What do domestic businesses need to overcome difficulties?

DNHN - Strong and synchronized government support policies are crucial in helping Vietnamese enterprises navigate the current challenging period.

In 2024, despite signs of economic recovery, many Vietnamese businesses continue to struggle to sustain operations. Data from the Ministry of Planning and Investment shows that over 96,000 enterprises temporarily suspended business in the first 11 months of 2024, a 12.6% increase compared to the same period last year. This raises major concerns about the resilience and competitiveness of Vietnamese enterprises.  

Dr. Cấn Văn Lực, Chief Economist at BIDV and a member of the National Financial and Monetary Policy Advisory Council, identifies four primary challenges for Vietnamese businesses. First, legal issues persist. Although regulations have been simplified, many businesses remain hesitant due to fear of making mistakes.  

Second, despite reduced inflation and interest rates, financial obligations remain burdensome, causing significant strain on businesses.  

Third, input costs continue to rise. While there are signs of stabilization, they remain higher than in previous periods.  

Finally, labor shortages in certain manufacturing sectors hinder sustainable order recovery.  

Given this reality, experts warn that without timely policy interventions, the number of businesses exiting the market will continue to rise in 2025. On average, more than 15,700 businesses cease operations each month, highlighting mounting pressure on small and medium-sized enterprises (SMEs), which account for the majority of dissolved firms.  

To help businesses overcome difficulties, many argue that a bold policy boost is necessary. Business support measures must not only be synchronized across different levels but also target specific challenges that enterprises face.  

First, the government should implement more flexible financial and tax support policies. With borrowing costs still high and financial burdens persisting, tax reductions, deferrals, and subsidies for SMEs should be prioritized. Additionally, digital transformation support policies are essential in an era of rapid technological advancement.  

Digital transformation is a key solution to enhance business management and competitiveness. SMEs need government assistance in adopting new technologies to improve production processes, reduce costs, and enhance product quality.

Beyond policy support, Vietnamese businesses must change their management mindset and production capacity. SMEs, particularly those lacking strong technology and management expertise, must develop strategies to innovate and adapt to market demands. Adopting modern management practices, improving production efficiency, and proactively seeking domestic market opportunities are critical.  

Furthermore, business model innovation and a shift toward sustainable production are indispensable. Green standards and carbon taxes will play a decisive role for export-oriented enterprises. Without a timely transition to sustainable practices, many businesses risk being excluded from global supply chains.  

Mr. Nguyễn Quang Huy from the Faculty of Finance and Banking at Nguyễn Trãi University believes that a strong policy framework is key to sustainable business development. This requires close coordination between the government, banks, and businesses themselves.  

To minimize business closures, in addition to financial and tax support, a conducive business environment is essential for companies to strengthen their competitiveness in the international market. Promoting domestic product consumption and developing key manufacturing sectors are also crucial to reducing reliance on exports.  

Vietnamese businesses now face both opportunities and challenges. SMEs, in particular, must undergo a profound transformation in management, technology, and sustainable production to not only survive but thrive in an increasingly competitive environment.  

The government and relevant agencies must establish a robust support ecosystem to help businesses overcome difficulties and move toward sustainable growth in 2025 and beyond. The combination of policy support and corporate innovation will be the decisive factor in enabling Vietnamese enterprises to rise in the new economic landscape.

Nghe Nhan