Business Linkage Promotes Sustainable Development

Vietnam is known as a major supplier of rice, coffee, pepper, aquatic products, etc. but fails to develop national brands of international standard competing with those of the world. Highlighting the role and strength of business linkage in the time of international integration, VCCI Vice President Dr. Doan Duy Khuong, Chairman of ASEAN Business Advisory Council, discussed the topic with Vietnam Business Forum. Dang Yen reports.

First of all, it is necessary to underline the importance of business linkage in economic integration. It generates accommodation in each sector and develops product brands and increases competitiveness at home and abroad.

 

So far, Vietnam has over 500,000 businesses engaging in all areas with many associations such as those for coffee and cacao, apparel, aquatic processing and export, footwear, wood and forestry products. Though business linkage has been discussed at many forums and seminars, the awareness of businesses remains limited, especially among small and medium sized enterprises.

 

In fact, most of businesses focus only on specific interests, “each for its own” or “do everything and take everything”, caring for its own brand and products, and having no interests in developing the brand of the whole sector. Furthermore, it is clear that due to limited resources, the associations could not play their roles in management, especially those in weak regions without capacity for competition.

 

 Those shortfalls make it impossible for Vietnamese businesses to compete with foreign companies even on their home court, let alone in international markets. While big companies can take care of themselves, small and medium enterprises fail to act in union and sometimes even engage in unhealthy competition.

 

For example, in coffee crop 2010-2011, foreign businesses could buy coffee bean directly from the farmers instead of through Vietnamese exporters thus reducing Vietnamese coffee export capacity. As a result, the absence of linkage had led to poor competitiveness and losses right in home court when coffee, rice, cashew nut and pepper are main Vietnamese exports with big market shares in the world.

 

As a result, Vietnamese products could be known only as leading exports, without complete products of national brand and international quality similar those of Starbucks, Nestle, etc.

 

Due to the small size and lack of linkage, Vietnamese businesses, especially wood and garment enterprises, with small capacity and poor technology had to refuse orders from foreign partners for products of high quality and big quantity. However, with combination of strength and formation of value chains, products of Vietnamese brand can be early known in the world market.

 

Right, for instance, garment is the biggest Vietnamese export but Vietnamese businesses had to attach their products to foreign trademarks. Even leading Vietnamese enterprises as Garment 10, Phong Phu, etc. are without famous brands in the world market. Naturally, it takes time to develop a brand. However, with linkage of comparative advantages, Vietnamese businesses can create complete products of high quality, join modern markets and develop Vietnamese fashion brand of international standard.

 

Similarly, aquatic products, coffee, pepper – main Vietnamese exports, are only raw materials for foreign importers to process and attach their own trademarks. Meanwhile, Trung Nguyen coffee, Buon Ma Thuot coffee, Bien Hoa Vinacafe famous in domestic market and several countries remain as their own products with their own brands. Therefore, concerned business association must develop linkage and national trademark for Vietnamese coffee to compete in the world market.

 

Sure, Vietnam is in the process of integration into international trade with several multilateral cooperation programmes such as member of Asia-Pacific Economic Cooperation (APEC), WTO, ASEAN and party to bilateral trade agreements with over 170 countries and territories. Vietnam can contribute several products of important market shares in the world market. Therefore, it is the best chance to develop national brand of quality and reputation in the world market.

 

However, it is also a big challenge to the government and related ministries and agencies to issue policy to increase awareness of business communities on the advantages of business linkage in the development of national brand. Subsequently, they must create consensus and confirm responsibility of businesses and associations in developing sustainable brands of their businesses and products.

 

One of the objectives of VCCI is to develop businesses of high quality and capacity so as to ensure a strong business community with high competitiveness, national spirit, social responsibility, uniting and participating actively in the production and global chain of value. They will be the nucleus playing decisive role in the industrialization, modernization and international integration.

 

 Consequently, VCCI focuses on coordinated activities to develop the strength of Vietnamese business community, organizing programmes, forums and seminars to share experiences, mobilize and assist joint efforts to create products of high quality and reputation to develop strong brands in domestic and world markets. VCCI will also develop business communities in different localities.

 

Business forums between Vietnam and key markets will be directed to specific sectors so as to develop vertical linkage instead of horizontal one which is superficial and without efficiency.

 

VCCI will also organize trade and investment promotion programmes for different markets, industries and sectors to increase access to domestic and foreign markets and develop Vietnamese brands in key markets.

In addition, VCCI will provide and advise businesses on business laws, knowledge on international economic integration as well as experiences in international law suits and trade barriers of export markets.

 

Finally, it is most important to honour business trademarks. VCCI has organized every two years Programme honouring Vietnamese famous brands increasing the awareness of trademarks and business linkage of different sectors for sustainable development.