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Beneath red banners and a gold bust of revolutionary leader Ho Chi Minh in Hanoi’s central party school, Communist Party chief To Lam declared the arrival of a new era of development late last year. The speech was more than symbolic it signaled the launch of what could be Vietnams most ambitious economic overhaul in decades. Vietnam aims to get rich by 2045 and become Asias next tiger economy a term used to describe the earlier ascent of countries like South Korea and Taiwan. The challenge ahead is steep: Reconciling growth with overdue reforms, an aging population, climate risks and creaking institutions. There’s added pressure from President Donald Trump over Vietnams trade surplus with the U.S., a reflection of its astounding economic trajectory. In 1990, the average Vietnamese could afford about $1,200 worth of goods and services a year, adjusted for local prices. Today, that figure has risen by more than 13 times to $16,385. Vietnam’s transformation into a global manufacturing hub with shiny new highways, high-rise skylines and a booming middle class has lifted millions of its people from poverty, similar to China. But its low-cost, export-led boom is slowing and it faces a growing obstacle to its proposed reforms expanding private industries, strengthening social protections and investing in technology and green energy from climate change. Its all hands on deck. . . . We cant waste time anymore,” said Mimi Vu of the consultancy Raise Partners. The export boom cant carry Vietnam forever Investment has soared, driven partly by U.S.-China trade tensions, and the U.S. is now Vietnam’s biggest export market. Once-quiet suburbs have been replaced with industrial parks where trucks rumble through sprawling logistics hubs that serve global brands. Vietnam ran a $123.5 billion trade surplus with the U.S. trade in 2024, angering Trump, who threatened a 46% U.S. import tax on Vietnamese goods. The two sides appear to have settled on a 20% levy, and twice that for goods suspected of being transshipped, or routed through Vietnam to avoid U.S. trade restrictions. During negotiations with the Trump administration, Vietnam’s focus was on its tariffs compared to those of its neighbors and competitors, said Daniel Kritenbrink, a former U.S. ambassador to Vietnam. As long as theyre in the same zone, in the same ballpark, I think Vietnam can live with that outcome,” he said. But he added questions remain over how much Chinese content in those exports might be too much and how such goods will be taxed. Vietnam was preparing to shift its economic policies even before Trump’s tariffs threatened its model of churning out low-cost exports for the world, aware of what economists call the middle-income trap, when economies tend to plateau without major reforms. To move beyond that, South Korea bet on electronics, Taiwan on semiconductors, and Singapore on finance, said Richard McClellan, founder of the consultancy RMAC Advisory. But Vietnam’s economy today is more diverse and complex than those countries were at the time and it cant rely on just one winning sector to drive long-term growth and stay competitive as wages rise and cheap labor is no longer its main advantage. It needs to make multiple big bets, McClellan said. Vietnam’s game plan Following China’s lead, Vietnam is counting on high-tech sectors like computer chips, artificial intelligence and renewable energy, providing strategic tax breaks and research support in cities like Hanoi, Ho Chi Minh City, and Danang. It’s also investing heavily in infrastructure, including civilian nuclear plants and a $67 billion NorthSouth high-speed railway, that will cut travel time from Hanoi to Ho Chi Minh City to eight hours. Vietnam also aspires to become a global financial center. The government plans two special financial centers, in bustling Ho Chi Minh City and in the seaside resort city of Danang, with simplified rules to attract foreign investors, tax breaks, support for financial tech startups, and easier ways to settle business disputes. Underpinning all of this is institutional reform. Ministries are being merged, low-level bureaucracies have been eliminated and Vietnam’s 63 provinces will be consolidated into 34 to build regional centers with deeper talent pools. Private business to take the lead Vietnam is counting on private businesses to lead its new economic push a seismic shift from the past. In May, the Communist Party passed Resolution 68. It calls private businesses the most important force in the economy, pledging to break away from domination by state-owned and foreign companies. So far, large multinationals have powered Vietnam’s exports, using imported materials and parts and low cost local labor. Local companies are stuck at the low-end of supply chains, struggling to access loans and markets that favored the 700-odd state-owned giants, from colonial-era beer factories with arched windows to unfashionable state-run shops that few customers bother to enter. The private sector remains heavily constrained,” said Nguyen Khac Giang of Singapores ISEASYusof Ishak Institute. Again emulating China, Vietnam wants national champions to drive innovation and compete globally, not by picking winners, but by letting markets decide. The policy includes easier loans for companies investing in new technology, priority in government contracts for those meeting innovation goals, and help for firms looking to expand overseas. Even mega-projects like the North-South High-Speed Rail, once reserved for state-run giants, are now open to private bidding. By 2030, Vietnam hopes to elevate at least 20 private firms to a global scale. But Giang warned that there will be pushback from conservatives in the Communist Party