Strengthening competitiveness of SMEs

06:00 | 05/09/2020 Companies

Lacking advantages in terms of capital and production potential, Vietnamese small and medium-sized enterprises (SMEs) need substantial support to improve their competitiveness, especially in the context of today's strong global integration.  

In order to open markets for Vietnamese goods, the Hoa Binh Group used an area of ​​25,000 square meters at Hoa Binh Green City building in Hanoi’s Hai Ba Trung District as a trade center and supermarket (V + Center) for Vietnamese businesses to use free of charge. In 2018, Nguyen Huu Duong, Chair of the management council of Hoa Binh Construction Group, provided 1,000 square meters of space for Pico Electronics Center and supported Vietnamese enterprises in regaining market share.

According to Nguyen Huu Duong, whoever owns the trading system will regulate production. This free space rental helps to support domestic businesses that have a place to display and sell their products.

Hoa Binh Group is one of the enterprises that have made efforts to help SMEs dominate the market. According to Dr. Nguyen Van Than, Chair of the Vietnam Association of Small and Medium Enterprises (VINASME), this support is vital for Vietnamese SMEs which have limited capital.

strengthening competitiveness of smes
Supporting SMEs to improve competitiveness

Than also said the campaign has helped Vietnamese enterprises dominate the domestic market and penetrate deeply into the international market over the past decade.

High costs, low capital

However, 96 percent of Vietnamese enterprises are SMEs that face many difficulties such as access to capital, high taxes, administrative procedures and other costs to access land resources. In addition, construction licensing costs, licensing fees for billboards and business space rentals are quite high due to high real estate prices, limiting the campaign’s results.

The VINASME has deployed many solutions to support businesses, such as connecting enterprises to improve competitiveness, supporting product promotion, and proposing solutions to relevant authorities.

The Hanoi Small and Medium Enterprises Association (HanoiSME) also organizes activities to motivate businesses. Specifically, HanoiSME is providing training and fostering knowledge in order to improve companies’ professional qualifications and legal knowledge. The association coordinates with departments and agencies not only to remove difficulties for businesses in terms of capital, market, taxes, customs and administrative procedures, it also helps enterprises participate in activities to stimulate consumer demand and stabilize prices. In coordination with the Department of Industry and Trade, the association organizes supply-demand conferences and international economic integration programs for key industrial products and supporting industry. HanoiSME also coordinates with the Management Board of Industrial, Export and Processing Zones, trades with Vietnamese and FDI enterprises in industrial zones to improve enterprises capacity and trade promotion.

The VINASME proposes solutions and recommendations to the Party and the State on abolishing overlapping administrative procedures in order to facilitate the production and trading of domestic goods. In addition, the VINASME develops mechanisms and policies to support businesses, strengthens the building of retail distribution systems, especially in remote and rural areas, and builds Vietnamese trademarks and services in order to create favorable conditions for Vietnamese goods to reach consumers.

According to Mac Quoc Anh, Vice Chair of the Hanoi SME Association, the city needs effective loan programs for small businesses, new forms of lending and breakthrough solutions to help businesses access land resources and premises for production and business, as well as industrial clusters for small and medium enterprises. In addition, the city should strengthen information systems, connect information systems between state agencies and business associations, and promote trade and investment for small and medium enterprises.

Experts advise that in addition to authorities’ support, enterprises and producers need to constantly innovate in production and business, focus on building competitive, high quality Vietnamese brands to conquer domestic and international markets.

Bao Ngoc