Actively Adaptive for Sustainable Development

2:27:23 PM | 11/13/2020

Vietnam needs to overcome challenges and seize opportunities to become a destination for the new investment wave in the region. Investment cooperation must be selective, based on mutual benefits and in accordance with international practices.

Commitment to business support

At the Vietnam Business Summit (VBS) 2020 held on November 12 in Hanoi, Standing Deputy Prime Minister Truong Hoa Binh emphasized that “To accelerate economic development, the Government of Vietnam advocates building a development-enabling government of integrity, drastic action and public service and creating a favorable business investment environment. Fostering the digital economy and digital society towards sustainable development, the government will support digital, information technology and communication infrastructure to train high-quality and skilled human resources in order to lift the share of digital economy to 20% of the country's GDP by 2025”.

The Government leader affirmed that the Government has taken aggressive action to support the business community to overcome hardships, turn challenges into opportunities, make good use of Fourth Industrial Revolution (4IR) achievements, attract FDI inflows from restructured global supply chains and production chains, foster trade promotion, digital transformation and support for new business models, new export, consumption and communication modes among other things. Besides, improving education and training quality, especially higher education and skillful workmanship training for modern economic development, will be focused.

Clearing bottlenecks for integration

According to experts, businesses need to focus on three areas to adapt to global economic fluctuations: Digital transformation, logistics and high-tech agriculture.

Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI) and Chair of the Vietnam Business Summit 2020, said that the last term witnessed a 1.5-fold increase of businesses and three reform waves. We eradicated thousands of sub-licenses, reduced 50-60% of administrative regulations related to business, established a special working group in charge of reviewing shortcomings and overlapped procedures and an investment attraction working group. In the coming time, the Government will steadfastly aim at promoting economic development in the new context of COVID-19 pandemic contagion.

Affirming that the digital economy is one of main growth drivers of a sustainable and inclusive economy, Dr. Loc believed that there are many good signals of investment flows into this field. Recently, among 30 Japanese investors asking for relocating their projects out of China to other countries, 15 projects arrived in Vietnam. Specially, Samsung Group of South Korea will put into operation its largest R&D Center in Southeast Asia by 2022. The firm currently contributes 25% to Vietnam's export value.

Regarding cooperation with the United States, VCCI President Loc said that the recent Indo-Pacific Business Forum (IPBF) in Vietnam, attended by more than 2,000 delegates, wrapped up with US$11 billion of deals signed by Vietnam and the United States.

He believed that the logistics industry is the key for Vietnam to actively join the global value chain. Influenced by the Industrial Revolution 4.0 and the global Covid-19 pandemic, the logistics service industry is changing greatly. Vietnam's logistics industry is a development bottleneck. Logistics costs in Vietnam are highest in the region and the world. Vietnam only needs to tackle this bottleneck to create breakthrough logistics development. There are development opportunities in this field, especially applying information technology and digitization.

As a big exporter of agricultural products in the world, Vietnam's cooperation in high-tech agricultural development will help increase production and quality of agricultural products to better serve rising market demands. Therefore, Vietnam needs to improve the quality and output of agricultural exports, find development directions for agricultural production, and apply science and technology to agricultural production because this is a good opportunity for Vietnam to export agricultural products.

Mr. Do Nhat Hoang, Director of Foreign Investment Agency, MPI

Vietnam has certain advantages such as political stability, rapid and sustainable growth, competitive costs and incentives, abundant human resources, deep integration into the world economy, strong ongoing reforms and lying in the middle place connecting China with ASEAN countries and other countries.

To prepare for foreign investment capital, industrial zone land must be available first of all because capital inflows are mainly channeled into industrial zones. The second is training highly skilled human resources and speeding up training ordered by enterprises.

The third is about energy. The Ministry of Industry and Trade is reviewing the VIII Electricity Scheme. Vietnam is expected to establish billion-dollar investment cooperation in this field. The fourth is promoting supporting industries. In August 2020, the Government issued a resolution to accelerate supporting industries. Fifth, Vietnam has constantly revised its policies in recent years. For example, the revised Investment Law removed many cumbersome policies and procedures and added more incentives.

Foreign investment cooperation must be selective and based on win-win principle. Selection criteria are technology, environment, and specially committed cooperation to bring Vietnamese businesses into global supply chains. Vietnamese companies must be involved in supply chains of foreign investors - This has been institutionalized in the Law on Investment and drafted resolutions.

Ms. Dinh Thi Quynh Van, General Director of PwC Vietnam

The PwC Global CEO Survey conducted last July showed that two key trends focused by CEOs in the time of the COVID-19 pandemic outbreak: Prioritizing digitization and building the team for future. Accordingly, 41% of CEOs said growing their business digitally and online is a top priority, followed by 26% of CEOs who planned to build a more flexible workforce with people-center policies.

The Covid-19 pandemic has helped accelerate digital economic growth, enabling companies that are at the forefront of digital transformation to gain certain advantages. Also in PwC's Global CEO Survey, 76% of business leaders believed that automation will be an inevitable trend, meaning significant resources will be needed to facilitate the transition, including the upskill of employees. In the future, businesses will need to focus on finding appropriate options to upskill their employees.

This is the time for them to recognize and reassess their business models and internal capacities, from which they can develop plans for different scenarios that may occur in the future. To stay ahead of current changes, they need to quickly apply new thinking, accelerate digital adoption and proactively bring change in their businesses.

Mr. Do Huy Binh, Director of Smartlog Supply Chain Solution JSC

In Vietnam, most enterprises are small and medium in size but they have the opportunity to adopt information technology solutions faster than large corporations/global corporations because the latter must change globally. While we work with them, we realize that even small domestic technology companies now have very effective technology solutions. This is an advantage for Vietnamese companies. Vietnam's digital transformation must start from building a database. However, our database is currently very scattered. So, we are working on the database and it will probably take 2-3 years to gather information and convince businesses to cooperate in data sharing.

Source: Vietnam Business Forum