Low level workforce hampers garment, textile digitalization

Investment in modern machinery has become an urgent need

Difficulties

Insufficient and unqualified human resources remain a major problem faced by domestic textile and garment enterprises in coping with the digital revolution. A survey of 300 enterprises by the Vietnam National Textile and Garment Group (Vinatex) showed that workers whose education levels are high school or below accounted for 84.4 percent of the surveyed companies’ workforces, while those with university and postgraduate degrees represent only five percent, and college graduates 10.6 percent. Dr. Hoang Xuan Hiep from the Hanoi Industrial Textile Garment University said that textile and garment enterprises find it hard to develop in the context of Industry 4.0 with such a low-level labor force.

The survey also revealed enterprises’ levels of readiness for digital development. Fiber companies were ranked the highest, scoring 3.02 points on a 5-point scale. However, fiber enterprises have just partially invested in science and technology and have not formulated long-term strategies and targets.

Hiep believes that successful Industry 4.0 application is crucial for businesses to gain a firm foothold in the market. Capital is a problem for small enterprises, he said. Only garment enterprises with capital of more than VND50 billion and fiber producers with capital of over VND100 billion are able to procure new technologies, but these enterprises account for only 15 percent of all domestic textile and garment enterprises, Hiep said.

Lack of knowledge of high technology and trained human resources, and inconsistent state policies, are other major barriers for Vietnamese textile and garment enterprises to approach Industry 4.0-based development.

Practical support

While Industry 4.0 will create many new trends in textile and garment production and trading activities, customers and business environment are the most important factors for Vietnam’s textile and garment industry, said Vinatex General Director Le Tien Truong. Businesses should consider technological investment in accordance with their financial capability, he said.

Policy-related breakthroughs are also needed for Vietnam’s textile and garment industry to reach Industry 4.0-based development. Businesses investing in high and clean technology and energy efficiency are allowed to use before-tax profit for and are exempt from corporate income tax in that investment. They can also enjoy preferential tax and land policies.