Vietnam’s Competitiveness and the Role of the Private Sector potx

Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.. PorterSocial Infrastructur

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This presentation draws on ideas from Professor Porter’s books and articles, in particular, Competitive Strategy (The Free Press, 1980); Competitive

Review, March 2001); and a forthcoming book No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or

be found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu Version: November 18, 2008, 3pm

Vietnam’s Competitiveness and the Role of the Private Sector

20081201 – PACE strategy.ppt

The Need For An Economic Strategy

• Vietnam has experienced an impressive growth over the last two

decades

• However, reforms so far are insufficientto move Vietnam to a middle

income economy

• The next several yearswill determine whether Vietnam will follow the

experience of Korea, or the Philippines

• Vietnam’s reform have been piecemeal and reactive

• Improving Vietnam’s standard of living will require a long term

economic strategy

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Agenda

• Understanding Vietnam’s Economic Performance

• Assessing Vietnamese Competitiveness

• Identifying Action Priorities

• Organizing for Competitiveness

• Creating an Economic Strategy

• Integrating Corporate Social Responsibility

Spain UK

Netherlands Austria France

Russia Saudi Arabia

Turkey Thailand

Brazil

India Indonesia

Costa Rica

Egypt Nigeria Bangladesh

Sri Lanka

Cambodia

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Source: Economist Intelligence Unit (2008)

Labor Force Utilization

Participation Rates, Selected Countries

Italy

Latvia Sweden

Norway

Lithuania

Ireland South Korea

Bangladesh Brazil

Portugal

Indonesia China

Argentina Philippines

Russia Hong Kong

India

Sri Lanka

Nicaragua Malaysia

Chile Taiwan

Argentina

Finland

Germany Italy

Poland

Sweden Norway

Japan

Turkey Malaysia

Slovakia Australia

China

Canada

Spain

Singapore USA

India Philippines Indonesia

Russia Brazil South Africa

Saudi Arabia

Thailand Chile Portugal

Iran

Taiwan Denmark Iceland Israel

Croatia

Greece

Venezuela

Sri Lanka Ukraine Syria

Cambodia Ethiopia Nigeria

Pakistan Egypt Peru Tunisia Costa Rica Bulgaria

Kazakhstan Colombia

Vietnam

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Indonesia Ireland

Singapore Korea

India

Iceland Thailand

Italy

Japan New Zealand

Canada Mexico

Kenya Egypt Tunisia

Greece

Romania Sri Lanka Kazakhstan

Dominican Republic

Finland Portugal

Hong Kong Chile

Cambodia Ukraine

Venezuela Croatia

Saudi Arabia

Vietnam

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Inbound Foreign Investment Performance

Stocks and Flows, Selected Countries

Source: UNCTAD, World Investment Report (2007)

Inward FDI Stocks as % of

Slovenia

UK

Hungary

Slovakia Czech Republic

Australi a Denmark

Chile Netherlands

Indi a

Brazil

France

Pakista n South Korea

Austria Latvia

Switzerland

Spain

Italy

Norway Germany

Mexico

Portugal

Finland Laos

Cambodia Philippines

Singapore (160.1%, 64.7%)

UK

Canada

France South Africa Ireland

USA India Norway

Netherlands Malaysia (116.4%)

Finland Ukraine

a Poland Bulgaria

Dominican Republic

Slovenia

•Imports as a share of GDP are equally high

Vietnam

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Source: UNComTrade, WTO (2008)

World Export Market

Share (current USD)

Change in Vietnam’s world export market share, 2000 – 2006

Source: Prof Michael E Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard

Business School; Richard Bryden, Project Director Underlying data drawn from the UN Commodity Trade Statistics Database and the

IMF BOP statistics.

Appare l

Fishing and Fishing Products

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Agenda

What is Competitiveness?

• Nations compete to offer the most productive environment for business

• The public and private sectors play different but interrelated rolesin

creating a productive economy

• Competitiveness depends on the productivitywith which a nation uses

its human, capital, and natural resources

capital, returns on natural resources)

how productivelyit competes in those industries

and foreign firms

competitiveness, not just that of export industries

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Social Infrastructure and Political Institutions

State of Cluster Development

• Macroeconomic competitiveness creates the potential for high productivity, but is

not sufficient

Monthly Minimum Wage

USD, log scale, 2008

Source: Global Competitiveness Report, 2008; EuroStat, 2008; Philippines Department of Labor and Employment,

