Most private firms in Vietnam still use machinery made in 1960s-70s: report
Most private firms in Vietnam still use machinery made in 1960s-70s: report
Although it is already 15 years into the 21st century, most private Vietnamese businesses are still using machinery made somewhere in the latter half of the previous century.
A Ministry of Planning and Investment official shocked a conference in Hanoi on Tuesday with that comment.
The technology and machinery of these enterprises are two to three generations out of date compared to their global peers, Bui Thu Thuy, deputy head of the ministry’s Agency for Enterprises Development (AED), said at the event to unveil the Business Indexing 2014 report.
“Seventy-five percent of the machines and technology production lines of these firms were made in the 1960s-1970s,” Thuy said, adding that “50 percent of them are refurbished.”
As many as 98.6 percent of private Vietnamese businesses are of small or medium scale, Thuy said, citing statistics from the report, prepared by the local Institute for Business Research and Development (INBUS).
Of these, only 1.6 percent are medium-d businesses, whereas the remaining are super-small and small firms, she added.
The official cited another finding from the report as saying that only 30 percent of the small- and medium-d enterprises have access to bank loans, so most private firms “are financially unable to invest in machinery and technology upgrades.”
The Vietnamese firms only earmark 0.2 to 0.3 percent of their revenue for technology enhancements, whereas the figures in India and South Korea are five percent and 10 percent, respectively, Thuy added.
“Only around 0.1 percent of Vietnamese businesses hire a consultation service when buying new machinery and technology,” she said.
The hi-tech area only accounts for 20 percent of Vietnam’s private sector, while the respective figures in Singapore, Malaysia, and Thailand are 73 percent, 51 percent, and 31 percent, according to the AED.
“Such numbers rank Vietnam 102nd out of 148 global economies, and ninth out of ten ASEAN countries,” Thuy said.
