​Vietnam pushes for homegrown business ‘eagles’ to drive growth

​Vietnam pushes for homegrown business ‘eagles’ to drive growth

Ho Chi Minh City is taking steps to create a thriving business ecosystem, shifting from merely attracting foreign investment to nurturing domestic enterprises capable of driving long-term economic growth.

Workers operate chip production equipment at Dien Quang High Tech Company Limited at Saigon High-Tech Park in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre

At the Business Coffee Program organized last week by the Ho Chi Minh City Business Association, business leaders and experts emphasized the need for urgent action to remove administrative obstacles, improve capital access, and implement policies that support local businesses in scaling up.

Their calls for reform align with recent remarks from General Secretary To Lam, who on March 7 reaffirmed that the private sector is the backbone of Vietnam’s economy.

His message has fueled discussions about how to foster an environment where Vietnamese enterprises can compete on both regional and global stages.

Breaking barriers for small businesses

Despite Ho Chi Minh City’s reputation as Vietnam’s economic engine, the contrast between small household businesses and large enterprises remains stark.

According to Ly Kim Chi, chairwoman of the Ho Chi Minh City Food and Foodstuff Association, the city currently has 230,000 businesses and 400,000 household enterprises.

Many household businesses are profitable yet hesitate to transition into formal companies due to bureaucratic hurdles.

"Government policies should encourage household businesses to shift to corporate models by providing support in tax procedures and administrative processes," Chi said.

"In the era of a digital economy, administrative procedures must be digitized, and reporting systems must be as simple and convenient as possible."

For larger enterprises, navigating bureaucratic obstacles remains a challenge.

Tran Quoc Bao, chairman of the Ho Chi Minh City Real Estate Club, noted that real estate projects often require approvals from six to eight different departments, with each step taking months.

Similarly, Duong Thanh Thuy, vice-chairwoman of Trung Thuy Group, pointed out that frequent inspections and audits add to operational costs, forcing businesses to focus on compliance rather than growth.

Developing ‘eagle incubator’

The private sector contributed 42-45 percent of Vietnam’s GDP in 2023, generating 8.6 million jobs and accounting for over 70 percent of total exports, according to government data.

Private enterprises also demonstrated a return on investment 30-50 percent higher than state-owned firms, with labor productivity growing 6-8 percent annually.

Despite these strengths, economist Tran Dinh Thien, former director of the Vietnam Institute of Economics, argued that incremental improvements would not be enough for Vietnam to achieve its ambitious economic targets.

“We cannot simply wait for ‘foreign eagles’ to build their nests here,” Thien figuratively said. “Ho Chi Minh City must create an environment where our own ‘eagles’ can thrive.”

He emphasized the importance of collaboration between large and mid-sized firms, forming strong business ecosystems that attract both investment and talent.

Vo Tri Thanh, president of the Institute for Brand Strategy and Competition Research, echoed this view, stressing that Vietnam needs game-changing policies to support local enterprises that can drive industry-wide growth.

Currently, non-state enterprises represent 61.2 percent of total investment capital, or approximately VND2.255 quadrillion (US$88.3 billion), demonstrating their central role in the economy.

"Ho Chi Minh City must not just wait for central government directives. It must also take the lead in policy innovation and act as an incubator, fostering groundbreaking initiatives beyond Resolution 98 and positioning itself at the forefront of reform," Thanh said, referring to government rules that grant more special mechanisms for the city to grow.

Unlocking resources for private enterprises

Nguyen Van Duoc, chairman of the Ho Chi Minh City People’s Committee, was committed to addressing project bottlenecks and unlocking new investment opportunities.

“The city will establish a multipurpose high-tech center, an AI and innovation hub, and a big data center, all located in Thu Duc City, as part of the expanded Ho Chi Minh City High-Tech Park,” Duoc announced.

He also stressed that the city is shifting from a bureaucratic administrative model to one that prioritizes business services, ensuring that companies have the support they need to scale up.

On the financial side, Nguyen Quang Thanh, Deputy CEO of the Ho Chi Minh City State Financial Investment Company, noted that firms can access zero-percent interest loans of up to VND200 billion ($7.8 million) under the city’s investment stimulus program.

For larger projects, loans of VND500 billion ($19.6 million) to VND1 trillion ($39.2 million) are available, with repayment terms of up to seven years, enabling companies to expand operations and drive growth.

Building roadmap for private sector

Statistics show that the private sector employs 85 percent of Vietnam’s workforce, making it crucial for job creation and economic stability.

To maximize its potential, Vietnam must implement a structured roadmap, combining administrative reforms with a support ecosystem that fosters innovation, competitiveness, and industry leadership.

Experts suggest that the 'Eagle Incubator' model, which prioritizes developing strong domestic conglomerates while integrating SMEs into global value chains, could position Vietnam as a key player in the international economy.

Tuoi Tre News