2008 Global Competitiveness Index Score, 2008

New Zealand

Australia Taiwan

Singapore Korea

Malaysia

Cambodia

Philippines Indonesia

Thailand China

Italy

Greece

Slovenia Portugal Czech Republic

Denmark Ireland

United Kingdom Japan / Belgium / France

Germany

Hungary Poland Slovakia

Latvia Romania

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BCI Value, 2007

Dynamism Score, 2002 - 2007 Below average Average Above average

Nicaragua India

Bangladesh

Rate of Competitiveness Improvement

Low Income Countries, 2002 - 2007

Paraguay

El Salvador

Chad Mozambique

Madagascar Nigeria Gambia

• Monetary policy

– Inflation – Interest rate spread

Social Infrastructure and

Political Institutions

Macroeconomic Policies

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Basic health and education

+Solid provisionof basic services

– Increasing concerns about the qualityof these

+ High levels of political stability

+ Increasing decentralizationof economic

policy responsibilities

– Little effective policy dialogue

–Corruptionremains a significant challenge

Rule of law

+Quality of lawstends to be good

– Effectiveness of implementationremains

Taiwan

M

aysia Br il In a

Thaind

Sr an

Philippi

nes

Indo

sia

China V

Ban

glad

h La

Pak

istan

Voice and Accountability Political Stability Government Effectiveness Regulatory Quality Rule of Law Control of Corruption

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Corruption Perception Index, 2007

Note: Ranks only countries available in both years (91 countries total)

Source:Global Corruption Report, 2007

Change in Rank, Global Corruption Report, 2007 versus 2001

Bangladesh

Indonesia

Ireland Portugal

Egypt

Iceland

Czech Republic Slovakia South Korea

Latvia

India Slovenia

Thailand

Switzerland

France

Romania Turkey

Estonia

Austria Germany Japan

China

Norway UK

Malaysia Lithuania

Colombia

Hungary Taiwan Spain Hong Kong Chile United States

South Africa

Mexico Croatia Italy

Poland Brazil

Argentina Israel

Venezuela

Russia

Uruguay

New Zealand Sweden

Tunisia

Peru

Tanzania Uganda Senegal

Philippines

Pakistan

Greece Jordan

Ukraine Panama

(e.g registration, permitting)

– Information and transparency

– Scientific and technological

infrastructure

Microeconomic Competitiveness: Quality of the

Business Environment

Context for Firm Strategy and Rivalry

Related and Supporting Industries

Factor (Input) Conditions

Demand Conditions

Availability of suppliersand

supporting industries

Sophistication of local

customers andneeds

– e.g., strict quality, safety, and environmental standards

• Many things matterfor competitiveness

• Successful economic development is a process of successive upgrading, in which the business

environment improves to enable increasingly sophisticated ways of competing

Local rules and incentives that encourage investment and productivity

– e.g incentives for capital investments, intellectual property protection

Vigorous local competition

– Openness to foreign and local competition

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• Local competition (rank 75)

– E.g., intensity of local

competition

• Government intervention (rank 119)

– E.g., SOE market dominance

• Trade barriers (rank 113)

– E.g., level of import tariffs

Competitive Disadvantages Competitive Advantages

Vietnamese Business Environment

Vietnam’s Relative Position 2008

Note: Rank versus 130 countries; overall, Vietnam ranks 102 nd in 2008 PPP adjusted GDP per capita and 76 th in New Global Competitiveness

Source: Institute for Strategy and Competitiveness, Harvard University (2008)

Source: Index of Economic Freedom (2008), Heritage Foundation

Vietnam

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• Local competition (rank 75)

– E.g., intensity of local

competition

• Government intervention (rank 119)

– E.g., SOE market dominance

• Trade barriers (rank 113)

– E.g., level of import tariffs

• Energy infrastructure (rank 109)

– E.g., quality of electricity supply

• Access to finance (rank 109)

– E.g., financial market sophistication

• Innovation infrastructure (rank 99)

– E.g., patents per capita

• Logistical infrastructure (rank 96)

– E.g., quality of roads

Competitive Disadvantages Competitive Advantages

Vietnamese Business Environment

Vietnam’s Relative Position 2008

Note: Rank versus 130 countries; overall, Vietnam ranks 102 nd in 2008 PPP adjusted GDP per capita and 76 th in New Global Competitiveness

Source: Institute for Strategy and Competitiveness, Harvard University (2008)

• Especially in land ownership in rural areas significant problems remain

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State-Owned Enterprises (SOEs) in Vietnam

