SMEs’ productivity: Better, but still limited

Although Vietnam has focused on increasing labour productivity and overall productivity growth, there have been relatively few opportunities for small- and medium-sized enterprises (SMEs) to get customised support as they grow, said Max Bulakovskiy, policy analyst in Global Relations at the Organisation for Economic Cooperation and Development (OECD).
SMEs’ productivity: Better, but still limited ảnh 1Workers make handicrafts at Hien Luong Bamboo and Rattan Export Co Ltd in Phu Xuyen district’s Phu Tuc commune, Ha Noi(Photo: VNA)

Hanoi (VNS/VNA) - Although Vietnam has focused on increasing labourproductivity and overall productivity growth, there have been relatively fewopportunities for small- and medium-sized enterprises (SMEs) to get customisedsupport as they grow, said Max Bulakovskiy, policy analyst in Global Relationsat the Organisation for Economic Cooperation and Development (OECD).

Bulakovskiy spoke during theVietnam National Dissemination Seminar on the ASEAN SME Policy Index (ASPI)2018 held on October 1 in Hanoi.

The OECD, theEconomic Research Institute for ASEAN and East Asia (ERIA) and Vietnam’sMinistry of Planning and Investment co-organised the event with the aim ofproviding an overview of SMEs in terms of their contributions to employment andgrowth, and the specific challenges this segment faces in terms of productivityand working conditions.

During the event,experts from OECD and ERIA discussed examples of good practices from not only Vietnam,but also from ASEAN, and looked at a range of policy initiatives in place. Theyalso provided policy recommendations which were identified for the country.

“The national TechnologyDevelopment Progamme is one of the major mechanisms accessible for SMEs in Vietnam witha main focus on upgrading overall productivity. However, limited monitoring andevaluation of the existing programmes make it difficult to judge SME’seffectiveness and efficiency,” Bulakovskiy said.

“Vietnam has put astrong emphasis on promotion for R&D, especially on high-potential advancedtechnology linked to commercialisation. There are large initiatives promotinghigh-tech business incubation and development centres, but the country lackspolicy co-ordination mechanisms in the area of innovation promotion,” he added.

Regarding the region, hesaid eight of the ASEAN member states offer both fiscal and non-fiscalincentives to promote productive agglomeration. Nine of the ASEAN nations haveestablished national offices to deal with intellectual property.

Vietnam has notdeveloped a national standard curriculum on entrepreneurship subjects andentrepreneurial learning (EL) elements are hard to disseminate at the primaryeducation level, said Annie Norfolk Beadle, policy analyst in the SoutheastAsia Division, OECD.

“The country has mostlyrelied on fragmented workshops and training sessions to scale up entrepreneurialskills among SMEs,” she said. “Vietnam should introduce a nationalcurriculum on entrepreneurship in the national education system starting fromthe early stage.”

“It should also makeentrepreneurship programmes for SMEs more systematic to meet the NationalInnovative Start-up Ecosystem programme’s objectives and provide better supportfor SMEs,” she said.

In the ASEAN region,some regional initiatives have emerged since 2014 to address the general lackof training programmes for EL in the region, for examplethe ASEAN SME Academy.

Half of AMS undertakebackground studies to ascertain entrepreneur training needs and around halfhave implemented initiatives in this area, she said.

Dionisius A. Narjoko,senior economist at ERIA, said SMEs in Vietnam have been blended withbroader SME development programmes, for example in quality standards.

“But the country lacksof initiatives to help SMEs make better use of the country’s trade facilitationinfrastructure,” he said, adding that it should introduce more SME-specificsupports, especially in the areas where it is lacking the most, such as tradefacilitation and quality standards.

Vietnamese policy-makerscould consider developing a strategic national programme for integrating SMEsinto global value chains and enhancing the use of e-commerce among SMEs, hesaid.

“SMEs are an importantdriver of job creation and economic growth in the ASEAN region. As the ASEANEconomic Community moves towards a higher level of market integration, new opportunitiesare opening up for these firms. The SME Policy Index is a tool to supportpolicymakers in developing appropriate national and regional policies for SMEsto realise their full potential as drivers of job creation and economicgrowth,” said Nguyen Hoa Cương, deputy general director of the Agency forEnterprise Development under the Vietnam’s Ministry of Planning and Investment.

Encompassing the 10ASEAN member countries, ASPI covers key areas of SME policy and builds on a setof policy indicators to measure the performance of participating economies ineach of those areas.

The main objectives ofthe ASPI are to assess strengths and weaknesses of policy design andimplementation in order to provide a list of priority actions for reform andprovide a monitoring and evaluation framework for governments, the privatesector and the donor community.

It also helps evaluatethe status of implementation of the ASEAN Strategic Action Plan for SMEDevelopment 2016-2025 and helps enhance the capacity of policy makers toidentify policy areas for future reform in accordance with best internationalpractices.-VNA
VNA

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