and financial arrangements for accepted risks.

One of the most significant changes is the remuneration mechanism for personnel undertaking strategic technology tasks.

Instead of relying primarily on administrative titles or days worked, remuneration is strictly determined according to the job position, professional requirements, responsibilities, time commitment, and outputs. The lead organisation is given the discretion to determine appropriate job positions for each work package based on the actual requirements of the task.

In developing the policy, the Ministry of Science and Technology studied and benchmarked the research workforce model of Singapore’s Agency for Science, Technology, and Research (A*STAR), comparing positions with equivalent responsibilities and levels of accountability. The proposed rates were developed with reference to incomes in Singapore, adjusted for post-tax income and purchasing power parity (PPP), rather than being mechanically converted using nominal exchange rates. At the same time, remuneration levels carefully balance the need to remain competitive in attracting highly qualified science and technology personnel and the scarcity of certain specialised positions, particularly chief engineers.

Under this benchmarking approach, proposed remuneration is tiered according to responsibility and contribution: chief engineers may receive up to 300 million VND per month; task leaders up to 150 million VND; key members up to 120 million VND or 100 million VND per month, depending on their positions; personnel directly involved in implementation may receive up to 70–90 million VND per month, depending on their positions; and technicians and professional support staff up to 45 million VND per month.

These are ceiling rates for the preparation, appraisal, and approval of budget estimates. The remuneration of each individual is determined according to their job position, number of months, and actual percentage of time devoted to the task.

This approach clearly reflects the view that investment in strategic technologies must first and foremost be investment in people capable of creating and mastering those technologies. To attract chief engineers, scientists, and highly qualified technology professionals, remuneration policies must be commensurate with their responsibilities, capabilities, and the value they create.

Opening up market-based arrangements for hiring leading domestic and international experts

For fields in which Viet Nam does not yet have sufficient expertise or where rapid access to international knowledge and technology is required, the Circular allows domestic and foreign experts to be hired under negotiated arrangements.

Fees are determined based on professional requirements, the scope and nature of the work, qualifications, capabilities, experience, duration of engagement, prevailing market rates, and international practices.

The normal monthly fee for an expert may not exceed the remuneration of a task leader. Where it is necessary to hire an expert at a higher rate, the lead organisation must explain the necessity, the basis for determining the fee, the availability of the expert, the expected effectiveness, and its ability to balance the funding. The maximum fee may be equivalent to that of a chief engineer — 300 million VND per month.

This mechanism helps dismantle one of the longstanding barriers to advanced technology research: financial ceilings should not become a reason why Viet Nam is unable to mobilise the right experts for a strategic technology challenge.

Managing funding by work packages and milestones

A fundamental new feature is the method of preparing budgets and managing funding according to work packages and milestones.

Each work package clearly defines its objectives, scope, outputs, funding, responsible organisation or individual, and implementation period. The overall budget is built from the individual work packages and consolidated according to assessment milestones.

This provides clear answers to three questions in task management: what are the resources being used for; what outputs must be produced; and when must those results be verified?

The mechanism brings financial management closer to the technology development process, rather than forcing scientific progress to follow administrative payment procedures.

Performance at each assessment milestone serves as the critical basis for disbursing and settling funds and deciding whether funding should be provided for the next phase. For milestones subject to lump-sum payment through to the final product, once the assessment council confirms that the results meet requirements, funding is paid according to the approved lump sum.

Milestones also serve as control points for deciding whether to continue, adjust, or terminate a project early based on actual results — an approach commonly described as “Go/No-Go”. If results at a milestone fail to meet requirements, the provision of funding for the next phase or continuation of the research approach will be considered in accordance with regulations. This allows resources to be concentrated on research directions that are producing results and show promise, while swiftly curtailing approaches that are no longer viable.

Thus, milestone-based lump-sum funding is not merely intended to simplify payment procedures; it also provides a results-based tool for managing a portfolio of tasks. It gives research organisations greater autonomy during implementation while maintaining clear control points to ensure the optimal use of state budget funds.

Multiple research approaches to address major challenges

New technology research cannot always predict in advance which approach will succeed. Therefore, for challenges where several technological approaches are feasible, the new mechanism allows multiple independent research approaches to be pursued towards the same objectives, requirements, and assessment criteria.

Each approach has its own budget estimate, funding allocation, contract, payment, and financial settlement, and is assessed and screened according to results at each milestone.

An approach that is no longer appropriate may be terminated. Funding corresponding to completed milestones is paid and settled in accordance with regulations, while no further budget is allocated for milestones that have not yet been carried out.

This mechanism enables multiple technological pathways to be tested without spreading resources thinly throughout the entire task, thereby increasing the chances of selecting the best solution based on actual results.

Contingency funding for unexpected developments

For strategic technology development tasks, contingency funding is established to address unforeseen developments arising during implementation in accordance with regulations. The contingency is determined based on the scope of work, technical requirements, implementation schedule of each work package, and factors that may arise during the task.

