Support industries vital for global integration

What is your evaluation of the linkage model between foreign direct investment (FDI) enterprises and Vietnamese companies?

Most FDI enterprises invest in Vietnam to take advantage of investment incentives, low labor costs, and other advantages offered by our various free trade agreements (FTAs). As a result, they do not pay attention to the formation of domestic supply chains and have only a loose connection with domestic enterprises, which does not create spillover effects between the FDI sector and the domestic economic sector.

Currently, with the increase of per capita income, Vietnam’s advantages of low-cost labor are no longer sufficient magnets for large FDI enterprises. Vietnam must therefore adopt breakthrough policies, build sustainable cooperation and connection models between the government, FDI enterprises and Vietnamese companies.

What should the government and businesses do to promote the development of support industries?

The government needs to improve the capability of Vietnamese enterprises by adopting solutions on business connections, market information, human resource development, etc. These long-term goals need to be implemented simultaneously to raise awareness of related parties and the supporting industry community towards long-term and sustainable development goals.

Vietnamese enterprises also need to be proactive and make efforts to access the government's support programs, as well as equip themselves with new technologies and innovative management methods to optimize production and improve competitiveness, in order to manufacture products of high technology content and high added value.

FDI enterprises should continue to actively coordinate with the Vietnamese government and enterprises in sharing information, support training, transferring technology, and facilitating the participation of Vietnamese enterprises in long-term, sustainable supply chains.

What specific opportunities did the selection of six prioritized industries in the supporting industry development strategy create for foreign investors and Vietnamese enterprises?

The selection of the six prioritized industries following Decree 111/2015/ND-CP, including textiles and garments, footwear, electronics, automotive, mechanical and high-tech industries, reflect government determination in these fields. This is one of the most important solutions for Vietnam to affirm its position in the global supply chain.

In addition, the selection is a signal and basis to attract and encourage FDI enterprises to invest in or expand investment in the above-mentioned industries. Particularly, it will give priority to projects of high technology content that use advanced and clean technologies, adopt modern management and have spillover and connective effects with global production and supply chains.

In 2023, the promotion of domestic support industries is expected to help the Vietnamese industrial sector effectively participate in the global supply and value chains.