Vietnam boosts domestic support industries

06:00 | 23/03/2021 Industry

(VEN) - The development of supporting industries (SI) is one of the most important solutions for Vietnam to attract foreign direct investment (FDI) and accelerate technology acquisition and transfer.

vietnam boosts domestic support industries
Practical and timely policies will promote the development of support industries

The Ministry of Industry and Trade (MoIT) has implemented SI development programs in order to help Vietnamese businesses apply advanced management systems and standards, improve productivity and product quality, and deeply engage in the global production network and value chain.

Due to the dependence of Vietnam’s manufacturing and processing industries on raw materials and components from overseas suppliers, especially in key industrial sectors such as electronics, textile, leather and footwear, automobile assembly, domestic industry sectors have encourtered numerous difficulties in ensuring input in the context of the Covid-19 pandemic.

According to Vu Kim Hung, deputy head of the Science Institute for Small-and-Medium Enterprises Management (SISME), due to small scale with limited production management capacity, SI enterprises in Vietnam meet difficulties in accessing credit sources. Chair of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said mechanisms and policies are required to develop SI, strengthen links, make the most of newly opened markets and free trade agreements (FTAs), expanding supply chain and diversifying the market. Specifically, national industrial policy should focus on key industries and fields. In addition, it is necessary to develop micro, small and medium enterprises (SMEs) as well as domestic private enterprises, and promote the reform of state-owned enterprises (SOEs).

Practical solutions for SI development

Government Resolution 115/NQ-CP dated August 6, 2020 on solutions to promote SI development has opened a window of opportunity for Vietnam to welcome large investment capital generated by the shifting trend of global value chains as well as new industrial models.

The MoIT has inaugurated the Vietnam-Korea Technological Consultancy and Solution Center (VITASK) and the Molding Technical Center to help Vietnamese enterprises deeply participate in the global supply chain, as well as meet the needs for highly qualified human resources and become potential suppliers of Korean businesses in Vietnam.

Industry and Trade Minister Tran Tuan Anh said these centers not only introduce technology, support technology access for businesses through international cooperation and government policies, but also support research and development, creating high added value for SI products.

Resolution 115/NQ-CP has set a goal for Vietnamese enterprises to produce highly competitive SI products by 2025, meet 45 percent of the essential needs for domestic production and consumption, and account for about 11 percent of total industrial production value. In addition, about 1,000 enterprises are capable of directly supplying assembly businesses and multinational corporations operating in Vietnam, with domestic enterprises accounting for about 30 percent.

Lan Anh & Quynh Nga