The relationship between the industry competitiveness and factors supporting the development of cluster Case study of the cluster of the digital content industry in Vietnam

NGUYEN VAN VEN THE RELATIONSHIP BETWEEN THE INDUSTRY COMPETITIVENESS AND FACTORS SUPPORTING THE DEVELOPMENT OF CLUSTER: CASE STUDY OF THE CLUSTER OF THE DIGITAL CONTENT INDUSTRY IN VIE

MINISTRY OF EDUCATION AND TRADING

UNIVERSITY OF ECONOMICS OF HO CHI MINH CITY

……….  ………….

NGUYEN VAN VEN

THE RELATIONSHIP BETWEEN THE INDUSTRY COMPETITIVENESS AND FACTORS SUPPORTING THE DEVELOPMENT OF CLUSTER: CASE STUDY

OF THE CLUSTER OF THE DIGITAL CONTENT INDUSTRY IN VIETNAM

Major: Business Management Code:: 62.34.05.02

SUMMARY OF ECONOMIC DOCTORAL THESIS

Ho Chi Minh City –2015

THE WORK HAS BEEN SUCCESSFULLY COMPLETED AT: UNIVERSITY OF ECONOMICS OF HO CHI MINH CITY

Sience Instructors:

1 Ph.D NGUYEN VAN DUNG

2 Ph.D NGUYEN ĐINH LUAN

PUBLISHED SCIENTIFIC WORKS

1 Nguyen Van Ven, 2013 Analysis of Progress of Global Digital

Content Industry to apply in Viet Nam Busines Finance – corporate

finance department - Ministry of Finance, ISSI: 1859-3887 (9): 33-37.

2 Nguyen Van Ven, 2013 Cluster approach: To determined the

Clustering Structure of digital content industry in Viet Nam Business

Finance – corporate finance department - Ministry of Finance, ISSI:

1859-3887 (10): 16, 17, 18, 19, 23

3 Nguyen Van Ven, 2013 Cluster development of digital content

industry in Viet Nam Economy and Forecast Review, ISSN

0866.7120 (18): 56, 57, 58

4 Nguyen Van Ven, 2015 Recognizing competition, competitiveness

to contributing oriented, policy makers promote Vietnam's economic growth in the economic integration of the Asian community

Proceedings of Scientific Conference Asian Economic Community,

opportunities and challenges for Vietnam enterprises University of Economics and Finance HCMC, 8/2015

CHAPTER 1: OVERVIEW OF THIS RESEARCH

1.1 INTRODUCTION

The need inevitable to use information for the personal making of decision has existed and has evolved along with the evolution of human society In the past, the communication of information among people without the assistance of information technology encountered many difficulties because of the geographical distances Since the information technology came to life the time for information communication has considerably improved for people; as a result, everyone may have opportunities to access information from distance in an easy manner The recent advances in technology resulting from the technological convergence

of the three fiels including Information Technology, telecommunications, and communications has given to the birth of a new economic industry – Digital Content Industry (DCI) The birth of Information science has made our world become closer, the development information technology in a geometric progression has facilitated the growth of information communcation to serve the business of transportation and supply of goods and services to different remote places in the World (Friedman, 2005) DCI

is quickly considered as an important economic industry with the function

to supply digital content infrastructure to other interdisciplinary industries

to contribute the whole development of every countries or nations The Government is fully aware of the importance of DCI to the national

economy, so the Government (2007) issued the Decision No 901/QĐ-TTG,

the Decision No.: 55/2007/QĐ-TTg, and the Decision No 56/2007/QĐ-TTg

in a timely fashion to make consideration and approval of DCI as a key economic industry in the year 2007, which was the year of the creation of

“Vietnam Institute of Software and DCI as a landmark to initiate many

“studies of matters” concerning Cluster DCI, especially to research the

relationship of Industrial Competitiveness and the assistance by the

development of Cluster DCI in Vietnam, which will be presented in this Study

1.2 BASIC OF THIS RESEARCH

1.5 SUBJECT MATTER AND SCOPE OF THIS RESEARCH 1.5.1 Subject matter of the research:

The factors which may have impacts on the industrial competitiveness and

supports for cluster development of DCI

1.5.2 Scope of the research: The study of Cluster DCI in Vietnam focuses

on main factors having impact on the competitiveness of DCI and supports for cluster development of DCI The period for the study commenced in

