Readiness for Open Innovation in the Transition to Sustainable Energy: Evidence from Vietnam’s Electricity Sector

2.1 Policy basis for open innovation in the Vietnamese electricity sector

Open innovation is an approach to innovation management that emphasises enterprises’ exploitation, adoption and sharing of knowledge with external stakeholders to enhance innovation capacity and create new value. In Vietnam, no specific legal instrument currently regulates ‘open innovation in the electricity sector’. However, this approach can be applied through the intersection of three policy levels: national guidelines on science, technology, innovation, and digital transformation; the legal framework governing scientific, technological, and innovation activities; and policies for developing the electricity sector towards modernisation, smart systems, and sustainability.

At the strategic policy level, Resolution 57-NQ/TW of 22 December 2024 identifies science, technology, innovation and digital transformation as key drivers for developing modern productive forces, enhancing labour productivity and strengthening national competitiveness. The Resolution emphasises the need to build an innovation ecosystem and foster collaboration between the State, businesses, research institutes, universities and scientific and technological organisations. Although it does not directly refer to open innovation, these guidelines align with the core spirit of the open innovation model: expanding cooperation, mobilising external knowledge, and promoting innovation through connections within the ecosystem [3].

At the legal level, the Law on Science, Technology and Innovation No. 93/2025/QH15 establishes a framework for research activities, technology transfer, the commercialisation of research outcomes and the development of the science and technology market. The Law also encourages collaboration between businesses and research institutes, universities and innovation organisations both domestically and internationally. This constitutes an important legal basis for enterprises in the electricity sector to implement technological cooperation, knowledge management, human resource development and the innovation of governance models [13].

At the sectoral policy level, Decision 500/QĐ-TTg on the 8th Power Development Master Plan [1] and Decision 768/QĐ-TTg amending the 8th Power Development Master Plan [2] set out a direction for modernising the electricity system through the development of renewable energy, smart grids, energy storage, and digital transformation in electricity dispatch, operations and business management, whilst also researching new technologies such as hydrogen, ammonia, battery energy storage systems (BESS) and high-voltage direct current (HVDC). These directions expand the scope for open innovation between electricity companies and technology partners, financial institutions, research institutes and international enterprises.

Thus, open innovation in the electricity sector does not stem from a specific legal document, but is shaped by a combination of national strategic directions, the legal framework for innovation, and the requirements for modernising the electricity sector. This forms the basis for analysing EVN’s readiness for open innovation through digital transformation, technological collaboration, human resource development and governance modernisation, as outlined in its annual report.

Table 1 shows that open innovation in Vietnam’s electricity sector is not regulated by a separate legal document, but has emerged from the intersection of three levels of policy: Resolution No. 57-NQ/TW on science, technology, innovation and digital transformation; the Law on Science, Technology and Innovation 2025; and Power Development Plan VIII (PDP8) and its amendments. Of these, Resolution 57-NQ/TW establishes the national strategic direction; the Law on Science, Technology and Innovation provides the legal framework for research, technology transfer and innovation cooperation; whilst the 8th Power Development Plan sets out the requirements for modernising the electricity sector through the development of smart grids, renewable energy, energy storage and digital transformation. Against this backdrop, EVN’s annual reports reflect its implementation of these policy directions through digital transformation, technological cooperation, human resource development, and governance modernisation. Therefore, within the scope of this study, open innovation is approached as an academic analytical framework to assess EVN’s readiness, rather than as an established legal concept. Based on the policy framework detailed in Table 1, Table 2 presents a comparative analysis that aligns the requirements of Resolution 57 with EVN’s activities, thereby examining how these policy mandates are reflected in the organization’s operational practices.

Table 1. Policy framework for the development of open innovation in the Vietnamese electricity sector

Table 2. Comparison between the requirements of Resolution 57 and EVN’s activities

2.2 Open innovation in the electricity sector

Open innovation is the process by which a business combines and utilises internal and external knowledge sources to drive innovation in products, services, processes, and business models. According to Chesbrough’s approach [14], enterprises must not only rely on internal research and development (R&D) activities but also collaborate with universities, research institutes, technology firms, international organisations, customers, and partners within the innovation ecosystem to absorb, share, and co-develop knowledge. Expanding the theoretical framework, Dubickis and Gaile-Sarkane [15] and Ryszko and Szafraniec [16] classify open innovation into three streams: Inbound (acquiring knowledge or technology from external sources), Outbound (transferring or licensing out intellectual property), and Coupled (collaborative co-creation across the entire ecosystem).

