Vietnam Still Has No Techno-Consulting Market

3:26:30 PM | 7/8/2005

Vietnam Still Has No Techno-Consulting Market


Forecasts predict it will be 20 years until Vietnam has a viable technological consulting market, according to a survey by the United Nations Development Program (UNDP) and the Central Economic Management Institute.


According to the survey, which focused on technological consulting for 100 Vietnamese enterprises in Hanoi and Ho Chi Minh City, Vietnamese enterprises dedicate only 3 per cent of their annual turnover in renewal of technology and equipment.


The survey also showed enterprise technology is still in the 1980s; 69 per cent depend on imported raw materials, 52 per cent on imported technology and equipment and 19.5 per cent on imported technological secrets. In addition, only 7 per cent of their technicians are qualified.


Domestic enterprises are not active in updating technology, with the textile-garment sector in serious lack of technology, the survey revealed.


Although thousands of new companies have been established after over four years of the implementation of the Enterprise Law, investment in technology has not changed, said Nguyen Thanh Nhon, General Director of the Nhon Huu Technology Joint Stock Company.


“That’s why there is a large gap between technological consulting firms and enterprises, it will take 20 years to have a true technological consulting market,” he said.


Only 0.1 per cent of them use technological consulting services when purchasing technology, according to a recent survey conducted at over 12,000 Vietnamese companies by Switzerland’s Swiss Contact and German’s GTZ.


Takayama, senior advisor of the Japan External Trade Organisation (JETRO), said that around 30 years ago, Thailand, Malaysia and even the South Korea had similar development like Vietnam. For example, many Vietnamese companies still use 15-year-old textile-garment technology and equipment that Korean firms have upgraded.


“Entering the World Trade Organisation, the Vietnamese textile-garment industry will face fierce competition, especially from China, meaning companies in Vietnam have to change their thinking,” he said.


The import of technology and equipment in developing countries often accounts for nearly 40 per cent of total import turnover, but in Vietnam the ratio is less than 10 per cent, according to the UNDP.


“Enterprises with weak financial resources often worry about capital investment in equipment for fear of buying those that are fake or inappropriate to their actual production situation,” said Professor Nguyen Cao Menh, Director of the Application Mechanics Institute.


Surveyed enterprises have petitioned the State to reduce import tariff policies on industrial and hi-tech products serving the country’s development, as have technology research institutions and technology traders, according to the Central Economic Management Institute.


Economists said sluggish change in technology, especially in key export industries, puts Vietnamese enterprises at high risk as regional trade agreements become a reality.