Efforts made to boost supporting industry"s growth

Illustrative image (Source: VNA)

Following directions of the Government, the Ministry of Industry and Trade has coordinated with relevant ministries, sectors and agencies to implement measures to improve the competitiveness of businesses operating in supporting industry, thus promoting the growth of the sector.

Boosting the development of the supporting industry is one of the important solutions for Vietnam to improve the quality of the economy, ensuring sustainable development avoiding the middle income trap and enhancing the country’s capacity of attracting foreign investment.

The efforts are also expected to encourage and assist domestic firms to join deeper into the supply chain of foreign-invested companies as well as the global supply chain.

The Vietnamese Government approved Resolution 115/NQ-CP in August last year, which clarified solutions to promote Vietnam’s supporting industries, giving specific goals for the sector such as ensuring high level of competitiveness in the next decade. Especially in 2025, Vietnamese firms are expected to meet 45 percent of the basic demands for domestic production and consumption with about 1,000 businesses capable to directly supply supporting products to assembling companies and multinational groups in the Vietnamese territories.

With the same purpose, in late 2020, the Ministry of Industry and Trade launched the Vietnam Technology Advice and Solutions from Korea Center (VITASK) and a mold technology centre.

The establishment of these facilities showed the desire to boost the growth of the supporting industry in a strong manner as well as promote cooperatikn and investment to enhance the capacity of Vietnamese firms in engaging deeper into the global supply chains, meeting the demand for seeking high quality human resources or promissing partners from the Republic of Korea in Vietnam.

Experts held that the Industry Agency under the Ministry of Industry and Trade needs to expand technical support centres across the country, while implementing activities to assist industrial production firms as well as relevant industrial service providers.

Such centres will not only focus on introducing technologies and supporting businesses in accessing advanced technologies through international cooperation and the Government’s policies but also help them in research and development (R&D) activities, creating new added values for Vietnamese supporting products.

Currently, Vietnam has engaged many free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP). Therefore, the demand for cooperation and partnership among domestic and foreign firms is very high, along with the demand to develop investment and production activities.

Such centres as the VITASK are expected to give strong support to domestic businesses in supporting industries to involve in the global supply chains, enhancing their capacity and meeting the demand for high quality human resources.

Vietnamese enterprises operating in the support industry account for 4.5 percent of the total number of enterprises operating in processing and manufacturing in the country.

Businesses specialising in supporting industries employ 8 percent of the industrial sector’s workforce and contribute 900 trillion VND (39.5 billion USD) or 11 percent of the industrial sector’s total revenue.

Vietnamese enterprises have many opportunities to provide products to assembling and manufacturing enterprises abroad, thus further expanding the country’s supporting industry in the future./.