Vietnam used to set a target to have 1 million enterprises by 2020, but it failed due to various reasons, especially the impacts of the COVID-19 pandemic in the past few years.

Adverse impacts, international conflicts, shrinking commodity consumption markets, and supply chain disruptions have prevented the establishment of new businesses. As a result, many businesses have gone bankrupt and had to withdraw from the market.

According to the Ministry of Planning and Investment, to have 1 million businesses operating in 2020, the growth rate of the number of enterprises must have topped 17% per year in the previous period, while the actual rate was just over 10%.

Deputy Minister of Planning and Investment Tran Duy Dong said that policies to support enterprises, particularly small- and medium-sized enterprises (SMEs) have yielded encouraging results over the recent year. The average growth rate of enterprises in the 2016-2019 period is 14.4%, an increase of about 80% compared to that during the 2011-2015 period. Private enterprises currently make up about 46% of the Gross Domestic Product (GDP).

However, there is still a gap between policies and realities. The quality of reform and the effectiveness of the Government’s support for businesses are still limited. Out of the about 865,000 operating enterprises, 98% are private SMEs. Particularly, in the first quarter of 2023, the whole country had 57,000 new enterprises and returned to operation, down 5.4% over the same period in 2022. But more than 60,000 enterprises withdrew from the market, an increase of 17.4% compared to the same period in 2022.

A worker operates the household appliance production line at Son Ha Household Appliances Factory in Phung Industrial Cluster, Hanoi's Dan Phuong district.(Photo: hanoimoi.com.vn)

For the new target of 1.5 million enterprises by 2025, according to experts, the Government must support not only the establishment of new enterprises but also the operation of the existing ones to avoid the case that the number of withdrawals is higher than that of the new.

Economic expert Nguyen Dinh Cung said that from the national level to localities, each must set specific goals with an identified number of enterprises to be established yearly and measures to realise the goals.

Economist Vu Dinh Anh said that to have 1.5 million enterprises by 2025, it is necessary to focus on encouraging individual business households to turn into enterprises.

It is also necessary to develop enterprises in the fields of the digital economy and green economy which Vietnam is prioritising.

According to the Ministry of Planning and Investment, Vietnam will keep promoting reform in state management of private enterprises. The government and management agencies also persist in six groups of solutions to promote business development, including post-pandemic support to businesses and developing big enterprises which take a leading role in industries. Vietnam also promotes research and innovation in enterprises, develops high-quality human resources, strengthens business linkages, and improves the efficiency and effectiveness of management for business development./. VNA