The amount of contingency funding is proposed by the lead organisation and considered and decided by the task management authority, but may not exceed 10% of the total estimated funding from the state budget for the task. The contingency is prepared, appraised, and approved together with the task budget.

The use of contingency funding must have a clear basis. The lead organisation must provide an explanation, assume responsibility, and use the funds only in cases permitted by law. Funding is provided within the approved contingency limit based on the proposal of the lead organisation and the decision of the task management authority. This mechanism creates vital room for the timely handling of legitimate unforeseen developments, helping minimise disruptions to technology research and development.

Greater autonomy in selecting contractors and suppliers

For the procurement or leasing of equipment, machinery, goods, and services directly serving the task, the lead organisation is authorised to decide and assume responsibility for selecting contractors and suppliers. Such selection must comply with the laws on bidding and relevant specialised legislation, as well as the technical requirements of the task.

This autonomy must be accompanied by requirements that procurement directly serve the objectives of the task, meet technical, technological, and schedule requirements, ensure openness, transparency, and efficiency, avoid conflicts of interest, and comply with the law.

For strategic technologies that evolve rapidly, time is also a resource. A lengthy financial procedure can mean losing an opportunity to access equipment, technology, or a market. The new mechanism therefore seeks to place decision-making authority closer to those directly responsible for conducting research, while clearly defining the accountability of decision-makers.

To prevent disruptions to research, the lead organisation may use its own legitimate financial resources or other lawful sources of funding to advance the costs of urgent activities that need to be implemented immediately, before state budget funding is disbursed.

Advanced funding is then included in the relevant payment and financial settlement in accordance with regulations. This mechanism is particularly important for research, testing, or procurement activities that need to be carried out continuously, where a delay at one stage could affect the entire schedule of a work package and the overall task.

Mobilising social resources for strategic technology development

The Circular also expands mechanisms for mobilising counterpart funding from businesses, organisations, and individuals participating in tasks. Counterpart contributions are not limited to cash and may include machinery, equipment, technology production lines, laboratories, testing facilities, and technical infrastructure; intellectual property rights, technology-use rights, software, and intangible assets; direct personnel costs and other lawful resources.

Recognising the actual resources contributed by participating businesses and organisations helps pivot from the concept of “the State funding a research project” towards a model in which the State and society jointly mobilise resources to address strategic technology challenges.

This also provides a basis for increasing business participation from research and testing through to the adoption, transfer, and commercialisation of results.

Research and development in strategic technologies is inherently uncertain. Even an approach selected on a sound scientific basis and implemented in accordance with regulations may fail to achieve the expected results due to technical limitations or objective factors arising during the research process. The new financial mechanism is designed to better accommodate this inherent uncertainty.

Where a task is determined to fall within the category of accepted risks under the law, the lead organisation is not required to repay state budget funds that have been used for the approved objectives, activities, and scope, and in compliance with regulations. This mechanism creates greater room for scientists, businesses, and research organisations to pursue new and challenging technological directions with breakthrough potential.

At the same time, the mechanism remains subject to accountability and the principles of budget management. Funds used for improper purposes or in violation of the law must be repaid; fraud or deliberate violations are subject to sanctions in accordance with regulations. The policy thus both recognises the inherent uncertainty of research and ensures that public resources are managed properly, openly, and transparently.

This approach seeks to strike a balance between encouraging innovation, respecting the inherent uncertainty of research, and ensuring that public resources are managed properly, transparently, and in accordance with regulations.

Empowerment accompanied by post-audit oversight and accountability

Lead organisations are given greater autonomy in organising personnel, allocating resources, adjusting funding within permitted limits, and implementing tasks, but they must remain strictly accountable for outputs, technical targets, schedules, the effectiveness of funding use, and the absolute accuracy of their documentation.

Information on the management and use of funding is actively updated on the Digital Platform. The relevant authorities monitor and supervise implementation according to risk-based management principles and may instantly request explanations, inspections, or independent audits where there are sufficient grounds to do so under the regulations.

This represents a decisive shift away from management focused heavily on pre-approval controls towards a modern model of empowerment, results monitoring, post-audit oversight, and risk control — accelerating research while maintaining ironclad budgetary discipline.

Circular No. 49/2026/TT-BKHCN does not merely adjust spending norms; it seeks to fundamentally change the way the State uses financial resources to promote strategic technologies: investing appropriately in people; mobilising elite experts; organising resources by work package; allocating and disbursing funding according to strict performance milestones; empowering implementing organisations; encouraging businesses to participate; creating room to address calculated research risks; and strengthening post-audit oversight and accountability.

Through these mechanisms, public resources will be directed more strongly towards final tangible outcomes: mastering technologies, developing products, promoting technology transfer, and commercialisation, thereby forging a powerful foundation for greater technological self-reliance and national competitiveness.