Flexibility to adapt to the volatile business environment

Enterprises need to have innovations and creativity to proactively adapt to the continuous fluctuations of the market. Photo: Internet

Therefore, it is predicted that the world economy is experiencing instability.

Unstable and volatile

The Covid-19 pandemic is slowly passing, but the outbreak of military tensions between Russia and Ukraine has pushed the world into new crises. In 2022, the world economy is immersed in escalating inflation; tighten monetary policy, real estate and stock markets fluctuation.

These problems are still lingering. As many forecasts, it is not until the second half of 2023, even the beginning of 2024, that there will be signs of recovery.

For domestic enterprises, after a long period of supply chain interruption due to epidemics, uncertainties and political tensions, it is now affected by a decrease in consumer demand due to inflation, raw material and logistics prices, which negatively affected import and export activities and decreased orders sharply.

Although Vietnam still had a trade surplus of 4.07 billion USD in the first quarter of the year, the export and import turnover of goods are decreasing by 11.9% and 14.7%, respectively.

In addition, more severe conditions in trade and production due to the introduction of many modern technologies have affected competitiveness.

For example, at the beginning of this year, the emergence of ChatGPT - an artificial intelligence (AI) chatbot brought opportunities for innovation but also created challenges that forced businesses to pay more attention and investment in technology. On the other hand, the issues of sustainable growth, green growth, and economic circulation are also increasingly concerning, even a mandatory requirement when cooperating and trading with foreign partners.

Fix and adapt

In the above circumstances, businesses need to find new directions to ensure growth in the current context.

According to the Global Innovation Index (GII) Report 2022 of the World Intellectual Property Organization (WIPO), Vietnam currently ranks 48th out of 132 economies in terms of innovation capacity and takes third in Southeast Asia, after Singapore and Thailand. Vietnam is also one of the three middle-income economies with the fastest growth rate of innovation performance to date. Talking at the recent forum on corporate repositioning for sustainable development, according to Ms. Lam Thuy Nga, National Director of Large Corporate Banking, HSBC Vietnam, internally, Vietnam bears a high spirit of innovation, which can be the driving force for enterprises to improve their production and business activities in order to enhance their economic capacity.

Talking about the adaptation to green growth, a representative of HSBC Vietnam said that many domestic corporate customers have developed strategies and quickly moved towards more sustainable production and business activities. Some enterprises have completely changed their operation orientation, pursuing the goal of green production; meanwhile, some enterprises have boldly invested in advanced equipment to build a circular economy model.

Sharing about the current situation of enterprises in the wood industry, Mr. Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association, said that wood products related to forests and trees should be constantly being “reviewed" in terms of raw materials. In fact, Vietnamese wood products have to borrow foreign brands for export even though Vietnam is a large wood exporter. Another big challenge, according to Mr. Hoai, is that businesses have been relying too much on the US market.

Therefore, Mr. Ngo Sy Hoai said, to overcome the weaknesses and inadequacies, wood industry enterprises need to build a chain of links in depth from businesses; renew technological equipment in the direction of green economy and green trade. Moreover, it is necessary to strengthen the accountability of wood processing in the direction of a circular economy, ensure traceability; strengthen design capacity, build Vietnamese wood brand; and promote e-commerce market diversification.

​Also on this issue, Mr. Than Duc Viet, Director of Garment 10 Joint Stock Company added, in spite of the company’s stable position in the domestic and export markets, without renovation and flexibility, this company will be unable to adapt to the current context. With the export market, May 10 must find a way to expand to new markets such as Africa, the Middle East besides the traditional markets. At the same time, the company also has to change production technology, such as using raw materials and accessories to ensure green production criteria.

According to experts, Vietnam needs to build an environment in which the Government has specific guidelines and orientations to help businesses, especially small and medium-sized ones, realize the importance of repositioning business operations through innovation, to seize new opportunities promptly.

Enterprises must actively learn from sharing activities in the business community, from domestic and international consulting organizations, the world's business and investment trends, and new requirements of consumers, advanced technologies to flexibly apply to business activities in order to improve labor productivity, quality, and the added value of products and services.