Seeking a Way out for Danang's Industry

 

If Danang's industry has no true but theoretical anxiety about professionally trained human resource on some forums, it is hard to foresee risks in coming years. At present, most enterprises and industries are in the severe shortage of high-level workers and talented managers. Many blame the "brain-drain" to bigger cities as workers look for high pay and an urban lifestyle. However, skilled workers want to work in a favourable corporate and industrial environment to develop and meet some essential career needs. Therefore, high salary is not a determinant. If Danang is thoroughly aware of this issue, it should provide the massive team of workers with a Training Strategy of Modern - Advanced Industrial Skills. Every worker should be proficient in a job that is attached to a certain business. Furthermore, each enterprise should train its existing employees and provide special incentives to lure quality and distinctive human resource in the coming years.

Diversifying business lines is not a new issue. However, in the current industrial situation, there is a big requirement in market compatibility. When entering the WTO, new supporting industries will arise. In order to avoid lagging behind, Danang's industry should restudy its inner network of manufacturing - business to figure out what business lines are lacking. In this manner, the Danang Industry can more proactively develop its existing products.

Resolution No. 39 (2004) by the Politburo on association in the Central pivotal economic region placed an emphasis on this matter. Regretfully, this strength still remains in the form of potential in the Central. As the potential has not transformed into active energy, the industrial sector in Danang has been fighting or has been dominated in its own market (in terms of developing business lines and market share). The local government has not found the way-out or turned potential into power after two years of joining the WTO. As a result, industrial proportion in each key provinces and cities is different. For example the industrial sector in Danang only accounts for 38 per cent of the GDP but the figure is 72 per cent in Khanh Hoa province. The presence of central industry in the local area is good for socio-economic development. However, from the aspect of GDP or revenue, the nature is different. Therefore, industrial enterprises operating in the same area will likely cause difficulties for each other in the market. Regional collaboration in industrial manufacturing and business with the regulation of associations will have the true positive significance when the WTO's "rule of the game" denies the subsidies provided by governmental authorities.
Importing up-to-date technologies and equipment

Import tariffs will be reduced. This is a good chance for industrial enterprises in Danang to liquidate obsolete machinery and assembly lines to import new modern ones. Due to small capital, the most feasible solution is to cooperate in business or in establishing new business ties with more powerful and superior partners from other countries. The second possibility is to renew technologies in the most important stages to create products of a higher quality. Moreover, the problem can be fixed by corresponding export to receive better machinery and equipment (though being used for a certain amount of time). If Danang can re-organise some key business lines and manufacture a few advantageous goods to break the deadlock of being unable to choose which field to invest in, these problems can be gradually solved.
Looking for financial support

Danang's industry has for a long time depended on commercial banks, some insurance companies and a few financial funds. However, the way of doing business should change when Vietnam gets more involved in the WTO. That means enterprises should not borrow scattered loans or short and medium-term loans just because of doing small businesses. It is better to ally with some prestigious banks, which have a high ability of capital mobilisation (or able to be a financial intermediary) to act as a strategic partner or in other words, act as a true "midwife" for the development of enterprises. Simultaneously, industrial enterprises in Danang should reappraise their inner power to carry out equitisation, directly raise the idle public fund, and participate in the stock market to increase the "virtual" capital but in genuine value.

The five above-mentioned solutions are just suggestions. The foundation for them is based on insight and knowledge. This is the opinion to share with leaders, managers, particularly industrial entrepreneurs in Danang in the first days of a new year.
Ngoc Hanh