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Businesses slow to innovate, says report
Cost, knowledge and the market are the main issues hampering innovative activities among businesses, according to the annual Viet Nam Business 2009 report.
The report assessed innovation capacity in the important sectors of food processing, garment, motorbike manufacturing, electronics and banking, said Pham Thi Thu Hang, Director of the Enterprise Development Foundation under the Viet Nam Chamber of Commerce and Industry.
Up to 46.8 per cent of 13,490 responded enterprises said that the cost of innovation was high and while they cannot afford to pay for it themselves, there is also a lack of outside investment.
Over 42 per cent said that their current employees were incapable of coming up with innovative ideas. "That is the harsh reality of Viet Nam's labour market. The labour force is plentiful but the number of knowledgeable workers, skilled in production as well as in innovative activities is low," the report noted.
Meanwhile, 47.4 per cent said that big enterprises were also a problem. With advantages in finance and human resources, big enterprises find it easy to carry out activities that improve both products and services and exploit new markets.
According to the survey, enterprises continued to innovate in the areas of goods and services, process innovation and organisational restructure in 2009.
Most innovative work was conducted by the enterprises themselves. In addition, the percentage of enterprises which had relationships with other companies or domestic and overseas institutions was still very modest.
"This is a serious obstacle to the development and enhancement of competition between enterprises in the international integration process," the report said.
As a matter of innovations in business organisation in 2009, it noted, up to 62.6 per cent of enterprises had increased the quality of goods and services and 53.2 per cent had reduced waiting times.
However, there was not a significant improvement in organisational restructure which led to failure to improve working conditions for staff and reduce costs.
" Viet Nam's enterprises cannot raise productivity if they do not apply research and development, technical reform, production line and market diversification. This is a huge challenge for enterprises but it is also the only feasible way to ensure their survival after the crisis and increase competition," the report said.
As of 2009, the country is home to over 463,800 enterprises.
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