Brian Jeffrey
Part 1: New Policies Essential for Vietnam’s Multi-Billion Dollar Business Development: Expert Insights
To cultivate large enterprises in Vietnam, a combination of both immediate and strategic long-term policies is essential.
Initially, short-term strategies should aim to eliminate existing barriers and enhance the competitive edge of Vietnamese businesses, including both state-owned and private sectors. Numerous obstacles related to capital, land acquisition, skilled workforce, and market access are currently impeding local business growth.
Consistent efforts to enhance the business environment are necessary for ongoing improvements.
On the long-term policy front, it’s crucial to align with significant national issues and global trends. Thoughtful policies are needed to leverage opportunities presented by the global reorganization of supply chains.
Areas like semiconductors and AI represent considerable avenues for Vietnam to significantly boost its economy. Additionally, the green transition offers vast prospects since the nation boasts abundant renewable energy sources.
Furthermore, tailored policies are required to harness and optimize resources so that prominent firms and innovative enterprises can tackle the country’s pressing challenges in this new era.
Given the current scale of operations, distinct policies must be developed to facilitate the growth of both SMEs (small and medium enterprises) and large companies.
Here are three key policies aimed at empowering SMEs to ascend to leadership roles:
First, enhancing infrastructure and the business climate.
For instance, Thailand allocated $40 billion for the Eastern Economic Corridor (EEC) to establish an industry and logistics hub, while Singapore focuses on strengthening its modern port systems. Other neighboring countries are similarly prioritizing infrastructure development.
In contrast, Vietnam possesses excellent geographic advantages, including a long coastline and vast renewable energy potential. Significant investment in national infrastructure, including roads, railways, waterways, and ports, is needed to establish a robust logistics framework and regional transportation network.
Second, increasing access to financial support and capital.
Access to funding remains a critical challenge for Vietnamese businesses, particularly SMEs. Malaysia has found success with its SME Bank, which offers preferential loans and guidance. Vietnam might adopt a similar model and devise policies to attract international private investors to support SMEs.
Third, prioritizing innovations and technology within business and workforce development strategies. The government should establish R&D support funds akin to those in Singapore and Malaysia.
Conversely, here are three policies aimed at fostering the growth of large corporations:
First, providing financial incentives for R&D initiatives.
Investing in technology and R&D is essential for large enterprises to sustain their market leverage.
Singapore serves as an illustrative case through its ‘Productivity Solutions Grant’ program that financially assists large firms in enhancing their R&D efforts and technology advancements.
Second, facilitating integration into global supply chains.
While there are initiatives to attract FDI (foreign direct investment) and large international firms, there is a lack of concrete strategies assisting Vietnamese companies in reaching global markets.
Robust support mechanisms are necessary to help large corporations access global supply chains via free trade agreements, enabling them to build international networks and enhance brand visibility in new markets.
An example is Malaysia’s MATRADE program, which aids large firms in accessing 40 different markets. South Korea’s national promotional strategies have similarly enabled their enterprises to penetrate international markets, benefiting their SMEs in the process and revamping South Korea’s economic landscape abroad.
Vietnamese large corporations like Vingroup, Viettel, and Vinamilk are striving for growth domestically but require supportive policies to evolve into recognized international brands.
Third, focusing on human resource development. A quick survey by Board IV in 2022 indicated a significant shortfall of skilled labor in Vietnamese enterprises, leading to intense competition for talent.
This moment calls for a strategy to attract foreign expertise to Vietnam. Thailand’s Thailand Elite program has shown success in this area, while multiple countries have implemented specialized visa policies to bring in skilled professionals.
