Innovative Solutions for Vietnam’s Supporting Industry

 

Recently, Japanese Mitsubishi Research Institute has proposed Vietnam’s Ministry of Planning and Investment to consider applying the model of Local Public Technology Centre (LPTC) in Vietnam to support the development and participation of small and medium-sized enterprises (SMEs) in the value chain in supporting industry.

LPTC is a successful model in Japan, thus promoting successful participation of SMEs in the chain to develop supporting industry. This is a model of public technology centre that can help SMEs access advanced technologies and receive support from the state in the development of new products, improve competitiveness. Japanese LPTC has function of providing testing services and technical consulting. In particular, LPTC conducts research & development (R & D); gives technical advice; testing; provides human resources development consulting through seminars and training; provides information and connectivity. LPTC is designed to develop local industries in the fields of agriculture, forestry, fisheries, resources and environment. There are about 600 LPTCs in Japan, of which 130 are equipped with industrial development systems such as 3D measuring machines; testing machines, etc. Each LPTC has about 50 -100 staff (particularly in Tokyo 326 staff). Human resources are the technical experts sent by the Department of Industry of Japan. The LPTC receives the support of local authorities and agencies to manage and operate.

According to Dr Nguyen Thi Tue Anh, Deputy Director of Central Institute of Economic Management (CIEM), the environment in Vietnam is quite different from Japan’s. In Japan, when one big enterprise is founded, a lot of small household businesses become its subcontractors and they grow up. Along with that, subjects, fields of supporting and policies and institutions are clearly defined by the Government with key focus.

In Vietnam, in terms of linkage among businesses, we can see the gap between businesses in supporting industries in Vietnam are relatively fragmented; each business takes care of one area and there is virtually no linkage among small businesses so they are not eligible to participate in the value chain of large businesses to grow. There are many policies for SMEs, but without focus, which has led to the fact that all of these policies do not support the correct issue most companies need. Support programmes are now full of tax incentives, credit, human resources, and encourage supporting industry but they are not new or different from the incentives available in other legal documents. Linkages between businesses and management agencies, research institutes and training facilities are not close, failing to meet the actual needs of enterprises.

To answer the question if the model could be applied in Vietnam, Ms Tue Anh said that the feasible plan is to upgrade the centres to support businesses. In 63 provinces in the country, each has two business support centres under the Department of Planning and Investment and the Department of Industry and Trade. The upgrade should focus on the initial investment of equipment, capacity building assistance for the centres. Even localities should work together to establish supporting centres to take the advantage of the resources.

Vietnam's SMEs are very small, very weak and inadequate of technical capacity and do not meet the scale and capacity for high-tech applications. So it is necessary to focus on solving problems of technical assistance to businesses, helping them to gradually expand capacity to upgrade scale. Thus, we can receive technology applications and gradually involve in mass production chain of large enterprises.

According to Prof Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), with approximately 60 percent of all enterprises in the country in areas close to the administrative centres, Hanoi and Ho Chi Minh City are suitable sites for the establishment of LPTC.

It is known that in the coming time, Vietnam will continue to work with Japanese experts to clarify the model and how to establish LPTC to support SMEs in the field of supporting industry in Vietnam.

Nguyen Thanh - VCCI News

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