Improving business competitiveness vital for HCM City to reverse falling growth rate

A corner of HCM City. Improving the competitiveness of the city’s businesses is imperative to keeping it on the high growth path. — Photo laodong.vn

HCM CITY — Despite leading the country in several key metrics, HCM City’s economic growth is slowing compared to the national average, and improving the competitiveness of its businesses is imperative to keeping it on the high growth path, experts have said.

Dr Huỳnh Thế Du, a lecturer at Indiana University in the US and a member of the Institute for Vietnam Initiatives, said the city was still a prime location for business in Việt Nam, had the highest number of businesses in the country and was the biggest contributor to the country’s GDP.

But its growth rate was slowing, as was the competitiveness of its enterprises since 2010, he said.

Thus, of the 70 Vietnamese enterprises in this year’s Fortune Southeast Asia 500 list, 30 were in Hà Nội and only 25 in HCM City, and of the country’s top 10 enterprises, the former city had six and the latter, only two, he said.

Besides, the market capitalisation of listed companies in HCM City had declined from around 50 per cent in early 2010s to less than a third by 2022, while Hà Nội’s share was rising, he said.

He said the city’s labour productivity and average income had declined.

He attributed the decline in the competitiveness to several factors such as incoherent business strategies, limited industry cluster development and a lack of links and mutual support between businesses.

According to Lý Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, a majority of businesses in the city are small or medium-sized and a lack of resources is among their biggest challenges.

A number of manufacturing businesses have failed to improve their production technologies, she added.

David Tân Nguyễn, chairman of BrainGroup, said many businesses lacked innovation and awareness of market trends.

Du said to increase their competitiveness, enterprises must have a clear business strategy and vision, focus on branding, build modern management tools and have a mechanism to attract talents.

They needed to be proactive in keeping up with new development trends such as green and digital economic development.

Industry associations needed to provide businesses with information related to market trends, technological advances, and industry development, while banks should connect with them to help businesses access credit, he said.

Chi highlighted the need for improvements in the logistics infrastructure and administrative procedures to support businesses better.

From a macro perspective, experts suggested that the city should pay greater attention to developing technical and transport infrastructure to reduce logistics costs.

Nguyễn Văn Dũng, vice chairman of the city People’s Committee, said the ability to create added value and the competitiveness of the business community would play a significant role in the city’s sustainable development.

The city had implemented policies towards improving its competitiveness and creating the most favourable conditions for businesses to develop, he added. — VNS