Having enjoyed an economic growth rate of more than six percent from 2011 which is also projected to continue until at least 2019, Vietnam’s economy has continued to soar beyond the region’s pace of growth. Although this growth has mainly been driven by the excellent performance of its export-oriented manufacturing, Vietnam will still need new areas of growth in order to maintain this growth level. Vietnam will need to use this momentum to develop new sources of economic growth and re-energize their market.
This is where MSMEs have a significant role to play. With domination of 93.7 percent of the total enterprise, Vietnam’s MSMEs without doubt are the next phase of Vietnam’s economic growth. However, this is when the challenges occur as most MSMEs are more likely to rely on their very small market and are not able to penetrate the wider market. This is when innovation is needed, since the key recipe for a MSME to grow is by keeping their business relevant to the market demand. This also means to continue to improve their product, business operation, management, and other areas of their business lines. Therefore, sustaining the economic growth Vietnam currently enjoyswill require the necessary steps to push their MSME to embrace innovation.
About The Enterprise Development Agency
The Enterprise Development Agency is an agency under the Ministry of Planning and Investment that is responsible for small and medium enterprises development and state-owned enterprises restructure. The main tasks of the Agency include chairing and participating in the drafting of legal documents on reorganization, renovation and organization of state-owned enterprises, supporting the development of SME, to create mechanisms, policies and solutions to ensure a favourable investment environment, coordinating the implementation of Law on SME Support, implement programs and projects supporting SMEs across the country
Setting the Baseline for Further Growth
To date, Vietnam has introduced a number of policies and programmes to better provide the enabling environment for MSME to grow. It started with the Law on SME Support that was promulgated in 2017. This law laid down the foundation for government support in the area of research and technology for MSME. The Law also stipulates the key solutions for creative SMEs to step by step form and develop a creative economy in Vietnam.
There is even detailed guidance on investment in innovative SMEs introduced by Government through a decree. This decree has created favourable conditions for private investors to set up innovative start-up funds, which have stimulated social investment flows into creative start-ups. This is a prerequisite condition for generating a creative start-up ecosystem in Vietnam.
In addition, the Government of Vietnam has also implemented many programs and schemes to support MSMEs and general enterprises such as the National Trade Promotion Program, National Program to improve productivity, product quality of enterprises to 2020, Intellectual Property Development Support Program period 2011-2015, National Technology Innovation Program 2020, and Project 844 to support the Creative National Initiative Ecosystem to 2025.
These sets of policies will pave the way for the next wave of growth for Vietnam. Since MSME accounted for 95 percent of the total enterprise, Vietnam can not only rely on their 5 percent of enterprises to remain competitive in the future, especially with the growing changes in the global economy.