Empowering Vietnamese Enterprises

In recent years, the Vietnamese business community has experienced a turbulent period with unprecedented challenges, while also entering a stage of greater maturity in adaptability, innovation, and growth aspirations.

Overcoming unprecedented difficulties

According to Mr. Dau Anh Tuan, Deputy Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), the 2021-2025 period has been highly volatile for Vietnamese businesses. From the outset, enterprises were struck by the unprecedented shock of the COVID-19 pandemic, particularly in 2021 and 2022. Hundreds of thousands of businesses suspended operations or dissolved, supply chains were disrupted, and consumer demand plummeted. In this context, the ability to adapt quickly and the resilience of Vietnamese enterprises proved decisive for survival and recovery.

Beyond the pandemic, Vietnamese companies have been affected by major global economic shifts: restructuring of global value chains with trends such as “friend-shoring” and “near-shoring,” the prolonged U.S.-China trade tensions, the Russia-Ukraine conflict, surging inflation, and monetary tightening cycles in many major economies. These incidents have created both challenges and opportunities for Vietnam to integrate more deeply into global supply chains.

Another striking feature has been the rapid acceleration of digital transformation, e-commerce, and technology adoption in business. The pandemic hastened economic digitalization, making technology adoption no longer an “option,” but a “requirement” for survival and growth. However, access to and adaptation of technology remain uneven across business groups, particularly between large enterprises and small and medium-sized enterprises (SMEs).

Despite the difficulties, Vietnam’s business sector has recorded positive outcomes. By the end of 2024, nearly 900,000 enterprises were active nationwide, with an average annual growth rate of 6.5-7% post-pandemic. Many companies quickly shifted business models, accelerated technology adoption, and expanded into e-commerce, logistics, and manufacturing automation. Firms in Vietnam’s key export sectors such as textiles, footwear, and food invested in modern management systems, meeting international partners’ requirements and maintaining orders in challenging conditions.

On exports, foreign-invested enterprises (FDI) continue to dominate, accounting for about 72% of total export turnover and retaining the leading role. The contribution of domestic enterprises to global export value chains remains modest. Localization rates in industries such as electronics, machinery, and medical equipment are still very low, underscoring the vast potential for developing local businesses if supported by appropriate policies and directions.

However, besides these achievements, the business community faces major challenges. According to Mr. Dau Anh Tuan, access to capital remains the most pressing difficulty. In the context of monetary tightening, with periods of high interest rates, complex loan procedures, and stringent collateral requirements, bank lending has been particularly difficult for SMEs.

“Compliance costs remain a burden for businesses. According to VCCI’s Provincial Competitiveness Index (PCI) survey, informal costs and lack of transparency in law enforcement continue to be significant barriers. Many enterprises report spending substantial time and money to comply with unclear or frequently changing regulations, complicating long-term business planning,” Tuan noted.

In terms of innovation, most Vietnamese firms are still focused on “adopting available technology” rather than investing in their own R&D. High-quality human resources remain a major bottleneck. Many companies, especially in technology, engineering, logistics, and digital transformation, face difficulties in recruiting and retaining skilled workers. Education and training systems are poorly aligned with business needs, while in-house training is costly and lacks support. At the same time, the implementation of government support policies at the local level remains inconsistent and ineffective, despite many initiatives introduced at the central level.

Driving reform and transparent implementation

Entering the 2026-2030 period, Vietnam’s economy must achieve breakthroughs in productivity, quality, and competitiveness. To reach this goal, the business sector, especially private enterprises, needs support through a stable and transparent policy system that creates favorable conditions in institutions, innovation, technology, finance, and human resources.

According to Tuan, the urgent priority in the coming period is to accelerate administrative reform, reduce compliance costs, and promote greater transparency in implementation. Policy-making must ensure predictability, stability, and the capacity to anticipate legal risks for businesses. Law enforcement agencies must strengthen accountability, apply laws fairly and consistently, and eliminate abuse of power and informal costs, which remain a heavy burden for SMEs.

Importantly, innovation and digital transformation are not merely trends but survival imperatives in today’s global competitive environment. The Government must enact strong, targeted policies to encourage investment in R&D, new technologies, and innovative business models. Tax and fee incentives for R&D spending must be implemented effectively, while demand-driven applied research from the private sector should be promoted.

LA (Vietnam Business Forum)