These economies have benefited from growing investment in semiconductors, electronic components and data-centre equipment.
The report identifies Vietnam as one of the few economies outside the European Union (EU) to have adopted a comprehensive AI regulatory framework as early as 2025. Vietnam applies a risk-tiered approach similar to that of the EU AI Act, imposing different obligations depending on whether an AI system poses “unacceptable,” “high,” “low” or “minimal” risks. The approach is viewed as a strategic step towards ensuring safe and transparent AI governance.
The report, however, offers an important caution through a case study from Vietnam: AI cannot simply be “imported”. An AI model developed by the University of Oxford to classify patients suspected of having COVID-19, which performed well in the UK, saw its performance decline sharply when tested at two hospitals in Vietnam. Differences in demographic and epidemiological characteristics between the populations were a key factor. The example underscores the need for Vietnam to invest in local data and strengthen its capacity to fine-tune AI systems to domestic conditions so that the technology can better serve its people.
In the labour market, the report notes that while wealthy economies are concerned about AI-related job displacement, the risk is lower in Vietnam due to the large share of workers engaged in agriculture and labour-intensive manufacturing. In the garment sector, for instance, automated cutting and sewing technologies have existed for decades, but remain relatively uncommon in Vietnam because local labour costs are still more competitive than investment in AI and robotics.
This is an economically rational response, but also a reminder of the need to upgrade workers’ skills as technology becomes increasingly affordable.
AI offers Vietnam an opportunity to accelerate its development and strengthen its position on the global technology map. With proactive policymaking, the country is moving in the right direction. However, Gaurav Nayyar, Director of the World Development team in charge of the 2026 report, said Vietnam and developing countries in general need to build the foundations now – including energy infrastructure, connectivity, skills and institutions – to be ready to adopt and adapt AI for the benefit of their people./.
