Part 1: VN needs new policy to help form multi-billion dollar businesses: expert

What are the basic viewpoints to follow when building policies which you say are needed to develop enterprises of international stature?

The policies needed for development of large corporations must comprise both short-term and long-term ones, as well as specific designs.

First, we need short-term policies to remove barriers and strengthen the competitiveness of Vietnamese enterprises, both state-owned and private. A lot of barriers in capital, land access, high-quality workforce and market are hindering the development of domestic enterprises.

Therefore, improving the business environment needs to be done regularly and continuously. 

Second, when designing long-term policies, it is necessary to consider the nation’s important questions and global trends. We need reasonable policies to exploit opportunities from the global supply chain allocation.

Semiconductors and AI (artificial intelligence) are opening up great opportunities for Vietnam to make a breakthrough in economic development. Green transition is also bringing opportunities as we have limitless renewable resources.

Third, there should be specific policies to help develop and mobilize resources, so that large corporations and pioneering enterprises solve ‘national big questions’ in the new era of the country.

With the current business operation scale, it is necessary to build two groups of separate and complementary policies which pave the way for both SMEs (small and medium enterprises) and large companies to develop.

There are three policies to encourage SMEs to become leading enterprises.

First, improving infrastructure and business environment.

Thailand invested $40 billion to develop EEC (eastern economic corridor) in order to create an industry and logistics center. Singapore pays high attention its modern seaport networks. Other regional countries also prioritize infrastructure.

Meanwhile, Vietnam has great advantages in long coastline, terrain and geographical conditions, as well as limitless wind and solar power. Vietnam needs to make heavy investment in national infrastructure system, including road and railways, waterways and seaports to develop a large logistics network and inter-regional transport.

Second, financial support and capital access.

Capital accessibility is one of the biggest problems for Vietnam’s enterprises, especially SMEs. Malaysia has succeeded with SME Bank model which provides preferential loans and gives financial support to SMEs. Vietnam can consider establishing a similar system and create policies to encourage international private funds and financial institutions to make investment in SMEs.

Third, innovations and technology must be a top priority when designing strategies on developing businesses and human resources. The government needs to build R&D support funds like the ones in Singapore and Malaysia.

There are also three policies to develop large corporations and promote their leading role in development.

First, financial preferences for R&D activities.

Renovating technology and investing in R&D (research and development) is the key for large corporations to maintain their competitive edge.

Singapore is a typical success story running the ‘Productivity Solutions Grant’ program, which provides financial support to large corporations to promote R&D to develop advanced technologies.

Second, helping enterprises penetrate global supply chains.

We have initiatives and run campaigns to attract FDI (foreign direct investment) and ‘foreign eagles’ (large foreign invested enterprises), but we lack the solutions to help Vietnamese enterprises reach the world market.

Large corporations need special support to join global supply chains through free trade agreements. The policies need to focus on facilitating Vietnamese enterprises to build international business networks, enhance branding and expand their presence in new markets.

Malaysia, for example, has MATRADE program that helps large companies approach and penetrate 40 markets. South Korean national promotion programs help enterprises conquer foreign markets, including Vietnam. The development of large corporations in foreign markets has led to the development of a lot of South Korean SMEs, thus creating a new era for South Korean production and consumption in other countries.

Vietnam’s large corporations, such as Vingroup, Viettel and Vinamilk, have been making great efforts to grow in Vietnam, but they need support and reasonable policies to become international brands.

Third, developing human resources. A quick survey by Board IV in 2022 found that Vietnamese enterprises were lacking qualified workers and were competing fiercely to attract talents.

It’s time to think of attracting foreign talents to Vietnam. Thailand has succeeded with its Thailand Elite program. Meanwhile, other countries apply specific visa policies as a solution to entice talents.

Binh Minh