by Customsnews 02/10/2024, 02:00

Vietnam still primarily relies on processing and manufacturing with limited automation integration

Vietnam needs to cultivate domestic enterprises that are large-scale, possess international competitiveness, boast established brands, and can serve as cornerstones in leading the industrialization and modernization process.

Vietnam currently faces numerous opportunities for developing the semiconductor industry. Photo: Collaborator

Vietnam currently faces numerous opportunities for developing the semiconductor industry. Photo: Collaborator

The need to develop "flagship" enterprises

During the seminar "Vietnamese entrepreneurs and their role in spearheading key industries," organized by the Ministry of Industry and Trade's newspaper "Cong Thuong" (Trade and Industry) on September 24th, Mr. Pham Tuan Anh, Deputy Director of the Department of Industry (Ministry of Industry and Trade), assessed that Vietnam has witnessed the emergence of some "flagship" enterprises capable of driving the economy, such as Vingroup, THACO, and Hoa Phat. However, their numbers remain inadequate to meet the demands of economic development. Currently, the development of Vietnam's industrial sector still heavily relies on external factors.

Mr. Vu Van Khoa, Deputy Director of the Institute of Mechanical Engineering Research, argued that while some robust corporations exist in sectors like automobile and motorbike manufacturing and hydropower, in many other areas, Vietnam lacks enterprises strong enough to spearhead the manufacturing industry. Currently, businesses primarily focus on basic technology adoption and lack the capacity for industrial autonomy, with technology remaining heavily reliant on foreign companies.

Mr. Khoa cited examples, particularly in energy projects and the development of railway and highway infrastructure, where Vietnam heavily depends on FDI enterprises. Consequently, the value added generated is minimal, and the level of technology transfer is not substantial.

According to economic expert Dr. Tran Dinh Thien, Vietnam's production remains fundamentally based on processing and manufacturing, with limit ed integration of automation and digitalization. There exists a disparity in the industrial structure, with foreign-invested enterprises accounting for a high proportion, contributing 22-23% of GDP, while domestic enterprises contribute only 10%.

Moreover, the industrial value chain system lacks clarity. Industrial enterprises and Vietnamese entrepreneurs have not yet effectively established robust industrial linkages between domestic and international markets; they have not fully succeeded in attracting industrial value chains from global corporations and enterprises into Vietnam. Furthermore, the industrialization and modernization transformation of enterprises remains relatively weak.

Regarding the development of the industrial sector, particularly in key industries, to reduce dependence and participate in global supply chains, experts suggest focusing on developing "flagship" enterprises aligned with sector-specific development strategies. This involves identifying key sectors with a strong presence of enterprises, such as foundational industries, priority industries, spearhead industries, and high-tech industries.

Encouraging innovative start-ups

According to economic expert Dr. Tran Dinh Thien, Vietnamese enterprises still lack well-defined strategies for building businesses that are closely aligned with practical realities. The focus has primarily been on quantitative growth rather than developing robust enterprise strategies.

Mr. Tran Dinh Thien cited the example of Japan's multi-tiered enterprise model, encompassing large corporations, mega-corporations, medium-sized enterprises, small enterprises, and micro-enterprises. Based on this model, it becomes easier to categorize and define development strategies tailored to each tier of enterprises.

According to Mr. Tran Dinh Thien, encouraging innovative start-ups is akin to "injecting vitality" into the business community and the economy. This approach can potentially foster the emergence of new business leaders and create new "flagship" enterprises that drive economic growth.

From an enterprise perspective, Mr. Hoang Manh Tan, Deputy General Director of Son Ha International Joint Stock Company and Vice Chairman of the Board of Directors and Director of Son Ha Energy Development Joint Stock Company (SHE), argued that within a business environment characterized by various challenges, several factors are crucial for developing a thriving Vietnamese industrial sector and establishing strong pillars.

Firstly, it is essential to strengthen trust in Vietnamese enterprises and avoid excessive reliance on foreign companies. Furthermore, the development of enterprises into industry pillars requires a significant time investment and the implementation of long-term policies that foster their growth. Human resources also play a critical role in the enterprise development process.

"Enterprises themselves have proactively invested in training, producing a substantial number of engineers, but sometimes there is disconnection between training and practical application, and the availability of high-quality human resources remains inadequate," stated Mr. Hoang Manh Tan. He also noted that Vietnam is becoming an attractive investment destination for the region and the world, evolving into a leading manufacturing hub. Therefore, in addition to mechanisms and policies from regulatory agencies, businesses themselves need to proactively develop strategies to capitalize on opportunities, become pillars of national development, and achieve global reach.