Answers in reach to build effective supply chain links

This is not a problem of a single locality but a common problem of many localities. The connection between small- and medium-sized enterprises (SMEs) with larger foreign corporations is still limited.

Van Duc Phu, northern Investment Promotion, Information and Support Centre Foreign Investment Agency Ministry of Finance

Currently, the rate of participation in the supply chain is still low. Not many Vietnamese SMEs can participate in the global supply chain in high value-added stages. Although in large industrial centres such as Hanoi, Ho Chi Minh City, Bac Ninh, and Thai Nguyen foreign-invested enterprises (FIEs) have formed a supplier ecosystem, most of them are other FIEs.

Therefore, for SMEs to participate in the supply chain of large enterprises and increase their participation in the supply chain, we need to synchronously deploy solutions from both the government and the enterprises themselves.

In the past time, after many contacts with FIEs, I realised that most have high requirements: stable product quality, compliance with strict technical standards, competitive prices, and on-time delivery ability. In addition, the state needs to support capital and policies for SMEs to innovate technology, invest in modern machinery and production tech, and meet international standards.

We need to increase support for training, fostering management skills, production management, and professional techniques to achieve the necessary certificates. Promoting digital transformation in enterprises to optimise management and production processes and enhance connectivity is also essential.

Along with these solutions, the state and local authorities must create policies to connect SMEs to develop supporting industries and have stronger incentive policies to encourage FIEs to cooperate, link and transfer technology to Vietnamese enterprises, instead of just focusing on attracting capital.

In the long term, we also have to organise specialised training programmes on management skills, production, and quality standards according to the specific requirements of large corporations and connect SMEs in Vietnam.

It is important that we organise meaningful and effective networking events such as the Vietnam Supporting Industry Exhibition, business networking, and supply-demand networking conferences to create opportunities for smaller enterprises to meet directly and introduce their production capacity to FIEs.

In addition, to have effective strategic cooperation and networking, it is necessary to build a database on the capacity of domestic SMEs so that foreign-led groups can easily search and select suppliers. In this regard, localities, enterprises, associations, and organisations should coordinate with FIEs to discuss and discuss cooperation methods.

At the same time, encouraging SMEs to cooperate with each other to form industry clusters and larger value chains with sufficient scale and capacity to supply large orders to corporations is always important.

In addition, it is necessary to continue to innovate and enhance the effectiveness of investment promotion, and strengthen coordination between central and local levels, between regions, and between state management agencies and professional associations in investment promotion.

It is necessary to promote investment with goals and key points associated with new investment cooperation criteria; and continue to maintain traditional markets and partners, while expanding new markets and partners. Such promotional activities and methods should be diversified, and focused on boosting on-site investment with specific successful cooperation projects.

Appropriate action is needed, including prioritising the implementation of national, regional, and inter-sectoral investment promotion activities; publicising information on laws and plans; strengthening the dialogue mechanism; and thoroughly handling problems related to ongoing projects.

In short, connection and support need to be specified through training and consulting to improve skills in investment promotion, IT, and innovation.