Private Sector - Pillar of Growth and Driver of National Innovation

Unlocking strength through important resolutions

After almost 40 years of Doi Moi (Renovation), Vietnam’s private sector has steadily grown in both scale and quality, becoming one of the most important forces in the socialist-oriented market economy. Today, it comprises about 1 million enterprises and more than 5 million household businesses, contributing roughly 50% of GDP, over 30% of total state budget revenue, and employing nearly 85% of the workforce. The sector has played an important role in driving innovation, improving labor productivity, enhancing national competitiveness, reducing poverty, and stabilizing society.

Leading private enterprises such as Vingroup, Truong Hai Auto Corporation (Thaco), Masan Group, Vietjet Aviation Joint Stock Company, FPT Corporation, BRG Group, and TH Group have grown strongly in Vietnam while also expanding into regional and global markets, showcasing the competitiveness of Vietnamese businesses.

However, the sector still faces barriers that constrain its growth. It has yet to break through in scale and competitiveness to meet the expectations of becoming the backbone of the national economy. Most enterprises remain micro, small, or medium-sized, with limited financial capacity and management expertise. Many still lack technological and innovation capabilities, while productivity and efficiency remain low. Strategic vision is often limited, and linkages with state-owned enterprises and foreign-invested companies are underdeveloped.

As the global economy undergoes profound transformation driven by green transition, digitalization, and deeper global integration, Vietnam is striving to accelerate institutional reforms, improve policies, and promote the role of the private sector. Comprehensive and practical policies are not only improving the business environment but also creating favorable conditions for sustainable development of enterprises and entrepreneurs in the new era.

In recent years, Vietnam has issued and implemented several important policies and resolutions to improve the business environment, foster private sector growth, and enhance national competitiveness.

Among them, Politburo Resolution 41-NQ/TW, dated October 10, 2023, on building and promoting the role of Vietnamese entrepreneurs in the new era, established an important political foundation for new mechanisms and policies. It has energized the business community, with updated and refined tasks and solutions aligned with current goals and context, fostering rapid and sustainable socio-economic development.

Following this, Politburo Resolution 68-NQ/TW on “Continuing to reform, develop, and enhance the effectiveness of the private sector in the new era” marked a strategic turning point. It affirmed the private sector as an important driver of the socialist-oriented market economy. Resolution 68 set out breakthrough directions and policies, including: improving institutions and policies to ensure a fair investment and business environment; developing large private conglomerates with regional and global competitiveness; promoting digital transformation, innovation, and productivity improvements; strengthening public-private partnerships (PPP); and supporting small and medium enterprises (SMEs) and startups in accessing credit, technology, and markets.

Top 100 sustainable enterprises are honored in Vietnam 2024 under the CSI program, initiated and developed by VBCSD-VCCI

In parallel, Politburo Resolution 57-NQ/TW on developing science, technology, and innovation to 2030 with a vision to 2045 has created opportunities for private firms to increase investment in research and the application of new technologies. This serves as a key for Vietnamese businesses to align with global trends and sharpen competitiveness in the era of Industry 4.0.

Other resolutions such as Resolution 29-NQ/TW on industrialization and modernization, and Resolution 23-NQ/TW on regional economic development also encourage deeper private sector participation in the nation’s development process.

Thanks to these strategic directions, Vietnam’s business environment has seen clear improvements. Administrative barriers have been substantially reduced, while procedures for investment and business registration, taxation, and customs have been simplified and made more transparent. The government’s push for digital transformation in public administration has helped enterprises cut time and costs, while improving transparency, accountability, and efficiency. Preferential policies on taxation, credit, land, technology innovation, and startups have encouraged businesses to expand production and invest in high-tech sectors, clean energy, and the digital economy.

Shaping capable, resilient and visionary entrepreneurs

These policies demonstrate the Party and State’s long-term vision in leveraging the strength of the private sector, with the goal of building a dynamic, effective, and sustainable private economy, making it one of the main drivers of an independent, self-reliant, and deeply integrated national economy.

Against this backdrop, Vietnamese entrepreneurs face unprecedented opportunities but also significant challenges. Opportunities arise from Vietnam’s deeper integration into the global economy, with next-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP) opening vast development space and enabling businesses to participate more deeply in global value chains. Policies supporting digital transformation, green growth, innovation, and sustainability also create favorable conditions for enterprises to restructure production models, improve productivity, and build globally recognized Vietnamese brands.

The challenges are also significant. Globalization and intense international competition require Vietnamese entrepreneurs to constantly innovate in thinking, improve management capacity, and enhance labor productivity. Pressures related to digital transformation, green transition, sustainable development, environmental standards, and social responsibility are mounting. Many entrepreneurs still struggle with shortages of long-term capital, skilled human resources, and access to modern technologies.

In addition, global market volatility, geopolitical risks, and shifting consumer trends demand stronger resilience and faster adaptability from enterprises.

In this context, Vietnamese entrepreneurs must further strengthen their determination, intellect, and national spirit; proactively build linkages and partnerships domestically and internationally to enhance competitiveness and deepen integration into global value chains. Developing corporate culture, business ethics, and a spirit of innovation is not only essential but also a foundation for asserting the position of Vietnamese entrepreneurs in the new era.

Over the past years, the Vietnam Chamber of Commerce and Industry (VCCI) has played an important role as a bridge between the State and the business community. It has promoted policy dialogue, supported enterprises in digital transformation and green development, improved governance, and fostered stronger business ethics and entrepreneurial culture. Together with industry associations, VCCI has helped entrepreneurs access information, resources, and global business opportunities, while encouraging their active participation in policy-making, consultation, and implementation. These efforts are contributing to a more transparent, fair, and efficient business environment, the foundation for the sustainable growth of Vietnam’s private sector.

It can be said that the Party and State’s economic policies are creating a “new wind” for the business community, opening major opportunities for Vietnamese entrepreneurs to affirm their pioneering role in socio-economic development. But to turn opportunity into reality, entrepreneurs must continuously learn, innovate, and pursue sustainable growth, aligning corporate interests with national interests. Only then will Vietnamese entrepreneurs truly become a core force and a pillar of a modern, independent, self-reliant, and globally integrated economy.