• SOEs continue to play a dominant role in the Vietnamese economy,

despite the commitment to privatization

• Government oversight of these companies and their spending is

limitedand largely reactive

• The costs of slow progress on privatization are high for Vietnam’s

competitiveness

– Retards entry of new private companies

financed through soft credit

• An effective privatization program strategy for Vietnam must shift

curtail anti-competitive practices

– Minority stakes can distribute ownership more widely

Sources: HBS student team research (2003) - Peter Tynan, Chai McConnell, Alexandra West, Jean Hayden

Hotels

Attractions and Activities

e.g., theme parks, casinos, sports

Airlines, Cruise Ships

Travel agents Tour operators

Restaurants Property

Services

Maintenance

Services

Government agencies

e.g Australian Tourism Commission,

Great Barrier Reef Authority

Souvenirs, Duty Free

Banks, Foreign Exchange

Local Transportation

State of Cluster Development

Tourism Cluster in Cairns, Australia

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Appare l

Fishing and Fishing Products

Technology

Textiles

Prefabricated Enclosures and Structures

Leather and Related Products

Forest Products

Total Services

Power and Power Generation Equipment

Construction Materials

Lighting and Electrical Equipment Medical Devices

Publishing and Printing

Metal Mining and Manufacturing

Entertainment

Building Fixtures and Equipment

Sporting, Recreational and Children's Goods

Exports of US$1.1 Billion

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Furniture Building Fixtures, Equipment &

ceuticals

Biopharma-Power Generation

Aerospace Vehicles &

Defense Lightning &

Electrical Equipment Financial

Services Publishing

& Printing

Entertainment

Information Tech.

cations Equipment

Communi-Business Services

Distribution

Services

Forest Products

Heavy Construction Services

Prefabricated Enclosures

Tobacco

Medical Devices

Analytical Instruments Education &

Knowledge Creation

Note: Clusters with overlapping borders have at least 20% overlap (by number of industries) in both

directions.

Marine Equipment

Aerospace Engines

Heavy Machinery

Sporting

& Recreation Goods

Automotive

Production Technology Motor Driven

Products

Metal Manufacturing

ceuticals

Biopharma-Power Generation

Aerospace Vehicles &

Defense Lightning &

Electrical Equipment Financial

cations Equipment

Communi-Business Services

Distribution

Services

Forest Products

Heavy Construction Services

Prefabricated Enclosures

Tobacco

Medical Devices

Analytical Instruments Education &

Knowledge Creation

Note: Clusters with overlapping borders have at least 20% overlap (by number of industries) in both

directions.

Marine Equipment

Aerospace Engines

Heavy Machinery

Sporting

& Recreation Goods

Automotive

Production Technology Motor Driven

Products

Metal Manufacturing

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Geographic Levels and Competitiveness

Broad Economic Areas

• Many competitiveness drivers occur

• Theallocation of competitiveness

levels is a crucial policy challenge

Specialization of Regional Economies

Selected U.S Geographic Areas

Boston

Analytical Instruments Education and Knowledge Creation Communications Equipment

Los Angeles Area

Atlanta, GA

Construction Materials Transportation and Logistics Business Services

Raleigh-Durham, NC

Communications Equipment Information Technology Education and Knowledge Creation

Wichita, KS

Aerospace Vehicles and Defense Heavy Machinery Oil and Gas

Note: Clusters listed are the three highest ranking clusters in terms of share of national employment.

Source: Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School, 11/2006.

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Source: Vietnam Provincial Competitiveness Index 2006 (USAID)

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• Eliminating

trade and investment barrierswithin the region

• Simplifying and

harmonizing

cross-border

regulations and paperwork

• Coordinating

monopoly and

anti-fair competition policies

• Harmonizing

environmental standards

• Harmonizing product safety standards

• Establishing reciprocal

consumer protection laws

• Opening

government procurement

within the region

cross-– Tourism – Agribusiness – Transport &

Logistics – Business services

• Creating a regional marketing program

• Sharing best practicesin government operations

• Creating regional

institutions

– Dispute resolution mechanisms – Regional development bank

• Developing a regional negotiating position with

international organizations

Factor

(Input)

Conditions

Regional Strategy &

Governance

Context for Strategy and Rivalry

Related and Supporting Industries

Demand Conditions

Economic Coordination Among Neighbors

Enhancing Productivity

Macroeconomic Competitiveness

• Coordinating programs to improve public safety

Tiêu đề	Vietnam’s Competitiveness and the Role of the Private Sector
Trường học	Harvard Business School
Chuyên ngành	Economics / Strategy
Thể loại	presentation
Năm xuất bản	2008
Thành phố	Ho Chi Minh

Định dạng
Số trang	35
Dung lượng	1,07 MB