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Monday, 27/03/2023


'Make in Vietnam': the way to stop doing outsourcing and increase participation in global value chains

22/02/2021 09:05 AM Font weight
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High technology and innovation are the keys for Vietnam to escape the status of doing outsourcing for foreigners, which has occurred for several decades.


“If we are not brave enough to invest in science and technology and innovation, we will get stuck in the low-productivity, low-added value and middle-income trap,” Prime Minister Nguyen Xuan Phuc said recently at a groundbreaking ceremony in Hoa Lac Hi-tech Park in Hanoi.
Investing in technology and innovation is extremely important for Vietnam to bring products to a new height and escape the status of doing outsourcing for foreigners which the country has been clinging to for decades.
This is not only true for technology firms but for all enterprises in the economy. Applying and inventing new technologies can help increase productivity and heighten enterprises' positions.
Electric cars and smartphones are tangible products which can show the resilience of Vietnamese enterprises in the 4.0 era.
Established in 2008 and starting at the bottom of the ranking of commercial banks in the first four years of operation, TP Bank decided that it would digitize and apply high technologies even in its early days.
“TP Bank understands that it needs to digitize to become a digital bank, or it won’t be able to compete with large longstanding banks,” a representative of the bank said at a digital technology business development forum in 2020.
Meanwhile, Viettel is building a digital business culture with the focus on flexibility, creativity, customer orientation, digital thinking and openness.
It has accelerated digital transformation in internal administration, applying modern technologies with international standards. All documents at Viettel have been digitized, 50 percent of manual work has been liberalized, and 30-40 percent of tasks have been automated.
Its ecosystem of digital products provide B2C and B2B services in a wide range of fields, from finance (Viettelpay), digital marketing and OTT (Mocha, Keng), customer care (MyViettel, Viettel ++), e-government, and SmartCity.
The message "Make in Vietnam" initiated by the Ministry of Information and Technology (MIC) has created vitality in the startup community. Vietnam has become the fifth country in the world mastering 5G technology, producing 5G infrastructure equipment and 5G smartphones. This stems from Make in Vietnam pride.
Over 13,000 digital technology firms were established just in the last year, raising the total number of digital technology firms to 58,000. The figure proves that the Make in Vietnam slogan has been realized in real life.
Adding high value
Nguyen Minh Quy, CEO of Novaon, commented that if Vietnam continues to do outsourcing, it will only be a very small part of the value chain.
An iPhone model can sell for $1,000, but the highest value belongs to the first links of the chain (learning about customers’ demands, research, product design) and the final links (distribution and marketing). A very small value is allocated to production.
At the closing of the national forum on digital technology firm development, Minister of Information and Communications Nguyen Manh Hung spoke about a noteworthy matter. Only 5-6 developing countries become developed after every so-called 'revolution'. The 4.0 industrial revolution brings opportunities only to some countries. Vietnam and developed countries are at the same starting line.
“Mobile Money started in Kenya, a poor country in Africa. Poverty motivated advancement. Vietnam needs to lead in the 4.0 industry revolution. If Vietnam pioneers in applying 4.0 technology, the world will come here and Vietnam’s products will reach out all over the globe,” Hung said.
“Becoming a pioneer is always the aspiration of the Vietnamese nation and every Vietnamese citizen. It is difficult to implement this, but it is not impossible,” he said.
“Vietnam is behind many countries and it once missed a lot of opportunities on the development path, but this doesn’t mean that we will continue to endure and accept a low position,” he said.
Vietnam is among the top countries in the region and the world in some fields, such as telecommunications and power. In the last 20 years, Vietnam has been among the countries maintaining high growth rates.
And now, Vietnam has more motivating power from the 4.0 industrial revolution, from Make in Vietnam and digital transformation. So, Vietnam’s growth engine will have an additional push to turn the aspiration of becoming a high-income country by 2045 into reality.
In order to accomplish that, the space for creativity must be expanded, while management thinking needs to be reformed, so that creativity is not hindered by rigid regulations and officials’ bureaucracy.
Le Xuan Sang, deputy head of the Vietnam Economics Institute, stressed that Vietnam needs to reform the way of thinking and the institutional regime with the aim of encouraging participation of non-state sectors in science and technology development and innovation.
The expert believes that information technology and digital transformation should be seen as an important push and pillar to support the recovery process, strengthen resilience, and improve growth quality. 



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