Vietnam locomotive HCMC losing its edge in business competitiveness: expert

HCMC businesses are not in good competitive health and slipping from their leading position in the country, said Huynh The Du, a lecturer at Indiana University in the United States.

He was speaking at the 2024 Provincial Enterprise Competitiveness Forum held in HCMC on Wednesday.

“In terms of absolute value, the city's economy still leads the country, but its growth rate is slowing down compared to the national average,” he said.

Businesses in HCMC have not been able to narrow the gap with counterparts in major cities in the region like Bangkok (Thailand), Singapore, and Shanghai (China). Within Vietnam, they have always been positioned as leaders, but they are slipping from that position, gradually, Du said.

Du’s analysis is echoed by the HCMC Business Competitiveness report tabled at the forum. The report evaluates the current position and changes in positions from 2000 to 2023.

The city had only one enterprise among the ten largest tax-paying enterprises in the country in 2022. That year, no enterprise in HCMC featured in the list of 10 largest enterprises in Vietnam, according to the ranking mentioned in the Vietnam Assessment Report JSC (VNR500).

The report also says that among private enterprises, the city had five of the 10 largest enterprises in the country in 2010, but this reduced to three in 2022.

Du said there were four things that businesses in HCMC could do to consolidate and regain their leading position in the country and become more competitive in the region.

Firstly, they need to develop an operating strategy and vision with a competitive mindset that targets both domestic and international economies. Du said this was an important factor for businesses to thrive.

Secondly, they need to focus on branding and internationalization. Du said outsourcing or subcontracting was usually the first step for many businesses. However, productivity and development of a business depended on innovation capacity, uniqueness and usefulness of its products and services. This becomes crystallized in the brand name. Therefore, brand building and brand internationalization are very important.

Thirdly, businesses in HCMC should develop professional management. Du said maintaining a family company was quite common in Asian countries, and Vietnam was no exception. However, using modern management tools such as decentralization and incentive mechanisms to attract talent and work effectively was necessary for businesses to become more competitive.

Many Vietnamese businesses were finding it difficult to establish relationships of cooperation and trust with others, he noted. This can be improved with the application of modern business management tools, he added.

Fourthly, HCMC businesses need to become more proactive in identifying and tackling challenges as well as take advantage of opportunities, Du said. This was key to becoming a competitive business, earn more profits and create more value for society, he added.