VN firms urged to ramp up efforts to buffer against global instability

VN firms urged to ramp up efforts to buffer against global instability

Vietnamese enterprises will have to pull up their socks, become more innovative and competitive if they are to successfully meet the challenges that loom large in the coming years, experts said at the Viet Nam CEO Forum held here on Wednesday.

Le Dang Doanh, former director of the Central Institute for Economic Management, said the world economy is showing signs of recovery, but it is very slow and there is latent instability in the process.

In the domestic market, Viet Nam is facing low economic growth, serious state budget deficit and other problems, he told the forum organised by the Young Business People Association, the Leading Businessmen Club, the 2030 Businessmen Club, the Sai Gon Business Club and the Association of Vietnamese High Quality Goods Producers.

It brought together more than 800 CEOs and leaders from Vietnamese companies, top economists and policy makers to network and exchange ideas on emerging trends that are shaping the business environment and future directions.

He said the country started to restructure its economy two years ago, but the exercise has not achieved its targets in all fields.

"Difficulties will continue for the next two years if the country does not take measures to speed up economic restructuring process," he said.

For instance, the Trans-Pacific Partnership Agreement (TPP) that is being currently negotiated will not only bring opportunities but also serious challenges for the country and its enterprises.

While the TPP can open more export opportunities for Vietnamese products, local firms will face drastic competition in both local and international markets, Doanh said.

This requires the country and its enterprises to work harder on reforming themselves towards being able to fully utilise advantages that the agreement generates, he said.

Innovation will be the main driving force to help Vietnamese enterprises develop, he said, adding that the competitiveness of the economy and enterprises should be improved significantly.

Agreeing with Doanh, Nguyen Quan, Minister of Science and Technology, urged enterprises to set aside a part of their profits to set up a fund to upgrade technology and train workers to improve their skills. He said this was necessary if local firms are to create highly competitive products.

"Currently, among 12 countries participating in the TPP, Viet Nam has the lowest level of technology, therefore if we do not reform, we will lose even in our home ground," the Minister warned.

Pham Phu Ngoc Trai, chairman of the Global Integration Business Consultants, said international integration challenges in the new business environment require firms to quickly develop the ability to adapt to new situations. They should accept change as natural and convert challenges into opportunities, he said.

While echoing previous speakers, Phan Quoc Cong, general director of the International Consumer Products Corporation, also struck a more positive note.

As a company working in the consumer goods sector, his firm has encountered fierce competition from multinational companies, forcing it to make "relentless changes" to meet market demand and maintain its competitiveness.

"Most of the Vietnamese firms are small and medium d ones, but we should not feel inferior, with flexible operations and innovations we can hold our own against bigger, more experienced firms," Cong said.

Mai Liem Truc, former standing deputy Minister of Post and Communications, said that local firms should enhance the use of Information Technology in their production and management.

HR challenges

In discussions about human resource management, forum delegates agreed that local firms were facing twin challenges: the lack of talent; and the ability to attract and retain talent.

Cong said enterprises have high demand for high-level positions, but local talent is not available, so foreigners had to be hired.

Pham Thi Viet Nga, Chairwoman of the Hau Giang Pharmaceutical Joint Stock Co, said the biggest challenge she sees for her company in the integration process is that her staff either cannot keep pace since they are already very busy with work; or that they feel pleased with what they have and are not driven to learn and achieve more.

But in order to retain the talent they have, firms should pay attention to building a company culture that connects everyone, she said.

Cong said many people think that to retain talent they just need to pay higher salaries, but this is not enough, a good working environment is very important.

He advised SMEs to join hands to develop a quality human resource base for their future development.

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