Technology Improvement for Enterprises in Ips

The Ho Chi Minh City’s Department of Science and Technology has made a survey to assess the technological capacity of enterprises operating in the city’s industrial zones and processing zones. The survey result found that over a half of the enterprises are using out-dated technologies and a low-skilled work force. The city is seeking measures to improve the situation.   

Phan Minh Tan, Director of the Municipal Department of Science and Technology, said that the survey was made up of 429 out of a total of 830 enterprises, both domestic and foreign, in 12 industrial and processing zones. The survey found only three firms -- all domestic ones-- are operating advanced production lines while the number of technologically rudimentary companies accounts for 51 percent.

 

In the Southwestern Cu Chi industrial zone, the number of technologically out-dated firms makes up 67 percent, medium technologies 23 per cent and above average technologies merely 10 per cent. 

 

Another industrial zone that has a high number of technologically out-dated companies is the Tan Thuan processing zone, with 63 per cent of companies falling short. Meanwhile, 36 per cent of companies have average technologies and only 1 percent has above average technologies.

 

Almost all enterprises in the industrial and processing zones trended to buy secondhand machines and equipment which maintained around 50 percent-90 percent of their technical value. However, there are up to 10 percent of enterprises having bought machines whose technical values remained below 50 percent.

 

As a result, the longevity of assembly lines in enterprises is relatively high. The survey found about 2 percent of production lines in foreign-invested enterprises were above 20 years, 23 percent between 10 and 20 years, 56 percent between three and ten years and 18 percent below three years. In domestic firms, the figures were respectively 2 percent, 12 percent, 62 percent and 21 percent.

 

The rate of enterprises applying automation systems accounts for 25 percent with semi-automation accounting for 60 percent. The remaining 15 percent account for handicrafts and mechanical systems. A large number of technologies and machines were imported from China and only a few originated from the US, Japan and European nations.   

 

This survey also focused on the quality of workforces. Of the total number of 130,000 surveyed workers, only 6 percent had graduated college or university, while 23 percent had been trained vocationally. The rest are unskilled laborers. The industries having out-dated technologies included garments, woodwork, paper, leather shoes, rubber and mechanics.

 

The survey results showed a clear imbalance in investment for development. The enterprises paid attention to purchasing and equipping modern production lines, but did not keep an eye on training workers so their skills could match newer, advanced technologies. The collection and application of information and technology in management and production activities are still limited.     

In the early 1990s, Ho Chi Minh City was one of a few provinces and cities pioneering the establishment of industrial and processing zones, with the aim to lure investment capital for development and production and resolve unemployment problems. At that time, the US still maintained an embargo on Vietnam, while there were not many economic giants in the world interested in investing in the country. The decade also witnessed a wave of out-dated technologies from developed nations being transferred to developing countries including Vietnam. At that time, Vietnam in general and Ho Chi Minh City in particular were in need of investment capital for development and the creation of jobs to curb unemployment. Thus, the target of creating industrial zones in order to lure capital and creating jobs was made a top priority rather than focusing on sustainable development measures like investing in high technology and environmental protection.   

 

In addition, earlier there had been production zones located in the city, polluting the living environment and affecting the municipal citizens’ health. Thus, the city’s authority decided to move these establishments to suburb industrial zones like Hiep Phuoc, Le Minh Xuan and Tan Phu Trung.

Mr Le Anh Tuan, Vice Head of the City’s Management Board of Industrial and Processing Zones said that his agency has cooperated with the Department of Science and Technology to upgrade technologies for enterprises.

 

“This work is not easy, but we are determined to carry it out,” he said.

 

“At first, we will promote the installment of software to assess the technological degree of enterprises. This is the basic step to enable enterprises operating in industrial zones to define what their limitation is (organization mechanism, workforce, technology or information).  

 

By doing that, enterprises will find suitable measures by themselves. Secondly, we will build a think-tank involved in fields of finance and technology to assist and consult enterprises in planning projects as well as selecting technology suitable to their field of operation. The management board is also calling on the city’s association of enterprises to set up branches of each industry to facilitate the mutual support in capital, labor, market information and even technology. On schedule, the association will establish the branch enterprises in four main sectors, including mechanics, electronics-IT-Telecommunications, pharmaceutical chemistry and refined food and foodstuff processing industry.

 

Besides, in accordance with the municipal people’s committee, the management board is joining hands with the department of science and technology to research a scheme on the establishment of technological renewal fund in order to support enterprises. The scheme will be submitted to the city’s people committee in July this year.   

 

The management board has also appointed some staffs to attend five components of the technological renewal project to serve the industrial mechanism transference in the city, which has been given a nod by the city people’s committee.”