As of now, Vietnam still lacks enterprises capable of competing at regional and international levels, while countries such as Thailand and Malaysia have successfully achieved this. What are the reasons for this situation?  

Pham Thi Ngoc Thuy: To realize the goal of elevating the country to the group of high-income nations by 2045, adopting the development models of Thailand or Malaysia is insufficient. Vietnam must pursue an East Asian development model, like those of Japan, South Korea, or Taiwan. However, we have been working diligently to catch up with countries in the region like Thailand and Malaysia.  

Vietnam continues to lack enterprises with regional competitive stature. Among the 50 largest companies in Southeast Asia in 2024, as ranked by Fortune, Vietnam is represented by only five firms. Vingroup is a significant enterprise in Vietnam, yet it ranks only 43rd.  

Several key factors contribute to this situation:  

First, Vietnam encounters more barriers during the integration and development process. While 1986 is often cited as the beginning of Doi Moi (Renovation), our economy only began to integrate with the global economy approximately 20 years later.  

Thailand and Malaysia became WTO (World Trade Organization) members in 1995; by contrast, Vietnam had only recently seen the U.S. lift its embargo, and we did not join the WTO until 2006.  

To establish large companies and strong brands, a broad market is essential. In this respect, we are a decade behind our regional counterparts. Enterprises and entrepreneurs must exert considerable effort to compete regionally before contemplating global stature.  

Second, the private economic sector - an important driver of the economy - faces numerous barriers to development, including mindset, support ecosystems, internal capabilities, and corporate culture.  

The private sector in Vietnam has experienced considerable fluctuations. In the centrally planned economy, private enterprises were not officially recognized. After Doi Moi, the private sector was officially acknowledged as a component of the socialist-oriented market economy with diverse ownership forms. The pivotal policy shift occurred with the establishment of the Enterprise Law in 1999, which catalyzed the development of domestic private enterprises.  

Thus, the private sector has had less than 25 years to genuinely develop, requiring additional time to accumulate capital, management experience, and innovation capabilities.  

Third, many support policies for enterprises lack both long-term vision and comprehensiveness. Long-term, comprehensive policies are crucial for establishing a sustainable foundation for enterprise development.  

In comparison with other countries, Thailand, for instance, has implemented its Thailand 4.0 strategy early on, aiming to transform from an industrial economy to one based on innovation and high technology. This policy has been continuously executed over many years, with investments in key areas such as information technology, renewable energy, and manufacturing.  

Malaysia has also made similar advances. Furthermore, lessons from many exemplary countries worldwide underscore the importance of "continuous integration" and "long-term" planning when designing policies.  

Resolution No. 41-NQ/TW dated October 10, 2023, by the Politburo regarding the construction and promotion of the role of Vietnamese entrepreneurs in the new era sets forth the goal of “striving for a greater number of enterprises to achieve regional standards, with some attaining global standards.” In your opinion, what policies are necessary for Vietnam to develop billion-dollar enterprises and entrepreneurs to meet the objectives outlined in this Resolution?  

Pham Thi Ngoc Thuy: Resolution No. 41-NQ/TW has established a robust mindset and perspective regarding the construction and development of large-scale, high-capacity Vietnamese enterprises capable of equal cooperation or competition on a global scale and mastering certain value chains. This is a prerequisite for enhancing the nation’s position, strengthening the internal forces of the economy, and facilitating the country’s escape from the middle-income trap, aiming to achieve high-middle-income status by 2030 and high-income status by 2045.  

The development trajectories of nations demonstrate that to escape the “middle-income trap” and become a high-income country, globally competitive enterprises are the “backbone,” as these entities will contribute to promoting research and development, create spillover effects, and enhance the productivity of the entire economy.  

However, the policies required to develop large, leading enterprises in each nation vary significantly, and many existing policies have become less relevant over time.  

Consequently, we need a policy framework that incorporates international best practices while aligning with Vietnam's realities, particularly in this new era of national ascension.  

Key points for activating policies for the formation and promotion of large enterprises  

What critical points should be considered when constructing such a policy framework?  