For businesses in the electricity sector, open innovation is particularly significant because this essential infrastructure sector is highly technology-intensive, requires substantial capital investment, and is significantly affected by the energy transition [17, 18]. Challenges such as developing renewable energy, modernising the electricity grid, ensuring energy security, reducing emissions, and improving customer service often exceed a single enterprise's capacity to address them. Recent international studies indicate that major global power companies are shifting from traditional R&D models to open innovation to mitigate financial risks and accelerate the adoption of clean technologies amid the current rapid energy transition [19]. Notably, research on the utility company Iberdrola shows that integrating innovation into sustainable development strategies significantly improves corporate technical efficiency [20]. Furthermore, the success of open innovation within power companies depends heavily on the alignment between internal digital infrastructure and industry-specific policies [21]. Consequently, electricity companies need to collaborate with regulatory bodies, research institutes, universities, technology companies, financial institutions and international partners to access external knowledge, technology and management expertise [18].

Within the electricity sector, open innovation can be identified through several key manifestations. Firstly, the adoption and application of new technologies such as AI, BIM, UAVs, Smart Grids, BESS and HVDC [22]. Secondly, expanding international and technological cooperation through mechanisms such as the JETP, the IAEA, ASEAN, the GMS and regional energy cooperation networks [23]. Thirdly, it involves co-developing solutions with technology companies, equipment suppliers, consultancy firms, and research organisations in digital transformation, smart grids, big data, clean energy, and digital governance platforms [19]. Fourthly, it involves building capacity to absorb knowledge through e-learning, specialist training, technical staff exchanges, and collaborative training programmes.

The value of open innovation lies not only in adopting technology or expanding cooperation, but also in transforming knowledge into concrete operational outcomes. In the electricity sector, these outcomes can be reflected indirectly through improved electricity supply reliability, reductions in SAIDI, SAIFI, and electricity losses, optimised system operations, enhanced asset utilisation efficiency, and the digitalisation of customer services. From the perspective of organisational digital readiness and absorptive capacity [24, 25], technical operational metrics (SAIDI, SAIFI, MAIFI, and power loss rates) do not serve as direct measures of the outcomes of external open innovation collaborations; rather, they act as empirical proxies reflecting the state of technical infrastructure readiness and internal digital absorptive capacity. Electric utility companies must achieve a certain threshold of grid automation and basic operational stability before they can effectively adopt and integrate complex external open technology solutions [20]. Therefore, this study analyses open innovation at EVN through foundational conditions, including digital transformation, open collaboration, knowledge management, governance modernisation, and observable operational outcomes drawn from the annual report.

Table 3 shows that EVN's readiness for open innovation is not measured by a single indicator, but is identified through the simultaneous development of foundational conditions related to digital technology, open collaboration, knowledge governance, governance modernisation, and operational outcomes. These conditions form the basis for EVN to absorb, share and utilise external knowledge, thereby driving the innovation process within the electricity sector.

On this basis, within the scope of this paper, EVN’s readiness for open innovation is examined through four groups of foundational conditions, namely: (i) digital transformation and technology adoption; (ii) technological collaboration and international cooperation; (iii) human resource development and knowledge management; and (iv) governance modernisation alongside business process and customer service innovation. These groups of conditions form the basis for analysing data from EVN’s annual reports in the following sections.

Table 3. Foundational conditions and observable evidence of open innovation at EVN

2.3 Theoretical mechanism model

To establish a robust theoretical chain linking foundational conditions to open innovation outcomes, this study proposes a transmission mechanism model (Figure 2). The analytical framework examines causal relationships. Four pillars—governance and policy, digital infrastructure, organisational capabilities, and ecosystem networks—directly influence and foster both absorptive capacity and intellectual property governance mechanisms at the enterprise level. These intermediate capabilities, in turn, drive open innovation behaviours. Ultimately, these behaviours enhance reliability and operational efficiency metrics for enterprises within the power sector.

Figure 2 illustrates a comprehensive theoretical framework governing open innovation readiness in the power sector. This model reflects cause-and-effect relationships across four stages, drawing upon open innovation theory [14, 29, 30] and research on absorptive capacity [31]. Initially, input factors lay the foundation for readiness, comprising four structural pillars (Governance & Policy, Digital Infrastructure, Organisational Capabilities, and Ecosystem Networks) that establish necessary organisational prerequisites. These inputs directly influence mediating mechanisms, such as firm-level absorptive capacity, intellectual property governance frameworks, and data-sharing processes. Once activated, these capabilities facilitate three operational modes within the open innovation process: sourcing knowledge inputs, transferring technology outputs, and co-creation. Ultimately, these open innovation activities drive operational performance, evidenced by measurable improvements in operational reliability (metrics such as SAIDI, SAIFI, and grid loss rates) and support for the long-term sustainable energy transition.

