Nearly 65% of Businesses Lack Clarity on Global Value Chains
A survey by the Vietnam Chamber of Commerce and Industry (VCCI) reveals that many Vietnamese businesses lack clear direction when it comes to participating in global value chains, with nearly 65% unprepared and only over 15% having long-term comprehensive strategies. This is a concerning figure as Vietnam’s economy deepens its integration.
Joining global value chains offers not just market expansion opportunities but also serves as a true measure of Vietnamese private enterprises’ competitive capabilities.
According to VCCI, nearly 65% of businesses lack clarity about global value chains. Illustrative image: Nhu Y
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Several concerns have been raised as many Vietnamese private enterprises remain entangled in processing orders, unable to ascend to higher value tiers. A key reason for this is the lack of investment in core technologies and innovation.
Mr. Nguyen Dinh Thang, Chairman of the Board of Directors of Hong Co Technology Company, suggests that special policies are needed to encourage the development of core technologies, especially for “make in Vietnam” products. Without state investment and support, Vietnamese technology core products will struggle to survive and thrive.
Mr. Thang recommends special policies to incentivize high-tech enterprises, and the state should act as the largest customer, proactively placing orders for domestic technology products to create a “nurturing market” for this nascent industry.
While current policies allocate a percentage of GDP to science and technology, this funding has not effectively reached innovative startups, which are expected to be the nation’s innovation spearhead. The reasons lie in loopholes in the grant mechanism and criteria for capital access that do not align with the flexible and high-risk nature of entrepreneurship.
Businesses Need a New Mindset
In the global arena, Vietnamese businesses not only compete among themselves but also confront foreign enterprises that hold superior advantages in technology, capital, management, and distribution networks.
Dr. Nguyen Ba Hung, Chief Economist at the Asian Development Bank (ADB) in Vietnam, asserts that if Vietnamese businesses aim to “go global,” Vietnamese laws must also “go global” and align with international regulations. Enterprises cannot operate by their own rules when venturing into the world.
“When we joined the World Trade Organization (WTO) in 2007, we were anxious, but it was followed by a period of remarkable development. Thus, integrating international laws is necessary. Vietnamese businesses are dynamic and can adapt to new environments if given sufficient time and clear direction,” affirmed Mr. Hung.
According to the ADB expert, the driving force for the private sector’s development is a clear, transparent, and competitive policy environment. “This necessitates mechanisms to counter monopolies, combat commercial fraud, and protect consumers. These aspects are still relatively weak in Vietnam,” he pointed out.
The electronics sector accounts for a high proportion of export turnover, but the localization rate in the industry is only 5-10%. Photo: Nhu Y. |
To make a breakthrough, enterprises need to step out of their “comfort zone” and engage in stages that offer higher value-added returns.
Assoc. Prof. Dr. Ta Van Loi, Principal of the School of Business, Vietnam National University, suggests that Vietnamese businesses themselves need to undergo significant transformations, not just in terms of investing in modern machinery and equipment but also in adopting new management methods.
“Take the Japanese, for example. To manufacture a product, we need to ensure that workers at each position understand and embody the spirit of creating a perfect product. While we have management and administration, our methods are disjointed, and each person prioritizes their interests over the collective good. As a result, large corporations from demanding countries like Japan will not approve of Vietnamese businesses participating in their production chains,” analyzed Mr. Loi.
Along with business efforts, Mr. Loi emphasizes the need for technology transfer agreements over a certain period and agreements to procure domestic components and accessories to gradually enter new markets.
Viet Linh
– 05:30 29/05/2025
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