Seeking Direction for Businesses

 

After 20 years of implementation the doi moi (renovation) policy, the Vietnamese economy has made positive progresses. The private economic sector has recently been recognised as one of the driving forces for the national economic growth. The recent institutional change encouraged the people to do business and establish a large private business area. However, according to experts, Vietnam should pay more attention to the quality development of businesses.

 

On October 12th, 2006 in Hanoi, VCCI hosted the typical entrepreneur awarding ceremony for one hundred outstanding entrepreneurs. Their contribution for the socio-economic development of the country was recognized and honored by the society. VCCI presented "typical entrepreneur" awards and Thanh Giong cups for outstanding entrepreneurs throughout the history.

Mr. Vu Tien Loc, Chairman of VCCI, said Vietnam has done many works such as institutional construction, human resource training and corporate culture building to develop businesses but all those activities have not connected to a general long-term strategy to generate the highest efficiency.

 

According to results of surveys on large and medium-sized private enterprises in northern Vietnam, conducted by MCG Management Consulting Company and Mekong Project Development Facility (MPDF) (a project of the World Bank), the size of private businesses is quite small. A private business has an average workforce of 31 employees and an investment capital of VND4 billion (US$250,000), much lower than 421 employees and VND167 billion (US$10 million) in a State-owned enterprise and 299 employees and VND134 billion (US$8.4 million) in a foreign-invested company.

 

Mr. Vu Quang Thinh, Direct or of MCG, added the number of private medium and large-sized businesses only accounts for a small proportion and a few of them employ modern administrative tools. Among 725 surveyed large private enterprises in northern provinces, including noble prize-winners, only 16 per cent of interviewees have management manuals and 13 per cent have medium and long-termed development strategies.

 

Beginning with the Vietnam's target of developing 500,000 businesses (equivalent to 3 million individual households) and increasing the competitiveness for Vietnamese enterprises in the market economy, Ms Pham Thi Thu Hang, Director of the Business Development Institute under VCCI, said the business strategy must be closely in line with the socioeconomic development in the 2006-2010 period. In addition, the strategy needs the participation of businesses and associations during the development and implementation.

 

To fulfil the business development objective, VCCI is carrying out the programme "Giving suggestions to the strategy and goal of developing 500,000 enterprises." VCCI will gather initiatives of businesspeople, researchers, managers and concerned people in Vietnam and other countries. The initiative collection will be carried out in three months from October 1 to December 31, 2006.

The main contents of the strategy are to create favourable business environment for enterprises to penetrate and withdraw from the market; reform the State-run sector and improve the efficiency and competitiveness of this sector; increase the capacity of selected sectors; expand business-supporting service activities; and build a dynamic and able entrepreneur force. 

 

According to Ms Hang, to carry out the construction of business development programmes, the first thing is to specify focal tasks of all levels, branches and organisations taking part in the business development programme. After that, the programmes must be in line with plans and programmes of other sectors like the Medium and Small Enterprise Development Plan of the Ministry of Planning and Investment and the Export Strategy of the Ministry of Trade.

 

VCCI will hold the main role in carrying out the strategy after the government approves it.n

 

During the international economic integration, Vietnamese enterprises must have a cross-border vision and need focus on building a strong trademark and diversifying products. In building trademark, a few of Vietnamese enterprises can do these and even many enterprises are unwilling to develop their trademarks. They normally operate in several years to enjoy preferential tax policy and then dissolve to set up new ones. They should abandon such a way of thinking; instead, they should draw up the long-termed sustainable development strategies. Besides, Vietnamese companies should also study legal documents in other countries to supply products and services or invest there when the tariff barriers are removed.

 

At present, we lack knowledge and information about international standards and market approaching methods. To survive and develop, Vietnamese enterprises must know how to promote an advantage into a more advantageous one and how to diminish challenges. I think the human resource is the most decisive factor to do this. A good human resource in combination with consistence, solidarity and determination of an entire enterprise will decide against the success or failure of an enterprise in particular and the economy as a whole.

 

For many decades, Vietnam only focused on training social activists and political professors and paid little attention to training excellent economists. Hence, Vietnam should soon build and complete the Vietnamese businesspeople training strategy for the further penetration of the global knowledge economy. I myself also think that businesspeople, who are holding highest positions in enterprises, must be aware of their very important task, that is, being a teacher to discover, nurture and train business talents for the country.