Instead of registering new businesses, focus on developing current ones

DNHN - Mr Le Duy Binh, Economist, Director of Economica Vietnam, shared his thoughts on the need to focus on growing existing businesses rather than registering new ones at the forum "Brenovative solutions to improve the competitiveness of enterprises to recover and develop sustainably" on the afternoon of August 19.

The word "green" should be connected with the business model.

Mr Hoang Quang Phong, Vice President of the Vietnam Confederation of Commerce and Industry (VCCI), stated at the forum's opening that Vietnam's economy is in the third quarter of 2022, witnessing a strong recovery with many proud results, highly appreciated by international friends, and Vietnam's long-term credit rating is "stable" and "positive."

But the VCCI Provincial Competitiveness Index (PCI) survey shows that the business community is having trouble. In particular, up to 92% of businesses (94% of domestic private businesses and 86% of foreign-invested businesses) said that the COVID-19 epidemic hurt them in some way.

Most businesses in all industries and areas have had to deal with problems caused by the COVID-19 epidemic, such as trouble reaching customers (60%), a lack of workers (53%), an imbalance in cash flow (52%), and problems with the supply chain (52%).

Mr Nguyen Hai Minh, Vice President of the European Chamber of Commerce in Vietnam (Eurocham), said that two-way trade growth has changed for the better since the EVFTA went into effect. When it comes to investments, a lot of money is put into Vietnam by European companies. These are good investments because they use new technology and are good for the environment.

Commenting on the big picture, Mr Minh said that the world is facing a lot of problems. European businesses also face some basic problems, such as the war in Ukraine, rising inflation, and China's zero COVID policy.

This is shown by Eurocham's BCI (business environment index), which shows that the second quarter of 2022 was slightly worse than the first quarter. This shows how hard it is for European businesses to do business in the region. encountered.

At the moment, the European market is a big one with a lot of potentials. Vietnamese businesses also have the chance to join the supply chain and sell to businesses in Europe.

"On the other hand, European businesses want to export more to the Vietnamese market, which would give them access to the ASEAN and Asian markets. But that depends on whether or not Vietnam can make the most of this chance "Mr Minh said.

In terms of sustainable development, Europe has had a strategy for many years. This strategy is based on several key pillars, such as protecting the environment, promoting human and worker rights, and making sure businesses are doing their part for society.

These three pillars are part of the bloc's trade policy. They are also reflected in the EVFTA Agreement, which spells out the conditions and commitments that Vietnam must meet in terms of sustainable development to get the benefits of tariff preferences.

Eurocham is currently running several programs to strengthen ties between the business communities on both sides. These include activities to help businesses understand the European practices that are being used, programs to help small and medium-sized Vietnamese businesses get access to markets and promote their sales, and training programs on regulations that Vietnamese businesses need to understand.

Mr Minh suggested that Vietnamese businesses should change their business models and link them to the word "green" in the future.

Focus on what to do and how to do it to help businesses grow.

Mr Le Duy Binh, an economist and director of Economica Vietnam, spoke at a forum on the development of the private business sector as seen in Resolution No. 10-NQ/TW on private economic development. He said: From 2016 to 2020, the growth rate of the private economy has slowed down in terms of both number and labour.

The number of businesses that are contributing to the economy has gone up from 505,000 in 2016 to about 684,000 in 2020.

"As a result, the number went up to only 180,000 businesses, which is a long way from the 1.2 to 1.3 million businesses that are usually registered every year," Mr Le Duy Binh said.

Mr Binh says that most of the 684,000 businesses that are running are domestic private businesses, which make up about 660,000 businesses. There are also 1,900 state-owned businesses and 22,000 FDI businesses. Compared to the number of businesses that are running in ASEAN countries, this number is still quite low.

At the same time, it is a long way from the goal of 1 million successful businesses by 2025. When you look at the growth trend over the past 5 years, you can see that the number of private businesses has grown, but the rate of growth has slowed. This shows that the growth momentum is slowing.

"We think it's important to deal with the growth rate of businesses that are already open, not the growth in the number of businesses that are registered. We've reached the limit of how well private businesses can work, so Mr Binh said it was important to pay attention to the "preparatory" audience, which is business households that need specific solutions to help them grow into businesses.

Ms Tran Uyen Phuong, the Deputy General Director of Tan Hiep Phat, said that businesses need a clear, consistent strategy with goals, a vision, and a mission to be more competitive. These are rules that businesses can follow to stay on track and move forward.

Ms Phuong stressed in particular that for a company to be competitive and successful, the people in charge need to be ambitious and willing to take risks. "At Tan Hiep Phat, managers need to be people who want to make a difference, are willing to invest, and look for systems and models of governance. At the same time, we were the first ones to implement a model of governance for sustainable development," Ms Phuong said.

Ha Anh