HANOI — Nguyen Van Duc graduated two years ago with a bachelor’s degree in economics from one of Vietnam’s best universities.
Today, he earns about $250 a month as a motorbike taxi driver in Hanoi.
Duc, whose parents took second jobs so he could be the only one of three children to attend college, is among thousands of Vietnamese college graduates who can’t land jobs in their chosen field, even though the nation’s unemployment rate is just 2.3%.
“In university, we only received heavy theoretical training and a lot of Ho Chi Minh’s ideology with communist party history,” the 25-year-old said.
While Vietnam’s schools equip students with basic skills for low-wage assembly-line work, its colleges and universities are failing to prepare youth for more complex work.
As wages rise and basic manufacturing leaves for less expensive countries, that may threaten the government’s ambition to attain middle-income status, defined by the World Bank as per capita income of more than $4,000, or almost twice the current rate.
“Countries that have been successful moving up to the next economic stage already had developed country levels of education when they were middle-income economies,” said Scott Rozelle, a Stanford University development economist.
“Countries that didn’t have that collapsed or became stuck in the middle-income trap.”
Singapore, South Korea and Taiwan developed high-quality colleges long before their economies needed a more educated work force, he said.
Conversely, economies such as Argentina, Brazil and Mexico slowed after reaching middle-income status — in part because of insufficient investments in education, Mr. Rozelle said.
College students frequently spend much of their first two years learning about revolutionary leader Ho Chi Minh, socialism and party history at the expense of critical thinking and other skills expected by employers.
The upshot: firms are reluctant to pay more for workers with degrees that often lack commensurate skills, says the Vietnam Chamber of Commerce and Industry.
The jobless rate among young people with university degrees is 17%.
“You have private and foreign companies arriving that want better skilled workers, quality managers and engineers,” said Nguyen Xuan Thanh, a senior fellow at the Harvard Kennedy School of Government in Ho Chi Minh City.
“The middle class is expanding. Vietnam families want better education. So the pressure is on the political system to deliver.”
More parents are now sending their children overseas to study in order to improve their work prospects.
The number of Vietnamese studying in Japan, including language schools, grew more than 12-fold in the six years to May 2016, reaching about 54,000, according to the Japan Student Services Organization.
Authorities acknowledge the challenge.
“The government is trying to improve the quality of training in college and university,” said Nguyen Minh Thuyet, who is overseeing the Ministry of Education’s new curriculum strategy.
“We need to overhaul their curricula to reduce training of impractical subjects,” Mr. Nguyen explained.
“But the progress is still very slow. Not much has been done.”
Vietnam has expanded the number of colleges and universities across the nation over the last decade to about 450.
The government plans to have 560,000 new students enter college and university in 2020, which will be about an eight percent increase over 10 years.
Despite the nation’s 97% literacy rate, just a third of Vietnam’s labor force had a high school degree last year, according to the Institute of Labor Science and Social Affairs.
At this stage of development, Vietnam has posted rapid expansion rates even with its low productivity record — the World Bank forecasts growth will exceed six percent until 2019.
But it remains miles behind regional peers when it comes to getting the most out of its work force.
The economy has one of the weakest industrial productivity levels in the Association of Southeast Asian Nations. Singapore’s is 26 times higher than Vietnam; Malaysia 6.5 times greater and Thailand and Philippines about 1.5 times.
There are some reasons for optimism.
Fulbright University Vietnam, the first independent and non-profit institution approved by the government that received initial funding from the US State Department, opens this fall, said Thuy Dam Bich, Fulbright’s president.
Marxism will be taught as it would in western universities — along with philosophers such as Hegel and Kant, she added.
Companies are also providing additional education to get workers up to speed. FPT Corp., the country’s largest listed telecom and technology company, has educational branches around the country for about 20,000 high school, college and university students. Intel Corp., which operates an assembly and test plant in Ho Chi Minh City, has committed to spending $22 million on several programs.
But for those stuck in the state system, education can be “a big waste of time and money,” said Luu Quang Tuan, deputy head of the Institute of Labour Science and Social Affairs.
“Many graduates lack critical skills such as teamwork and organizational skills to work in companies,” he said.
“It is also holding back the economy.” — Bloomberg