Labour productivity has been considered a key factor for the country to improve its industry, do you agree?

We can’t just talk about how labour productivity is low and that we need to improve it. We need to act. In my opinion, we need a strategy for the development of the processing and manufacturing industry, even for sectors that already have high labour productivity and high growth like the food processing industry, cigarette production and metallurgy manufacturing.

Viet Nam also needs to adopt a suitable strategy to promote the development of low productivity industries but with high labour productivity, like manufacturers of electronic spare parts, computers and optical devices.

If we want to have a development strategy for the industry of processing and manufacturing, we should classify them into groups with high labour productivity. Why? It is very simple as the growth of our national economy depends heavily on the labour productivity from each sector.

Do you mean that to achieve sustainable processing and manufacturing Viet Nam needs to carefully calculate the productivity of each sector?

When we talk about labour productivity, we have to mention total factor productivity (TFP) from each sub sector or the efficiency of all inputs to a production process which usually comes from technological innovations or improvements.

In other words, TFP is essential in labour productivity.

For example, in the past the processing and manufacturing sector recorded only 2.4 per cent growth. Now with science and technology the sector achieved 13.56 per cent growth in the first quarter of 2018.

What industrial sector should Viet Nam focus on to improve its labour productivity?

It is very difficult for me to answer this question. However, I think what we should do now is to focus our in-depth research on sub-sectors to find out which have potential for improving their labour productivity. From that, we’ll then develop suitable solutions.

For example, advanced science and technology has become a driving force in raising labour productivity in our processing and manufacturing sectors. However, labour efficiency has remained low and has even declined.

Another point I want to mention is that the business environment has improved through the application of advanced science and technology. The renovation of machines and equipment as well as workers and management boards’ skills has also helped.

Last but not least is the connectivity between Vietnamese enterprises with foreign invested enterprises and between job training centres and enterprises.

For enterprises with more than 300 workers, they should have their own training centre. If a firm is unable to retrain its workers, the company should plan to send some 15 per cent of their workforce to attend training workshops a year.

Viet Nam has opened its market for the processing and manufacturing sectors. However, in my opinion, we should also open the market for the service sector while improving international integration and institutional reform in order to push other sectors to follow suit.— VNS