Private Enterprises - Driving Force of Economic Development

12:52:45 PM | 11/10/2019

In Vietnam and the world, private enterprises are playing an important role in the economy and increasingly asserting their position. Without doubt, with current development momentum, they are the driving force of economic development.

Increasingly powerful force

According to statistics, the number of private businesses increased sharply from 655,000 in 2017 to 730,000 in 2018 and 743,409 by the end of the first quarter of 2019. Business startups boomed, with about 3,000 innovative startups in 2018. The total registered capital increased from VND1,295,911 billion in 2017 to VND1,478,100 billion in 2018. Each year (2017 and 2018), more than 1.1 million new jobs were created. In the first quarter of 2019 alone, VND375,500 billion was invested into the economy and nearly 320,000 new jobs were generated. The operating scale of many private businesses is expanding, with some having total assets of hundreds of trillions of Vietnamese dong and employing tens of thousands of workers.

The private sector accounts for about 40% of the country’s GDP. This sector (not counting business individuals and households) posted annual growth of nearly 12% in 2017, higher than the GDP growth 6.81%, made up 26% of export value and 34% of import value, accounted for 32.26% to fiscal revenue in 2017 and 38.20% in 2018, much higher than 29.43% in 2016.

In addition, as of early 2019, the country had over five million business individuals and households, which accounted for more than 30% of the GDP. Some business households employ hundreds of employees but they are not regarded as businesses.

According to Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), the private sector is comprised of not only more than 700,000 enterprises, but also millions of business individuals, households and foreign direct investment (FDI) firms. So, the private economy accounted for 61% of GDP, not a modest 10% as currently calculated. Besides, if we mention the private sector in such a broad sense, this sector is playing a crucial role in the Vietnamese economy.

With their increasingly asserted position, entrepreneurs are one of vanguard forces to promote the country's economic development. They play a key role in business, always strive to operate and develop their business to the best, and generate economic and social value. Not only bringing in a large source of revenue, entrepreneurs also creates good jobs.

Promoting driving role of economic development in the 4.0 era

A country’s development depends heavily on business aspirations, enterprise and engagement of entrepreneurs, he said. In the present age, the status of a nation and a people depends primarily on its economic status. Meanwhile, boosting the country's economic development and shaping Vietnam's position on the world economic map is the mission and responsibility of the entrepreneur force and the business community. In fact, high economic growth of Vietnam in recent years is an affirmation to significant contributions of the entrepreneur community and the business community.

Especially, with the boom of the Fourth Industrial Revolution (Industry 4.0), the application of advanced technology and techniques to sustainable business development and environmental protection, Industry 4.0 is not just a challenge but also an opportunity for many businesses to reach out to the world. This will be a launchpad for businesses to jump higher, or it will be a brake to stop them. As a matter of fact, the future of business all depends on its leadership - leaders and owners.

As decision-makers, businesspeople must be shrewd and know how to grasp the opportunity and limit challenges caused by Industry 4.0, said Dr. Loc. Business owners must plan good business strategies to improve competitiveness, technology development, management and corporate governance to build sustainable businesses, generate many values for society and actively protect the environment.

Needless to say, the entrepreneur force plays an important role to achieve the goal of one million businesses by 2020. Valuably, Vietnamese entrepreneurs and enterprises have high entrepreneurship and Vietnam is seen to be one of the countries with the highest entrepreneurship in the world. This is why private enterprises, represented by entrepreneurs, are considered motivations of economic development.