Removing bottlenecks in private sector development to drive economic growth

Since 2011, the private sector in Viet Nam has continued to face several persistent limitations and structural bottlenecks. According to experts from the National Economics University, these challenges largely stem from incomplete, inconsistent, and even inaccurate perceptions and assessments of the private sector. At the same time, the policy framework still lacks inclusiveness in many respects, resulting in unequal treatment between the private sector and other economic sectors – particularly in terms of access to production resources, the conduct of business operations, and the distribution of income generated from business activities.

Experts also point out that Viet Nam’s private sector has yet to establish an effective model that can unify its constituent elements. In addition, Vietnamese entrepreneurs are lacking key characteristics required in today’s increasingly competitive and modern economic environment.

For these reasons, the research group has made the following recommendations:

First, refine the mindset and approach to perceiving the private sector. This involves adopting a systemic perspective, with two key emphases: highlighting the central role of Vietnamese-owned businesses, while also recognising the segment of the Vietnamese private sector abroad – including enterprises investing overseas and the private economic activities of Vietnamese citizens residing abroad who maintain economic ties with the homeland. At the same time, there needs to be a clear and coherent positioning of the private sector within the national economic system, where it is regarded as the primary and most important driving force in achieving double-digit growth targets.

Second, from the perspective of inclusive development, remove institutional and policy-related bottlenecks that hinder the growth of the private sector in relation to other components of the economy. Specifically, policies must be improved to ensure a level playing field for private enterprises compared to state-owned and FDI enterprises; at the same time, support policies should be strengthened to foster the development of different groups within the private sector.

Third, improve models that connect the Vietnamese private sector through various forms of linkage. This includes fostering connections among different types of domestic private enterprises through a “spillover effect” model, and organising collaboration between overseas Vietnamese enterprises and domestic private businesses located in the same localities where such enterprises operate.

Fourth, develop a team of Vietnamese entrepreneurs capable of meeting the new demands of the economy in the context of international integration, with a focus on building a more professional and advanced entrepreneurial force that can adapt to the modern business landscape. This could involve designing and implementing a range of targeted programmes, such as support for start-up founders, owners of small and medium-sized enterprises’ (SMEs), and executives of large enterprises; the development of national business leaders informed by relevant international experience tailored to Viet Nam’s context; and digital transformation for private enterprises, with a particular emphasis on applying technologies such as artificial intelligence (AI), big data, and cloud computing in business management.

Notably, it is essential to establish a financial support mechanism and incentive policies to encourage entrepreneurs to participate in training programmes. A National Entrepreneur Development Fund should be created, sourced from the state budget, business contributions, and international aid. This fund would provide scholarships and preferential loans to entrepreneurs participating in high-quality training programmes. Special support policies should also be introduced for specific groups such as women entrepreneurs, young entrepreneurs, and those operating in remote and disadvantaged areas.

At the same time, it is necessary to foster entrepreneurial spirit and a healthy business culture by systematically developing and promoting a Code of Business Ethics for Vietnamese entrepreneurs and organising national communication campaigns aimed at raising public awareness of the entrepreneur’s role in socio - economic development.

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