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Figure 2. Transmission mechanism model

2.4 Theoretical link between open innovation readiness and operational metrics in the electric power industry

According to Open Innovation theory [14, 25], enterprises seeking to survive in today’s volatile and rapidly evolving technological landscape cannot rely solely on internal R&D resources; they must also actively leverage internal and external knowledge flows to drive innovation. However, the successful adoption and application of open technological knowledge depend heavily on an organization's absorptive capacity and the readiness of its digital infrastructure [20, 25].

In the specialised electric power sector, a corporation cannot effectively absorb or integrate complex external open technology solutions if its internal technical infrastructure is rudimentary, outdated, and prone to frequent failures that disrupt power supply. Consequently, stabilising the system and minimising power supply interruption metrics (SAIDI, SAIFI) serve as prerequisites. A trend of continuous improvement in these operational metrics demonstrates that the enterprise has established the necessary technical foundation and digital infrastructure, thereby creating a favourable environment for adopting, piloting, and commercialising open innovation solutions from ecosystem partners [20, 25].

4.1 Evidence of digital transformation

An analysis of EVN’s annual reports reveals that digital transformation is a key technical enabler for open innovation. In the electricity sector, the ability to absorb, integrate, and utilise external knowledge and technology depends heavily on data infrastructure, digital platforms, connectivity systems, and information-processing capabilities. EVN has implemented a roadmap to become a digital enterprise by digitising numerous management, operational and business processes within the electricity sector. Reports for the 2024–2025 period highlight numerous applications such as UAVs, BIM, digital signatures, electronic construction logs, EVNConnect, document management systems, digital reporting, electronic invoicing, data standardisation, AI applications and enhanced cybersecurity. These tools improve internal governance efficiency while laying the foundation for data sharing and coordination across the entire group. By mid-2025, EVN announced that over 99 per cent of transactions were carried out electronically and that smart meter penetration had exceeded 95 per cent. This demonstrates that digital transformation has expanded from internal administration to business operations and customer service. Smart meters also facilitate the collection of electricity consumption data, support load management, enable the development of smart energy services and lay the foundations for a smart grid.

From an open innovation perspective, this evidence suggests that EVN has established several technical conditions for adopting and applying external knowledge and technology. However, these data merely reflect the extent of technology deployment and process digitalisation; they are not sufficient to draw direct conclusions about the effectiveness of open innovation. Therefore, within the scope of this paper, digital transformation is treated as a foundational condition rather than conclusive evidence of open innovation outcomes.

4.2 Evidence of open collaboration

Alongside digital transformation, open collaboration is a key factor enabling EVN to access external knowledge, technology and resources to support the modernisation of the electricity sector. Against the backdrop of the energy transition, the requirements for smart grids, emissions reduction, energy security, and new technologies exceed the capabilities of a single enterprise, requiring EVN to expand its cooperation with international organisations, technology companies, regulatory bodies, and regional cooperation networks.

An analysis of the annual report for the 2024–2025 period shows that EVN has expanded its cooperation across numerous fields, including the energy transition, digital transformation, AI, hydrogen, ammonia, BESS, smart grids, HVDC transmission and nuclear power. At the same time, EVN actively participates in international cooperation mechanisms such as the JETP, the IAEA, ASEAN, the GMS, and HAPUA to access technology, technical standards, governance expertise, and financial resources to support electricity system modernisation. Notably, the collaboration with the IAEA on training human resources for the nuclear power sector shows that open cooperation extends beyond technology transfer to long-term capacity building through knowledge acquisition, technical standards, and international expertise. From an open innovation perspective, these collaborative activities reflect EVN’s trend of gradually expanding its network of connections within the innovation ecosystem to enhance technological capabilities and support the energy transition.

However, annual reports primarily document the existence of collaborative activities without providing sufficient information on mechanisms for joint technology development, knowledge sharing or the specific outcomes of individual cooperation programmes. Therefore, this study treats open collaboration as a foundational condition for open innovation, rather than direct evidence of the innovation process's effectiveness.

4.3 Evidence on knowledge management and human resource development

An analysis of EVN’s annual reports reveals that human resource development and knowledge management are key pillars in the enterprise’s modernisation process. Alongside technological investment, EVN prioritises building learning capacity through training, knowledge sharing, and developing a team of experts to enhance its ability to adopt, adapt to, and apply new technologies.

For 2024–2025, the annual reports document numerous activities, such as developing an online training system, specialist training, standardising training programmes, collaborating with educational institutions and international organisations, exchanging technical experts, and building capacity for management and technical staff. In particular, preparing human resources for the Ninh Thuận 1 Nuclear Power Project, with support from the IAEA and international partners, shows that EVN is absorbing external knowledge, technical standards, and management experience to build in-house capabilities to support new technologies. From an open innovation perspective, knowledge management bridges external knowledge and internal innovation capacity. Collaborative training activities, expert exchanges and the standardisation of competencies help EVN enhance its capacity for knowledge absorption, creating conditions for knowledge and technology to be received, transformed and applied to management and operations, as well as to the development of new solutions.

