More than 100,000 businesses withdrew from Vietnam’s market, millions of families face difficulties

An employee in a small and medium-sized enterprise in Hanoi

Affected by the Covid epidemic, in 2021, more than 100,000 enterprises withdrew from the market, most of them are small and medium-sized enterprises. Of course, that entails millions of workers and their families in difficulty.

According to Vietnam’s Ministry of Planning and Investment, small and medium-sized enterprises currently account for nearly 98% of Vietnam’s total number of enterprises, creating 5 million jobs, but mainly growing in breadth, increasing in number but little in terms of depth.

Up to now, Vietnamese small and medium enterprises have basically not been deeply involved in the global ecosystem and value chain. The link between domestic enterprises and FDI enterprises is still loose. Small and medium enterprises basically only use technology at an average level, create low added value, use a lot of resources and labor.

In particular, in 2021, many businesses heavily affected by the Covid pandemic need help and support. Therefore, businesses need support to improve competition, connect with leading enterprises, support access to finance, and support digital transformation…

Currently, the Ministry of Planning and Investment has cooperated with the United States Agency for International Development (USAID) to develop the LinkSME (Connecting Small and Medium Enterprises) project, supporting many small and medium enterprises to improve their capacity and participate deeply in the global value chain as well as overcome difficulties during the pandemic. The project is implemented on 3 pillars, including connecting small and medium enterprises with leading enterprises in the chain; financial access, and support for digital transformation.

Mr. Le Manh Hung, director of the Enterprise Development Department, Ministry of Planning and Investment said that LinkSME has focused on improving the connectivity capacity of small and medium enterprises. Thanks to that, many orders connected successfully; dozens of training courses for hundreds of enterprises to meet the technical requirements of enterprises at the top of the supply chain; strengthen the capacity to access finance and financial management with a capital of hundreds of billions of dong.

In particular, nearly 100,000 businesses have accessed documents to raise awareness about digital transformation, more than 500 businesses have been assessed for their readiness, and 100 businesses are receiving intensive consulting support for digital transformation.

Mr. Le Duy Anh, director of Xuan Hoa Joint Stock Company (Vinh Phuc), said LinkSME has supported businesses by sending experts to assist enterprises in re-assessing their capacity, providing technical support, and assisting in searching customers, finding potential foreign partners, and seeking low-cost capital. Currently, the enterprise has reached international quality and standards, has large customers from the US and Europe to work, and has a very positive future.

Mr. Le Duy Anh said that in the past, with digital transformation, we were aware of the need, but we kept struggling to find a way. So far we have figured out how to do it, how many items need to be done. Thanks to digital transformation, the company has improved its competitiveness with competitors from Thailand and China, meeting export orders to the US and Europe…

Mr. Dang Dinh Thinh, technical manager of JAT Automotive Parts and Industrial Equipment Manufacturing Joint Stock Company (Bac Ninh), said that the company is currently cooperating with LinkSME to deploy a smart factory model, creating smart factory opportunities to cooperate with foreign enterprises, expand export markets. In particular, thanks to the support of LinkSME experts to improve product quality, manage and find foreign customers, promote exports, when domestic orders are reduced due to the Covid epidemic, the firm’s export orders have increased. If in 2019 exports accounted for 16.9% of enterprises’ revenue, in 2020 it increased to 19.7% and in the first 9 months of 2021 increased to 30.4%, reaching $13.6 million. Components for export focus on the US and Canadian markets.

Ms. Nguyen Thi Thanh Hoa, general director of Eubiz Company (Hanoi) said “We have subsidiaries in Dak Nong, Binh Phuoc, Son La, and distribution partners in the US, Europe, and Australia. With such a large space operation, it would be very difficult to do it manually. We have chosen to digitally transform and apply 4.0 technology. With the support of experts, we have built a clear digital transformation roadmap to 2025. Using digital technology to manage the entire ecosystem, remote logistics and product traceability has met the requirements of a double-closed system of international importers. Digital transformation has helped businesses increase transparency, reduce costs, and increase competitiveness before businesses of Thailand and China.” (Translated)


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