Businesses need to increase adaptability to join the global supply chain

DNHN - Although the supply chain has gradually been restructured, in reality, most of Vietnam's industrial enterprises are still small and fragmented, unable to deeply participate in the value chain.

In the current context, new trends continue to affirm that Vietnam's priority in foreign affairs is correct. Vietnam is a member of many regional initiatives and links, such as the Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), the Asian Development Bank (ADB), free trade agreements... In addition, Vietnam is also negotiating several initiatives and agreements, such as the Indo-Pacific Economic Framework (IPEF), the Free Trade Agreement between Vietnam and the EFTA (VN-EFTA FTA), and the Free Trade Agreement between Vietnam and Israel (VIFTA). These are favorable opportunities for Vietnam's increasingly deep international integration.

In the first six months of 2024, there has been a strong recovery in export activities with an estimated turnover of nearly 189 billion USD, up 13.8% compared to the same period in 2023. Notably, some key commodities have recorded improved export turnover not only from market demand but also from a certain shift of orders from other countries to Vietnam. However, trade activities in Vietnam also face several challenges. Although the supply chain has gradually been restructured, in reality, most of Vietnam's industrial enterprises are still small and fragmented, unable to deeply participate in the value chain.

Sharing about the factors and solutions for businesses to adapt in the global business environment, Mr. Mac Quoc Anh, Vice Chairman and General Secretary of the Hanoi Association of Small and Medium Enterprises, made four proposals.

First, for small and medium-sized enterprises to adapt to the international environment, they must seek and cooperate with businesses that have already joined the regional and global supply value chain because without linking and cooperating with such businesses, our enterprises will not have enough financial capacity, human resources, technology, and international trade knowledge to penetrate the global market.

The second factor for adaptation is investment in capital. This is currently relatively limited, but the State Bank, Ministry of Finance, and Ministry of Science and Technology have provided many solutions to supply capital for enterprises to boldly innovate in science and technology and creativity to penetrate the international market.

Another factor in adaptation is people, which is extremely important. For enterprise leaders, from middle management to workers, to adapt to the global business market, they must always be trained and improved in skills, expertise, and ethics. With more innovative products, the adaptability of enterprises will surely be enhanced.

The final factor is in legal documents. We have many guidelines and specific regulations, but enterprises still need to pay attention and coordinate with functional agencies and local authorities, especially departments such as the Department of Industry and Trade, Department of Planning and Investment, Department of Science and Technology, Department of Finance, as well as the State banking system and tax authorities to understand legal regulations. This avoids the situation where benefits are not properly realized, leading to direct damage to enterprises.

Vietnam is increasingly deeply integrating with the international community, providing new opportunities for businesses to expand markets and connect partners. In the face of global development trends, Vietnam needs to continue implementing mechanisms and policies for green transformation, green economic development, and the circular economy. However, this process must be closely linked with strict compliance with the laws and standards set by the markets that export-oriented businesses are targeting. Given this situation, businesses need to take proactive, flexible steps to appropriately respond to resources and seize opportunities from the international market.

In addition to the legal frameworks provided by the Government, according to Mr. Mac Quoc Anh, businesses themselves must be very proactive to avoid difficulties when exporting to the international market. Proactiveness in seeking information and legal frameworks favorable to their businesses and partners, based on a win-win principle, is crucial.

Another equally important factor is the need for proactive cooperation with functional agencies. "Businesses need to proactively provide transparent information to functional agencies, international arbitration centers, and units they cooperate with for support, legal protection, and advice. Because if businesses do not proactively provide information, there will be no alternative plans when bad scenarios occur," Mr. Mac Quoc Anh noted.

Additionally, Mr. Mac Quoc Anh advised that businesses should have multiple solutions and different scenarios if they intend to engage in economic cooperation both internationally and domestically.

In the coming time, Vietnam's import and export picture will be clearly differentiated as businesses that adapt promptly, respond effectively, seize opportunities, and develop strongly will thrive. Meanwhile, slower-adapting businesses will face new challenges as more stringent regulations are set in target markets. To overcome this difficult phase, businesses should be flexible in choosing partners and target markets and actively adjust policies suitable for key products. Moreover, greening businesses should be timely prioritized, with compliance to environmental, social, and governance standards being vital for sustainable business development.

Bao Bao