Pham Thi Ngoc Thuy: Considering the nature of large enterprise development, the policy framework must encompass both short-term and long-term groups, as well as specific designs.  

First, short-term policies are needed to eliminate barriers and enhance the competitiveness of domestic enterprises in both the public and private sectors. Numerous barriers in accessing capital, land, quality human resources, and markets hinder the growth of domestic enterprises.  

Therefore, improving the business environment is an ongoing task that requires dissemination and integration from the government to local authorities, particularly aligned with the direction of government/digital governance and modern public administration.  

Second, long-term policies must address the nation's "grand challenges" and global trends. We need rational industry policies (industrial policies) to capitalize on opportunities arising from global supply chain shifts.  

The semiconductor and AI (artificial intelligence) sectors present Vietnam with substantial opportunities to create breakthroughs for the economy. The green transition and sustainable development are also generating significant prospects, as we possess nearly limitless renewable energy resources.  

With an increasingly consolidated role on the international stage, this is a pivotal time for Vietnam to transition from a resource-intensive economic model to one based on scientific and technological innovation, focusing primarily on digital and green transformation.  

Third, there should be specific policies aimed at developing and mobilizing resources for large enterprises and pioneering entrepreneurs to participate in addressing the nation’s "grand challenges" in this new era.  

Establishing national "grand challenges" through a "contracting" mechanism that requires "linking domestic value chains," along with transparent mechanisms ensuring fairness - without discrimination between state-owned and private enterprises - represents a trend that many businesses anticipate.  

Given the current scale of enterprises, it is essential to establish two distinct, but complementary groups of policies aimed at nurturing and promoting both existing large enterprises and pioneering small and medium-sized enterprises (SMEs) that aspire to become leaders in their respective fields.  

The first group focuses on SMEs with aspirations to lead, break through, and become frontrunners, consisting of three specific policies:  

The quantity and quality of SMEs significantly determine the internal strength of the economy. According to data from the Global Startup Ecosystem, the number of startups in Vietnam reached over 3,800 in 2023, but only a small fraction can evolve into large enterprises due to a lack of capital, infrastructure, and government support. Traditional enterprises face similar challenges, as many medium-sized enterprises “cannot grow” or “do not wish to grow,” which experts have highlighted for years, associated with limitations related to specific support policies, general infrastructure, and the business environment.  

Improving infrastructure and business environment  

Establishing a cohesive national infrastructure and enhancing a transparent business environment are critical factors for sustainable growth and breakthrough opportunities for SMEs.  

Thailand has invested over $40 billion into developing the Eastern Economic Corridor (EEC) to create a leading industrial and logistics center in the region. Singapore has also prioritized modernizing its port systems, leveraging regional and international transshipment advantages for years. Neighboring countries are also focusing on addressing "infrastructure challenges."  

Vietnam has many advantages, including its coastline, geographical features connecting various regional infrastructure routes, and abundant resources for renewable energy sources.  

Strong investment in fundamental national infrastructure should encompass not only roads but also railways, waterways, and modern seaports to ensure a favorable interregional logistics and transport network, as well as energy centers linked to the goal of establishing specialized production centers, thereby providing significant advantages for SMEs.  

The robust development of another special type of infrastructure - digital infrastructure, which the General Secretary and President highlighted as a central goal for the upcoming period - is highly valued by the SME community. This foundation is crucial for genuinely improving the business environment, enhancing competitiveness, and optimizing operations for enterprises. It is also the basis for the green development trend that has now become a global standard, which cannot be altered or reversed. 

Financial support and access to capital  

One of the most significant challenges faced by enterprises in Vietnam, particularly SMEs, is accessing capital. Malaysia has successfully implemented the SME Bank model, providing preferential loans and financial support for SMEs.  

Vietnam could explore the establishment of a similar specialized banking system while creating policies to encourage investments in SMEs from private equity and international financial organizations.  

Focus on innovation and technology  

Innovation and technology must become top priorities in enterprise development strategies and human resource training strategies. The government needs to establish R&D (Research and Development) support funds and encourage enterprises to adopt advanced technologies, as Singapore and Malaysia have successfully implemented. This focus is essential for Vietnamese enterprises to enhance their competitiveness and establish a global presence.  

