Many Vietnamese enterprises are using outdated technology.
Vietnamese enterprises will find it difficult to improve their competiveness without modernizing their technology, according to Mr. Tran Viet Thanh, Deputy Minister of Science and Technology. “Technological readiness in Vietnam faces a number of problems,” he told the “International Standard - Solutions to Vietnamese Products” forum hosted by the Vietnam Chamber of Commerce and Industry (VCCI) on November 1.
He noted that the majority of Vietnamese enterprises are using outdated technologies, except for those in certain areas such as information technology, petroleum, aviation, and banking and finance. Technologies lag behind the global average by about three generations.
For example, manufacturing and industry accounts for one-third of all enterprises in Vietnam but 88 per cent of enterprises in the sector use basic or outdated technologies. The proportion of technological investment to profit among Vietnamese enterprises is around 0.5 per cent of that of South Korean enterprises.
Although the equipment and accessories sector imported the most in 2013, 35 per cent came from China. “The import ratio from countries with modern technologies is too low,” Mr. Thanh said, adding that 12 per cent came from the EU and 4 per cent from the US.
According to the Global Competitiveness Report 2014 from the World Economic Forum, Vietnam’s competitiveness was ranked 68 out of 144 countries. Nevertheless, the rankings for enterprise readiness for technology absorption and accessing new technology were 121 and 123, respectively.
Meanwhile, Vietnam is restructuring its economy and preparing to join the Trans-Pacific Partnership (TPP). To succeed against their competitors, enterprises must enhance their management and competitiveness, creativity, and price strategies, raising questions about technology for most Vietnamese enterprises.