"Competitiveness" from Perspective of Sustainability Criteria

Mr Vinh’s story began when the Report on the implementation of the Government’s Resolution No. 19/NQ-CP dated March 18, 2014 on key tasks and solutions to improve business environment businesses and enhance national competitiveness was sent to the Government Office and the National Council for Sustainable Development and Competitiveness Improvement by the Vietnam Chamber of Commerce and Industry (VCCI). After six months of deployment, the workload done and achieved by VCCI was very impressive, featured by action programmes. A half of them were related to corporate competitiveness improvement and sustainable development. Nevertheless, he was not satisfied with the initial results achieved. He asserted that the road ahead is still very long and we need efforts of the entire political system and determinations of the business community to promote positive effects of policies.

 

This October is a memorable milestone as the business community celebrated the 10th anniversary of Vietnam Entrepreneurs Day. This was a chance for them to self-assess and self-position in a market with growing competitive pressures. Efforts and results obtained in the past tough time were undeniable. But, pressures were heavily weighed because a significant ratio of companies had to leave the market while powerful foreign companies were flocking into Vietnam with ambitious plans. What concerned Vinh was a lot of enterprises did not use sustainable development tools and they exposed themselves to business risks. After this tough period, many companies realised the importance of competitiveness, which decides the existence of a company.

 

For the time being, companies must create their own competitive advantage to end the downturn and sustain development. Vinh said he has seen hopeful green buds bursting strongly from the business community which managed to overcome the crisis time. They have new visions and the strong development of businesses will enliven the story of national competitiveness because national competitiveness and corporate competitiveness are closely correlated after all. What needs to be done now is to sow those buds to the community-wide scale. That is also the purpose of think-tanks and the people who devote to the purpose of enhancing the competitiveness in a sustainable manner. More than ever, businesses look forward to the relayed strength and direction from the Government, central agencies and organisations representative of the business community, Vinh said.

 

Before the rolling wave of foreign goods into Vietnam, some said it is important to fan the patriotism of consumers which is symbolised by the use of Vietnamese goods, thus helping enhance the competitiveness of domestic goods. Others suggest utilising local advantages, promoting the knowledge of consumer tastes and reducing product prices to edge up the competitiveness. For his part, Vinh said there is only one way out for enterprises: Finding out new competitive advantages.

 

For any business, the key is to sell or provide goods and services more efficiently than its competitors. Then, reputation and market share will come to it as a reward. This is the main content in product competition. For consumers, they care about output products and this relates to their tastes. According to traditional methods, to have their products bought by consumers, a company must compete in product price and product uniqueness and it has to renovate production technologies and facilities and apply scientific and technological advances to have sharper competitive edges. But now, there is a new form of competition which is decided by green factors. Or in other words, companies compete with each other by corporate social responsibility performance and business sustainability reporting. These are effective instruments that many big companies in the world have used to enhance competitiveness but most Vietnamese companies seem to be unfamiliar with them.

 

A sustainability report is an organisational report that gives information about economic, environmental, social and governance performance of a company. If financial statements illustrate profits/losses and financial movements, the sustainability report is a vehicle for the company to make public the ways it uses different forms of capital such as environmental capital and human capital. In other words, sustainability reporting helps it manage risks and enhance transparency in operations and tells its true value. In the present context, as more and more investors, shareholders and even consumers are interested in corporate social responsibility, sustainability reporting is a tool for a company to show how it has contributed to environmental protection and community development, thus helping increase its credibility and enhance its competitiveness.

 

According to a recent survey conducted by VCCI, a majority of Vietnamese companies do not know sustainability reporting. Therefore, VCCI is actively lobbying the Government to institutionalise the sustainability reporting and promote the use of this new competitiveness-sharpening tool in the business community. This is an effective way to enhance the competitiveness. After all, a company with low competitiveness may be eliminated from the market. A country with low competitiveness, not disappeared though, will need more resources to make a thing. Hence, enhancing the competitiveness is the story of the nation, every business and every family.