Support industries urged to invest in technological production lines
Support industries urged to invest in technological production lines
According to Dr. Le Dang Doanh, former Director of the Central Institute for Economic Management under the Ministry of Planning and Investment, Vietnamese firms seeking to develop supporting industries and participate in the global value chain must invest more in technological production lines.
Vietnam is considered to have many opportunities for supporting industry development given to significant foreign direct investment (FDI) inflows from the world's leading corporations, among them Samsung, Canon, and Honda. To support the policy of product localization in Vietnam, many foreign corporations have launched connection programs that facilitated participation of domestic supporting industry enterprises as spare parts and accessories suppliers.
In April 2018, the Ministry of Industry and Trade (MoIT) cooperated with the Samsung Group to organize the training of Vietnamese consultants in manufacturing innovation and quality improvement. The objective of the program was to train 200 qualified Vietnamese consultants to advise and retrain enterprises in the supporting industry. In 2020, the MoIT, Bac Ninh Provincial People's Committee and Samsung Vietnam signed a Memorandum of Understanding on a program to help Vietnamese business join the global value chain.
Enterprises need to access new technological lines faster |
In addition, the government, the MoIT and many localities across the country have adopted policies to facilitate the development of supporting industry enterprises. Specifically, in June 2021, the Prime Minister issued a decree supplementing provisions on corporate income tax incentives for supporting industry projects. On that basis, the quantity and quality of supporting industry enterprises have improved. Some domestic supporting industry enterprises have started using modern management tools in production, meeting international standards and becoming suppliers for multinational corporations.
Sci-tech gaps
However, despite the progress, Vietnam's supporting industry is still hobbled by shortcomings and limitations. Many supporting industries in electronics, mechanics, automobile manufacturing and assembly, textiles, footwear, and more have been given incentives for better development but have not yet achieved the expected results. Economic expert Le Dang Doanh explained that the majority of supporting industry enterprises in Vietnam are of small scale, with modest financial capacity, and lack high-quality human resources. There is a big difference in their science-technology level compared to other enterprises in the world.
In order to solve the problem, in addition to improving the quality of human resources, Le Dang Doanh said that domestic enterprises need to pay attention to meeting requirements in terms of quantity, quality and delivery time. They also need to strengthen links with domestic and foreign research institutes and foreign corporations to access new technological production lines faster, he added.
According to experts, many supporting industry products of Vietnam are simple, with low technology content and low value in the product value structure, leading to a huge import surplus of raw materials, components and spare parts, and a low localization rate.
