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Vietnam’s one million enterprise goal by 2020 challenging but feasible

7 Sep 2018

Stabilising macro-economic conditions and creating favourable environments for enterprises development are some key recommendations to achieve the one million enterprise target.

 

Taking into account the number of enterprises recorded in January 2017 of 517,900, the target of having one million enterprises by 2020 is challenging but still feasible, stated Pham Dinh Thuy, director of the Industrial Statistics Department under the general Statistical Office (GSO).

 

Excluding the number of enterprises suspended operation at around 12,000 per year, Vietnam would need an average of 120,000 newly established enterprises in the 20182020 period to achieve the target, said Thuy in a GSO meeting.

 

“This would bring the total number of enterprises to 130,000 per year,” Thuy stated.

However, only 110,000 enterprises were established in 2016 and 126,900 a year later. If such growth rate does not change, Vietnam is unlikely to meet the target of having one million enterprises by 2020, he added.

 

The solution to increase the number of newly established enterprises, according to Thuy, would be to stabilise macro-economic conditions and create a favourable environment for enterprises development.

 

Moreover, the government needs to step up effort in removing obsolete business conditions and helping enterprises have better access to capital.

 

Of the 517,900, small and medium enterprises (SMEs) accounted for 98.1 percent or 507,860, up 52.1 percent or 174,000 enterprises compared to January 2012.

 

Upon breaking down, medium enterprises were 8,500, up 23.6 percent or 1,600 compared to 2012 and accounted for 1.6 percent, while the number of small enterprises reached 114,100, accounting for 22 percent of the total and up 21.2 percent or 20,000. The remaining was micro enterprises with 385,300, contributing 74.4 percent of the total and up 65.5 percent or 152,000.

In January 2017, HCM City had the largest number of enterprises at 172,600, accounting for 33.3 percent of the total. The city also attracted the largest workforce of 5.3 million, accounting for 37.7 percent of the total number.

 

FDI sector employs the largest workforce

The number of state-owned enterprises (SOEs) and its workforce in January 2017 decreased by respective 18.4 percent and 23.1 percent compared to the same period of five years ago. This resulted in an annual decline of 4 percent in the number of enterprises and 5.1 percent in workforce in the 20122017 period, which showed modest progress in the restructuring of the public sector, Thuy said.

 

Meanwhile, in early 2017, the number of foreign invested companies (FIEs) increased by 54 percent and its workforce 62.8 percent compared to January 2012. This translated in an average increase of 9 percent in the number of enterprises and 10.2 percent in employees, double the number of SOEs.

 

The number of private companies during the same period increased by 52.3 percent and its workforce 27.9 percent, averaging 8.8 percent in the quantity and 5 percent in workforce in the 20122017 period.

 

Source: Ha Noi Times

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