“To have more and more thriving businesses that ‘sail to the larger seas,’ it not only requires the support of the government, a safe and favorable legal environment, but also the efforts of each business in enhancing the quality of human resources, updating business models, and increasing investment in research and development.” 

Professor Nguyen Duc Khuong, Chairman of AVSE Global and CEO of EMLV Business School (Paris, France), expressed his views to further promote the development of the Vietnamese entrepreneurial community.

 

In an interview with Financial Investment – VietnamFinance on the occasion of Vietnamese Entrepreneurs’ Day on October 13, Professor Nguyen Duc Khuong evaluated that the Vietnamese business community is becoming increasingly diverse, participating in all sectors of economic and social life, accompanying the country on the journey of reconstruction after the war and towards prosperity. After nearly 40 years of renovation, transitioning to a market-oriented socialist economy with gradually improved, modernized regulations and standards, businesses have also undergone positive transformations, being proactive and flexible in responding to different economic contexts.

 

In 2015, the country had approximately 442,400 businesses, and as of September 30, 2023, statistics from the General Statistics Office show that there are 881,229 active businesses nationwide. The government has set a target of 1.5 million businesses by 2024, contributing about 65-70% to the country’s GDP. While this is an ambitious goal, it is not unattainable.

 

In terms of quality, many businesses have been innovating their management methods, business models, and enhancing innovation to better meet market demands both domestically and internationally. There are now large economic corporations that have cooperated with global partners, actively penetrating international markets.

 

Notable examples include Vinamilk’s investments in the dairy industry in the United States, Laos, Cambodia, and the Philippines; VinGroup, with the VinFast automotive brand, has opened stores and service centers in the United States, Canada, Germany, France, and the Netherlands. Vietnamese agricultural businesses are gradually entering the global market with high-quality products such as rice, coffee, fruits, and cashews. Some banks have expanded their market share abroad through branch openings and 100% capital-owned banks, for example, BIDV with offices in Cambodia, Laos, Russia, and the Czech Republic.

 

Vietnamese businesses are also making new strides in updating global trends and preparing for the challenges of the era. Among the most important is understanding and applying the corporate social responsibility (CSR) evaluation system. This serves the goal of sustainable development for the economy and meets the requirements of partners in developed countries such as the United States and the EU.

 

Furthermore, some businesses are placing greater emphasis on addressing climate change. Vinamilk is the first dairy company in Vietnam to have a factory and farm certified as carbon neutral, and Gia Dinh Group has collaborated with SEP Group (South Korea) to build the first “Net-zero” industrial complex in Vietnam in Binh Duong. The digital transformation and application of digital technologies (AI, Big Data, Robotics, etc.) are taking place in most types of businesses and at various levels. Vietnam currently has over 64,000 digital technology businesses, an increase of 5,600 compared to 2020, offering nearly 1,000 ICT products and services under the Vietnamese brand.

 

For the development of businesses, the role of the government is particularly crucial. The government not only provides direction but also accompanies and supports businesses in overcoming economic challenges. The commitment of the government is evident from various perspectives.

 

Positive changes in major legal policies related to businesses since the 1990s have created an increasingly favorable development space for businesses. Practices such as “asking for favors” and bureaucratic hurdles in business establishment and operation have gradually diminished. The Business Laws of 2005, 2014, and the current Business Law of 2020 also reflect a shift in legislative thinking, aligning more with market mechanisms and providing better conditions for businesses as well as regulatory agencies while safeguarding the legitimate rights of market participants. In terms of outbound investment by businesses, the Investment Law of 2020, compared to the 2014 Law, introduces new provisions to enhance transparency and promote outbound investments.

 

Vietnam is a member of numerous bilateral (VKFTA, VJEPA, etc.) and multilateral (AFTA, CPTPP, EVFTA, etc.) Free Trade Agreements (FTA). As of June 2023, Vietnam has signed 17 FTAs and is negotiating 4 more. These FTAs not only attract foreign direct investment (FDI) into Vietnam but also create opportunities for Vietnamese businesses to expand into foreign markets. Additionally, Vietnam has established strategic partnerships with 5 countries worldwide, most recently with the United States.

 

The government pays close attention to the business environment during challenging periods. For example, during the recent Covid-19 pandemic, the government enacted tax, fee, and land rent relief policies to promptly alleviate difficulties for businesses and support the resumption of economic activities. The central bank also implemented timely interest rate support measures. As a result, Vietnam was recognized for effectively dealing with external negative impacts, ensuring social welfare, and being among the nations with the highest growth rates.

 

 

I understand that in Vietnam, there are still opinions suggesting that the current legal system for business is not sufficiently conducive to the development of the business community. These concerns are somewhat validated when looking at Vietnam’s ranking in the World Bank’s Doing Business 2020 report, where the country is placed 70th out of 190 nations. This is directly related to issues such as policy inconsistencies, overlapping policies, and the speed of policy enforcement, which lead to challenges and complexities that many businesses often face.

 

An important point to note is that evaluating and addressing this issue requires a deep understanding of the country’s policy and legal context. The road ahead is certainly long, but the crucial thing is continuous learning and a need to change our approach to governance more comprehensively.

 

 

Firstly, a review of the policies and regulations that have been issued is needed to make efforts to minimize overlap and inconsistency in policies, which can cause confusion or inaccurate understanding from businesses. Further simplifying administrative procedures for business activities and employing more digital platforms and online systems to expedite these procedures, making them more cost-effective.

 

Enhancing transparency and communication through establishing clear and transparent information channels between government agencies and businesses. This ensures that businesses are informed about support policies and the procedures to access them. Regular updates and communication about changes in policies and regulations should also be provided.

 

Next is improving access to finance for Vietnamese businesses. This remains a significant challenge as the majority of businesses in the country are small and very small enterprises. Developing a robust and comprehensive financial system to provide easier access to credit for businesses would contribute to solving this issue. This could include specialized loan programs (for example, for innovation, research and development, or new technologies) and promoting alternative financial models, such as venture capital and community fundraising.

 

And of course, investing in education and skill development is crucial. The government should invest in vocational training programs and initiatives to equip individuals with the necessary skills to adapt to the changing business landscape. This not only benefits businesses but also contributes to the overall economic development of the country. Interdisciplinary knowledge, multifunctionality, and soft skills will be indispensable combinations for workers and managers in the 2030 vision.