and from those who benefit from state-owned firms. A Closing Window from climate change Even as political resistance threatens to stall reforms, climate threats require urgent action. After losing a major investor over flood risks, Bruno Jaspaert knew something had to change. His firm, DEEP C Industrial Zones, houses more than 150 factories across northern Vietnam. So it hired a consultancy to redesign flood resilience plans. Climate risk is becoming its own kind of market regulation, forcing businesses to plan better, build smarter, and adapt faster. If the whole world will decide its a priority…it can go very fast, said Jaspaert. When Typhoon Yagi hit last year, causing $1.6 billion in damage, knocking 0.15% off Vietnams GDP and battering factories that produce nearly half the countrys economic output, roads in DEEP C industrial parks stayed dry. Climate risks are no longer theoretical: If Vietnam doesnt take strong action to adapt to and reduce climat change, the country could lose 1214.5% of its GDP each year by 2050, and up to one million people could fall into extreme poverty by 2030, according to the World Bank. Meanwhile, Vietnam is growing old before it gets rich. The countrys golden population window when working-age people outnumber dependents will close by 2039 and the labor force is projected to peak just three years later. That could shrink productivity and strain social services, especially since families and women in particular are the default caregivers, said Teerawichitchainan Bussarawan of the Centre for Family and Population Research at the National University of Singapore. Vietnam is racing to pre-empt the fallout by expanding access to preventive healthcare so older adults remain healthier and more independent. Gradually raising the retirement age and drawing more women into the formal workforce would help offset labor gaps and promote “healthy aging, Bussarawan said. ___ The Associated Press climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org Aniruddha Ghosal, Associated Press
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How did you react to the August 7 release of GPT-5, OpenAIs latest version of ChatGPT? The company behind the model heralded it as a world-changing development, with weeks of hype and a glitzy livestreamed unveiling of its capabilities. Social media users reactions were more muted, marked by confusion and anger at the removal of many key models people had grown attached to. In the aftermath, CEO Sam Altman unwittingly revealed why the gulf between OpenAIs expectations for GPT-5s reception and the reality was so wide. It turns out that large numbers of us arent using AI to its fullest extent. In a post on X explaining why OpenAI appeared to be bilking fee-paying Plus users (full disclosure: that includes me)who hand over $20 per month to access the second-highest tier of the modelby drastically reducing their rate limits to the chatbot, Altman revealed that just 1% of nonpaying users queried a reasoning model like o3 before GPT-5s release. Among paying users, only 7% did. Reasoning models are those that think through problems before answering them (though we should never remove those air quotes: AI models are not human, and do not act as humans do). Not using themas was the case with the overwhelming majority of users, paying and nonpaying alikeis like buying a car, using only first and second gear, and wondering why its not easy to drive, or going on a quiz show and blurting out the first thing that comes to mind for every question. Many users prioritize speed and convenience over quality in AI chatbot interactions. Thats why so many lamented the loss of GPT-4o, a legacy model that was later restored to paying ChatGPT users after a concerted campaign. But when youre querying a chatbot for answers, you want good ones. Its better to be a little slowerand often it is only a littleand right than quick and completely wrong. Reasoning models are built to spend more computational effort planning, checking, and iterating before answering. This extra deliberation improves results on tasks where getting the logic right matters. But its slower and costlier, which is why providers tend to offer the non-thinky versions first and require users to opt in via a drop-down box for alternatives. Then theres OpenAIs previously impenetrable habit of naming modelsa problem GPT-5 attempted to fix, not altogether successfully. Users still cant easily tell whether theyre getting the good thinky GPT-5 or the less-capable version. After receiving complaints, the company is now tweaking that. To me, waiting a minute rather than a second isnt an issue. You set an AI model off and do something else while you wait. But evidently, its a wait too long for some. Even after GPT-5s releasewhere the difference between flagship model GPT-5 and GPT-5 thinking, which offers to get more thorough answers, is more obviousonly one in four paying users are asking for thoroughness. This quickly tossed-out data answers one big question I had about AI adoption: Why do only a third of Americans who have ever used a chatbot say its extremely or very useful (half the rate among AI experts) and one in five say its not useful at all (twice the rate among experts)? The answer is clearer now: Most folks are using AI wrong. Theyre asking a chatbot to handle tough, multipart questions without pausing for thought or breath. Theyre blurting out What is macaroni cheese on The Price is Right and $42 on Jeopardy! So if youre going to try a chatbot, take advantage of OpenAIs moves to keep users from canceling their subscriptions by opening up more access to models. Set them thinking while remembering theyre not actually doing thatand see if you stick around. Its the right way to use generative AI.
