Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that the path Vietnamese entrepreneurs go is full of ups and downs. Since Vietnam initiated the doi moi (renovation), Vietnamese entrepreneurs have undergone two phases of development: The revitalisation of businesspeople after the doi moi, and the formation of doi moi-era entrepreneurs. When the country advances to a higher stage, the higher level of doi moi is integration. Hence, it is necessary to develop the integrating business force.
Leaders in economic development
After Vietnam started the doi moi, the Vietnamese business community revived and developed strongly and rampantly in a short time. Since the Law on Enterprises 1999 came into force, the Vietnamese entrepreneur force expanded powerfully. According to statistics from 2006 to 2010, Vietnam’s had 46,700 new business start-ups with a total registered capital of VND146.3 trillion, or VND3.13 billion a project in 2006. The number of business start-ups increased steadily through 2010. The country saw 58,800 new companies with a combined registered investment capital of VND473.8 trillion, or VND8.06 billion a project in 2007; 65,300 new companies with VND569.5 trillion, or VND8.72 billion per project in 2008; 84,300 new enterprises with VND517 trillion, or VND6.13 billion per project in 2009; and 83,600 new companies with VND489.6 trillion, or VND5.86 billion per project in 2010.
However, yearly business start-ups declined from 2011 when the country had 77,548 new enterprises, down 7.2 percent over 2010. It had 69,874 new companies in 2012, down 9.9 percent year on year and saw 76,900 new enterprises with a total registered capital of VND398.6 trillion, or VND5.07 billion per project in 2013. Although the new business start-ups in 2013 rose 10.1 percent over 2012 but the amount of registered capital slumped 14.7 percent over 2012 and much lower than in 2011. In the first nine months of 2014, Vietnam saw 53,192 business start-ups with a combined registered capital of VND320.3 trillion, down 8.7 percent in in projects but up 13.9 percent in capital value from the same period of 2013. On average, a project was invested VND6 billion. However, from January to September 2014, as many as 50,000 companies registered to be dissolved, to go bankrupt or to suspend operation.
Despite changes and difficulties caused by the global economic crisis and global integration impacts, the Vietnam business community is always a pioneer in economic development. Coupled with the robust business development, the country’s GDP growth averaged 7.01 percent a year from 2006 to 2010. Nevertheless, the growth slowed down in recent years, specifically 6.2 percent in 2011, 5.2 percent in 2012, and 5.42 percent in 2013. According to the Economic Update Report for Vietnam released by the World Bank (WB) in July 2014, Vietnam's GDP expected to rise 5.4 percent in 2014.
Building entrepreneur force ready for integration
Stepping into the global integration period, a significant part of entrepreneurs and enterprises failed to withstand stronger waves and storms in a broader market with global challenges. In couple with economic crisis, Vietnam witnessed a faster increase in corporate bankruptcies. Nearly 29,000 companies registered to be dissolved, to go bankrupt or ease operations in the first half of 2013, representing an increase of 10.5 percent year on year. In the first nine months of 2014, the country saw 48,000 cases.
However, according to economists, misfortune has its senses. Companies getting through the crisis are high-quality ones. They were tested by fierce competition. They are now strong enough to take any challenge to develop. New start-ups in the crisis time proved that they were ready to confront with hardships because they believed they could win eventually. According to the Business Registration Administration under the Ministry of Planning and Investment, entrepreneurs are more precautious with every penny of their capital when they spend on the market.
At the Vietnam Business Forum 2014 hosted by VCCI on September 19, VCCI President Vu Tien Loc said the Vietnamese business community is heading for two goals in the next 10 years: Building a force of one million good-performing enterprises and having some entrepreneurs, enterprises and products reach Southeast Asia level. He said the wave of institutional reform is paving the way for the second wave of business investment of Vietnamese business community.
In the perspective of a businessman and an empirical researcher of business development, Mr Nguyen Lien Phuong, Director of LP Vietnam Academy of Entrepreneurs, President of LP Group and President of VChoice Dubai, said that building an integrating entrepreneur force must start from awareness: Social awareness about entrepreneurs and self-awareness of entrepreneurs. We must create a generation of entrepreneurs with high class, high capacity and broad networking. He said integration not only requires scale but also class. In the integration process, entrepreneurs are the host of the ‘game’ and they need desire flames to make success. If an entrepreneur just sit and wait for business opportunities to come or attribute his failures to institutional reasons, his entrepreneurial spirit is not high.
Building an integrating entrepreneur force is not an unprompted move. It needs a national policy with right powerful solutions and clear roadmaps. With two generations of entrepreneurs - one is already seasoned with storms and waves from the early stage of doi moi, and another is full of knowledge and bravery to reach the vast ocean and to ride the waves - the goals announced by VCCI President will come true.
Nguyen Thanh
Vietnamese
