Promoting green innovation in SMEs

On July 26, the seminar themed "Promoting green innovation in small- and medium-sized enterprises (SMEs) in Vietnam", hosted by the Central Institute for Economic Management (CIEM) and the Embassy of Denmark to Vietnam, looked at issues in green innovation,

The seminar focused on systematising and clarifying basic concepts and analytical frameworks for boosting green innovation in SMEs, with proposed directions for future solutions.

During their research, experts have worked with 30 businesses in various cities and provinces, including Hai Duong, Haiphong, Dong Thap, Dong Nai, Hue, and Lam Dong, and conducted surveys to assess the current state of green innovation among SMEs.

“In Vietnam, green innovation is gaining significant attention, and is being implemented among enterprises of all sizes, including SMEs. Enterprises engaged in green innovation have emerged across various sectors such as agriculture, consumer goods sector, waste treatment, and food processing,” said Nguyen Hoa Cuong, deputy director of the CIEM.

Nguyen Thi Luyen, head of the Economic Institution Research Department at the CIEM said, "Green innovation helps businesses access markets, increase profitability along the value chain, meet increasingly stringent standards and regulations, attract investment, and enhance productivity and technological capacity."

However, the CIEM report points out that green innovation activities in SMEs are still quite limited. "Due to the low technology content in SMEs, these enterprises mainly engage in 'green innovation' by using input materials and applying circular processes. The number of enterprises actually implementing greener technological innovations is still not significant," it said.

Notable policies include investment incentives and support for funding and credit as stipulated in the Law on Investment 2020, the Law on Science and Technology 2013, and the Law on Economical and Efficient Use of Energy.

There are also preferential policies and support regarding taxes and fees such as corporate income tax, VAT, import-export tax, and incentives for land and water surface rental.

"The government is gradually helping and encouraging businesses, especially SMEs, to implement green innovation," said To Hoai Nam, vice president and general secretary of the Vietnam Association of SMEs. "A general policy framework to promote innovation in general and green innovation in particular has been established, and support organisations have been formed."

In addition, financial and non-financial policy solutions have been implemented to support and motivate SMEs in green innovation such as communication, promotion, technical support, and trade promotion.

Commenting on the report published at the seminar, Cung Trong Cuong, director of Thua Thien-Hue Institute for Development Studies, proposed additional content for the next phase of the research programme to effectively apply or develop policies for the development of businesses towards green innovation and transitioning to a green economy.

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