Since the mid-1980s, when Vietnam introduced reform and openingup policies, it has accomplished the transition to a market economy and stable growth by successfully attracting foreign investment. On the other hand, there are various threat factors that weaken the foundation of sustainable growth, such as low domestic investment ratio, insufficient overall management and production capacity of private enterprises, high social cost for business activities, weak forward and backward linkages, and continued reliance on China. Considering these points, this study focuses on finding out what strategies Korea should take in the three areas of ODA to Vietnam:SMEs, industry clusters, and export-oriented industrialization.

First of all, Chapter2 analyzes the strategy of Korea ODA to SMEs in Vietnam. The Vietnamese government has made considerable efforts to establish various policies to foster SMEs through the first SME development plan for 2006~2010 and the second SME development plan for 2011~2015. However, it is difficult to judge that the Vietnamese government’s efforts have achieved great results when we look at the results of recent surveys on SMEs. The most important reason is that Vietnamese SMEs failed to enjoy the benefits from technology transfer due to lack of absorptive capacity to assimilate the technology of Korean companies in Vietnam.

Based on these analyzes, the policy proposals for ODA strategies related to the development of SMEs in Vietnam are as follows. First, a closer examination of coordination and harmonization in aid activities among ODA donors to Vietnam should be preceded. In particular, the major activities of Korea and Japan ODA to Vietnamese SMEs are concentrated in vocational education in university and etc. Therefore, it is necessary to prepare a joint program between Korea and Japan for this field.

Second, given the fact that Vietnam’s economy will depend on the business activities of foreign-invested companies for a considerable period of time, an ODA program should be set up to foster SMEs in consideration of such specificity.

Third, ODA programs for financial constraints should be prepared because Vietnamese SMEs perceive them as the biggest constraints.

Chapter3 deals with strategies to support industry clusters in Vietnam. The main analyzes are as follows. First, as many industry cluster projects are being carried out, specialized industry clusters according to the region have not been developed systematically. Instead, industry clusters are being created competitively to attract foreign investment and stimulate local economy.

Second, innovative clusters are becoming more important as universities, research institutes and companies collaborate to carry out technology development and innovation activities. However, the industry clusters of Vietnam are centered on traditional ones for the purpose of attracting companies only.

Third, various environmental problems are exacerbated by the excessive number of IZ and the rapid increase of companies. According to an interview with the Ministry of Industry and Trade in Vietnam, Vietnam Academy of Social Science and etc, only 15% of industry clusters are constructing wastewater treatment facilities.

Based on this analysis, Chapter3 suggests the following policy recommendations. First, the policy advisory group can be considered. It is expected that a positive effect will be achieved if policy advice is made on the establishment of a cluster project for strengthening corporate innovation capacity in ODA cooperation with Vietnam.

Second, it supports education and training ODA. It is necessary to organize a human resource development program that invites Vietnamese employees to Korea for short-term technical education or to operate educational programs related to the electronics industries in Hanoi and Ho Chi Minh, where many Korean companies have advanced.

Third, it is also necessary to consider ODA projects to support establishment of facilities. Considering the policy demand of the Vietnamese government, which is aiming at a Technology-Intensive cluster from a simple production base, it will be necessary to expand programs to support the construction of public research institutes related to major industries in Vietnam.

Finally, Chapter 4 deals with Korea’s export-oriented industrialization strategies to Vietnam. The main analysis contents are as follows. Since the introduction of reform and opening-up policies in Vietnam, the foreign sector has been rapidly expanding, centered on trade in goods. Among Vietnam’s total exports, the share of manufacturing has increased rapidly from 49.8% in 2005 to 78.5% in 2016. Among them, exports of high-tech electrical and electronic parts and parts have been increasing significantly. In addition, Vietnam’s trade structure is highly correlated with the production activities of local FDI firms based on the global value chain.

Considering these situations in Vietnam, we will be able to take the following points into account when establishing export-oriented industrialization strategies and programs. First, it is reasonable to focus mainly on indirect support for the product groups that Vietnam already has a comparative advantage among export goods. For example, indirect support is provided to improve transportation and energy infrastructure, and to develope advanced human resources. On the other hand, it is necessary for the products which are at a comparative disadvantage to analyze the constraints of exportoriented industrialization more specifically. It would also desirable to establish and implement a support program focusing on them.

Second, it is necessary to design and implement a support program that focuses on major constraints in Vietnam's export. For instance, major constraints are as follows: low industrial productivity, insufficient protection of private property rights, weak forward and backward linkages, and lack of information on overseas markets and demand.

Third, as a result of the product space analysis, the following products can be identified as promising export items in Vietnam, so we can consider supporting them as main product groups: steel products(ex. steel structures), processed wood, aluminum products, plastic products, boiler products, and electric motor parts.

Fourth, as the cases of major assistance in Vietnam shown in this paper, the following areas are important for success: responsibility of donors, the interest of local development partners, willingness to make policies, the effectiveness of policy coordination and enforcement, and the involvement of the private sector.