3 orientations for developing supporting industry enterprises in Nghe An

Overview of the workshop. Photo: Thu Huyen

From the perspective of who is doing the supporting industry for Nghe An?; what policies does the province need to be effective? - Dr. Le Xuan Sang, Deputy Director of the Vietnam Economic Institute, said that Nghe An has many disadvantages in terms of economic geography, making socio-economic development in general and the development of supporting industry enterprises in the area in particular more difficult.

However, the province still has advantages, potential and policy space to support the development of these businesses in the area.

According to Dr. Le Xuan Sang, up to now, Vietnam's supporting industry enterprises are still very weak, with the number of enterprises accounting for only approximately 0.3% at the end of 2017. After 3 decades of protection, most supporting industries still develop very slowly, some industries can be said to have failed.

Dr. Le Xuan Sang - Deputy Director of the Vietnam Economic Institute raised the question: How should Nghe An support the development of supporting industry enterprises in the area?

The supporting industry in Nghe An is even weaker than the national average. In recent times, the province has attracted a number of enterprises, typically in the electronics and information technology industry, there are two enterprises, BSE Company and EM-TECH Company, producing phone components. Or the Factory producing two-piece beer cans and carton packaging for beer factories in the Sabeco Group system; Nghe An General Packaging and Trading Joint Stock Company producing cement packaging and agricultural packaging; Strongplus Elevator Vietnam - Korea Co., Ltd. producing and distributing mechanical products such as bolts, screws, auxiliary equipment mainly for elevator production and exporting to Korea... The remaining fields such as textiles, footwear, automobile assembly, mechanical engineering, high-tech supporting industry are all still very weak.

In general, supporting industrial enterprises in Nghe An are still too small and fragmented, not meeting the requirements of investors and projects under construction in the province. In particular, supporting industries for the textile industry - one of the key industries of Nghe An - are almost non-existent.

Up to now, most of the equipment used in textile production such as needles, buttons, threads, snaps, zippers, metal zippers, etc. have to be imported from China and Korea.

Export sewing line at Haivina Kim Lien Garment Company, Nam Dan. Photo: Thu Huyen

Based on the analysis of limitations and development requirements, Dr. Le Xuan Sang suggested three policy orientations to promote the development of supporting industry enterprises in Nghe An.

Firstly, the priority orientation in both the short and long term is to make more efforts to strongly improve the investment and business environment - competition in the province to promote more investment from local capital sources and attract investment from outside, thereby developing the business force in general, and supporting industry enterprises in the area in particular.

Second, the long-term orientation for long-term socio-economic development of Nghe An is to develop into an IT center and a center of science, education and training in the North Central region. Therefore, it is necessary to increase resources and adjust the strategy for developing the education and training system in the area.

Third, to achieve the above strategies and develop supporting industrial enterprises in the area, it is necessary to upgrade and innovate the system of higher education and vocational training institutions in the province in the direction of enhancing scientific and technological research capacity, industry development, sophisticated industry linkage organization, economic and technological management, etc.

“Due to geographical economic disadvantages, Nghe An should focus on developing industries where the disadvantage of distance from major economic centers has little impact on production costs, relying more on its comparative advantages and competitive advantages by taking full advantage of the benefits of the information and communication technology revolution (especially the Internet, mobile phones, digitalization) as well as the regulations that FTAs ​​bring (on market size and origin of inputs, technology transfer).

In addition, the province needs to review, conduct in-depth research and select the most suitable supporting industries for the province from the total of 6 groups of industries regulated by the Government for support" - Dr. Le Xuan Sang shared.

Thu Huyen