We already have policies and regulations related to science and technology funds and numerous guidelines for encouraging research and innovation activities, but implementation remains superficial, with many bureaucratic processes being impractical, making it challenging for enterprises to execute these initiatives.  

The second group of policies aims to promote large enterprises, enhance their international standing, and establish national brands. This policy group also consists of three specific policies.  

Financial incentives for R&D  

Technology innovation and investment in R&D are critical for large enterprises to maintain their competitive edge. The government can provide financial incentives through tax benefits for R&D projects in high-tech and emerging fields.  

Singapore serves as a prime example with its implementation of the “Productivity Solutions Grant” program, which offers financial support for large enterprises to promote advanced technology R&D.  

Simultaneously, favorable mechanisms are necessary to integrate public-private resources in this area, as the budget allocated for fundamental research through government agencies is not well aligned with enterprise budgets for R&D investments. The coordination mechanism and commercialization of research results currently focus on “protecting state budget expenditures” rather than “supporting enterprises,” resulting in a lack of engagement from businesses.  

Supporting entry into global supply chains  

While we have campaigns to attract "eagles" and foreign direct investment (FDI), there is still a lack of initiatives to support large Vietnamese enterprises in expanding internationally. Large enterprises require special support to engage in global supply chains through free trade agreements (FTAs). These policies must concentrate on facilitating Vietnamese enterprises in building international business networks, enhancing brand visibility, and expanding their presence in new markets.  

For instance, Malaysia's MATRADE program has successfully assisted large enterprises in accessing and penetrating over 40 countries. Similarly, South Korea's national promotion programs have enabled its large enterprises to expand significantly into various countries, including Vietnam, leading to a series of its SMEs creating a “new era” for Korean products and services in these markets.  

Vietnam’s large enterprises, such as Vingroup, Viettel, and Vinamilk, have made commendable efforts to grow domestically; however, for them to transform into international brands, targeted support policies and programs at the national level are imperative.  

Training high-quality, specialized human resources  

A recent survey conducted by Committee IV in 2022 and various related studies indicate that enterprises, particularly large and medium-sized ones, are facing fierce competition to recruit highly skilled and specialized personnel. This challenge is prevalent across numerous businesses and economies globally.  

High-quality human resources have become a vital factor determining the competitiveness of enterprises and the economy. Vietnam possesses opportunities and advantages for developing this talent pool.  

Policies must focus on training and developing management, technical, and high-tech personnel, in conjunction with international cooperation programs, not solely through training partnerships but also through supplying human resources to international enterprises. Enhancing local human resource capabilities through campaigns to “integrate into the global production and business networks” is a recommended approach by many experts.  

In the short term, transparent policies aimed at attracting high-quality international human resources into Vietnam should be prioritized. Thailand has successfully implemented the Thailand Elite program to draw international talent, thereby supporting domestic enterprises in cultivating high-quality human resources. Several countries in the region have also introduced special visa policies to compete for this talent pool.  

Activating policies for forming and promoting large enterprises  

Activating policy orientations aimed at forming and promoting large enterprises is a complex endeavor. The government can initiate this by employing a “contracting” mechanism to assign large enterprises specific national "grand challenges," such as the recently discussed North-South high-speed railway project or other significant energy and digitization infrastructure projects, accompanied by requirements and conditions to maximize domestic value chains.  

This strategy not only creates opportunities to test new technologies, enhances management capabilities, and meets national requirements but also incentivizes large enterprises to invest significantly in R&D, establishing leadership in certain chains, thereby building competitive advantages on the international stage.  

The government could also explore special incentive mechanisms, such as tax reductions or financial support for enterprises undertaking such projects. South Korea has successfully implemented this strategy by entrusting Samsung and Hyundai with national projects in high technology and heavy industry, allowing these enterprises to flourish and evolve into internationally recognized brands.  

- Thank you for sharing your insights in this interview with VietNamNet!

Binh Minh