However, the currently available data primarily reflects the scale and direction of training programmes and does not provide sufficient indicators to assess effectiveness, such as the extent of knowledge transfer, learners’ capacity to absorb knowledge, or the impact of training on innovation outcomes. Therefore, within the scope of this paper, these activities are regarded as evidence of establishing a knowledge management framework, but do not yet constitute direct evidence of the effectiveness of open innovation.

4.4 Evidence of governance modernisation

An analysis of EVN’s annual reports shows that governance modernisation is a key organisational condition supporting open innovation. Alongside digital transformation, technological collaboration, and human resource development, EVN has implemented numerous activities to reform its governance model, enhance operational efficiency, and create a more conducive environment for adopting, coordinating, and implementing innovative ideas. For 2024–2025, the annual reports note that EVN will continue to restructure the organisation, strengthen decentralisation and devolution of authority linked to accountability, promote information transparency, and gradually adopt corporate governance principles in line with OECD best practice. At the same time, EVN is accelerating digital transformation in governance, standardising operational processes, digitising management activities, and developing a corporate culture that builds a professional, unified working environment better adapted to the demands of the innovation process. From an open innovation perspective, modernising governance helps EVN improve coordination between internal units and expand connections with external stakeholders within the innovation ecosystem. A transparent governance system, with clear mechanisms, flexible coordination processes, and an organisational culture that encourages learning, will create favourable conditions for the organisation to absorb knowledge, test new solutions, and implement technology cooperation programmes.

However, annual reports primarily reflect policies and governance activities already implemented; they do not provide sufficient direct indicators of the extent of cultural change towards innovation, the level of cross-unit collaboration, or the effectiveness of new governance mechanisms. Therefore, within the scope of this paper, governance modernisation is treated as evidence of establishing organisational conditions that support open innovation, but not as direct evidence of innovation effectiveness.

4.5 Comparison with operational and service outcomes

Operational indicators show that EVN has demonstrated a clear trend toward improved reliability in electricity supply and technical efficiency during 2015–2024. The SAIDI index fell from 2,281 minutes per customer in 2015 to 648.5 minutes in 2019 and is projected to continue falling to 220.36 minutes in 2024. The SAIFI index fell from 13.36 times per customer in 2015 to 2.13 times per customer in 2024. The electricity loss rate also fell from 7.94 per cent in 2015 to 6.16 per cent in 2024. These results show that EVN’s operational modernisation has significantly improved electricity supply quality and technical efficiency.

These improvements can be attributed to EVN’s efforts to accelerate the adoption of digital technology and modernise its operational methods. The 2019 report shows that EVN commissioned 57 control centres and implemented remote control of 625 unmanned 110–220 kV substations, accounting for 75.6 per cent of the total. Furthermore, EVN is progressively adopting UAVs, surveillance cameras and operational data analysis in the management, maintenance, repair and monitoring of transmission lines. These activities reflect a shift from traditional operational methods towards data-driven operations, automation and modern monitoring technology.

Figure 3 illustrates trends in electricity loss rates and the SAIDI index from 2015–2025, showing changes in both electricity losses and the average duration of power supply interruptions. Meanwhile, Figure 4 presents the corresponding trends for the SAIFI and MAIFI indices, helping to identify and clarify the frequency of sustained and momentary power supply interruptions during the same period.

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While improvements in SAIDI, SAIFI, and power loss rates indicate a marked enhancement in EVN’s operational reliability, this article examines these results through the lens of theories of digital readiness and organisational absorptive capacity [25].

From an open innovation perspective, these operational outcomes do not directly measure open innovation behaviours such as the number of collaborative R&D projects with universities, intellectual property licensing agreements, or joint ventures within the ecosystem. Instead, they serve as significant empirical proxies. The transition from manual operations to automation, evidenced by 75.6% of 110–220 kV substations operating unmanned and the deployment of UAVs and AI-powered cameras, demonstrates EVN’s growing mastery of, and integration of, digital technology into its core systems. This provides empirical evidence of growing digital absorptive capacity and the readiness of technical infrastructure prerequisites for the enterprise to adopt, assimilate, and scale external innovation solutions.

However, the empirical analysis also identifies methodological boundaries: improvements in SAIDI, SAIFI, and power loss rates are influenced by various external factors, such as the scale of grid investment, weather conditions, the power generation mix, load profiles, and internal technical management policies. Therefore, these indicators are examined purely as indirect corroborating evidence of the trend toward platform modernisation, rather than as evidence demonstrating a direct causal relationship between open innovation and operational outcomes.