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Every generation blames the one before, and all of their frustrations come beating on your door. Thus begins the ’80s hit Living Years by Mike & the Mechanics, but when it comes to the workplace, Gen-Z could fairly say it’s talking about their generation. The newest entrants to the workforce are of an age cohort so different, so angry at their elders, that theyre shunning the 9-to-5 grind and upending traditional workplace norms. A new report explores the generational difference further and brands Gen-Z workers with a surprising new label for a truly digital-first group that lives life online: Theyre the toolbelt generation. This label came about because of younger workers’ huge swing toward learning highly specialized blue-collar jobs, according to news site University Business. These jobs typically center around unique skill sets, like being able to weld or work with wood, or even computer programming. And to learn these skills, the news outlet notes that Gen-Z workers are shunning more traditional higher education routes, and looking at alternative options: Data shows that interest in going to trade schools has nearly doubled among teens and adults since 2017, mostly driven by Gen-Zers, although older people are also showing similar interest. The report digs into why Gen-Z is leading this trend, and suggests the top three reasons are reduced confidence in higher education, a desire for financial freedom, and an indication that trades complement Gen-Zs focus on mental health. This tallies with plenty of other data, including a general mistrust of the education system and rising college degree prices. At work, it’s reflected in the unbossing trend that’s seeing many Gen-Z workers’ preference for just turning up at work and shunning promotions or additional responsibilities to better maintain their work-life balance. It also notes that financial freedom, better mental health, and the lack of a 9-to-5 grind may be more compatible with trade work than white-collar office roles. Add the economic problems foisted upon Gen-Z by Baby Boomers hanging onto their homes for much longer, an increased gap between wages and the cost of living, and Gen-Zs hyperawareness of alternative ways of thinking and fresh points of view thanks to its social media use, and you have a potent recipe for a generational workplace shift. University Business, reporting from an education point of view, quotes Tracy Lorenz, president of the for-profit Universal Technical Institute, an outfit that operates in 16 campuses across nine states and which offers technical, field-focused courses. In 2025, interest in skilled trades will continue to accelerate among young Gen-Z, who increasingly view these careers as a more practical and rewarding alternative to traditional career paths, Lorenz predicted. She also added another motivator for Gen-Zers, who are used to fast-paced online lives: For a growing number, the skilled trades may offer a faster path to a career that aligns with their interests and goals. There may be another driver for Gen-Zers interest in pursuing jobs that require they work with their hands: AI. As time passes and this innovative technology improves, offering more potent powers with each new tool on the market, it’s clear that AI is capable of doing the work of many entry-level office workers, which may thwart more traditional bottom-up career planning, starting with internships and learning on the job. Gen-Z, as the age cohort now entering the workplace, is most at risk from AI’s short-term impact on entry-level jobs. Indeed, Gen-Zers are so worried about AI that they’re even pretending to be busy at work, a.k.a. task masking, just so that they don’t get the chop in favor of an AI tool. Perceptions of the AI threat may swing young peoples interest toward different careers, especially since (at least for now) robotics arent advanced enough that AI can take on some of the kind of detailed physical work that a skilled human tradesperson can carry out. For example, precise robot welding machines have been used in car factories for decades, but a robot wouldnt be able to go to your house and weld an artistic, hand-designed new front gate. Why should you care about this cultural change? For one main reason: If youre trying to hire young workers in hopes of benefiting from their fresh thinking, you may find it harder to pique the toolbelt generations interest in coming to work for you, unless you can offer some of the same flexibile duties and freedom of expression that a trade can offer over a more narrowly defined white-collar office role. By Kit Eaton This article originally appeared on Fast Company’s sister publication, Inc. Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
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