In January 2007 — following ten years of negotiations — Vietnam became the 150th member of the World Trade Organization (WTO). To further achievements made since 1986 and meet challenges imposed by current economic reforms such as the WTO accession, Vietnam does not only need “20,000 PhDs” as stated by the government, but it also needs a basic skilled labour force. As of 2008, roughly eighty per cent of Vietnam's workforce was unskilled. But skilling will be essential if Vietnam is to sustain the industrialization process and the quality of skilling in Vietnam will have wide-ranging effects on the quality of industrialization the country will experience. This chapter examines the evolution of the national skills development system in Vietnam and discusses some of the initial consequences of the WTO accession on skilling in Vietnam.

Although frequently overshadowed by discussions of higher education, the general issue of skills provision is nevertheless a crucial issue in the development and industrial strategy of any developing country. Education sector reform cannot omit attention to skills and the importance of skills development is stressed not only by educationists but also by many in Vietnam's industrial sector. As a recent United Nations Development Programme (UNDP) report on the Top 200 enterprises in Vietnam clearly demonstrates, large enterprises in Vietnam see the question of skills development as essential. The report states: “Without a large and sufficiently skilled workforce attempts to upgrade and achieve economies of scale would be fruitless” (Cheshier and Penrose 2007, p. 31).

Recent research by Dormeier-Freire and Vũ (2006) found problems affecting the skills development system (and the whole education and training sector) include poor quality of training, weak links to the labour market, inequalities of access across different regions and population segments, and corruption. Although political leaders have shown an increasing awareness of these problems, there remain large gaps between current skills development strategies and policies, on the one hand, and the needs of a modern economy and labour market on the other.