2009 and ended in 2015

1.6 RESEARCH METHOD:

Mixing qualitative and quantitative method

1.7 THE NOVELTY OF THIS TOPIC AND STRUCTURE OF THE RESEARCH

1.7.1 The novelty of this topic

About the theory: The Thesis has developped the scales in a model

of three main components, that is: (1) agent which has impact on the industrial competitiveness; (2) perceived of the total impacts of the industrial competitiveness, and (3) elements belongng to the groups supporting the Cluster development The Thesis has verified the relationship between “the industry’s competitiveness” and the support to the Cluster development in the DCI in Vietnam; in which the competitiveness has strong impacts on the support to the development of Cluster, and “the support to development” has a smaller impact on “the

competitiveness” In addition, the Thesis has rejected the factor

“geographic proximity” or “geographic concentrations of inter-connected companies” manifesting in the connotation of the Concepts of Cluster for it

is not suitable to the circumstance of Cluster DCI in Vietnam A new factor which has been developed in the group of factors giving support to the Cluster development is “the soft factor – social capital” in the case of research of the Cluster of the DCI

About the practice:, the outcome of the research of the Thesis has

suggested implications for policies and management to help policy makers

to have a reference to a proper direction in making decisions to enhance the competitiveness and the support to Cluster in the context of the development of the DCI in Vietnam

1.7.2 Structure of the research: The study consists of 05 chapters which

are presented in the following order: Chapter 1- Overview of the study; Chapter 2- Theoretical Foundation and Model; Chapter 3- Research design; Chapter 4 – Research result; Chapter 5 – Discussion of Research result and implications for policies and management

CHAPTER 2: THEORETICAL FOUNDATION AND MODEL

2.1 BASES OF THEORETICAL FOUNDATION

2.1.1 Competition: Traditionally competition attaches to the Classical

theorists such as Smith (1776), Ricardo (1817); the neoclassical economists such as Marshall (1890), Walras (1874) and other school theorists like Robinson (1933) The nature of competition according to the traditional

conception are shown by scholars through the aspects as summarized below

Traditional conception of competition

Competitive space

Consequences

of competition

Market mechanism

Group of orientation theories

Market mode:

Freedom, perfect, monopoly

Win-Lose “Invisible

hand” between Balance

supply and demand

Source: Author’s Result of Analysis

A number of typical economists with a modern conception of competition are Friedman (2005), Porter (1990), Barney (1995), Prahalad & Hamel (1990), Gimeno (2004), Gnyawali & Park (2009), lado & đtg (1997), Peng & Bourne (2009), Luo (2007) who have pointed out that the nature of the modern conception of competition is “competition and cooperation” so that the economy can be impulsed in a global cooperation environment

Modern conception of competition

Objectives

of competition

Competitive space

Consequences

of competition

Market mechanism

Group

of orientation theories

The market should

be regulated

by the State

Win- Win

“Visible Hand”

Economic evolution

Source: Author’s Result of Analysis

2.1.2 Competitiveness: In the work the typical studies of the industrial

competitiveness represent the studies of porter (1990); Mataraarachchi & Heenkenda (2012), Joshi & Dixit (2011), Savić & đtg (2011), Padurean & Tuclea (2008), Bakan & Dogan (2012: 449), Mehrizi & Pakneiat (2008),

Choe & Brian (2011a) and Choe & đtg (2011b)

2.1.3 Cluster

In the world Cluster has attracted the attention of many practioners and academics whose typical researches are presented below:

Summary of the process of development of the Cluster concept Group Academic authors Meaning column of concepts

1 Marshall (1890), Krugman

(1991a, 1991b) Rosenfeld

(1995: 12), Swann & Prevezer

(1996:1139), Hill & Brennan

of the concept manifests through the

column “geographic concentrations

Saxenian (1994), Doeringer &

Terkla (1995), Bergman &

Feser (1999), Feser & Lugar

in geographic distance, including economies of localization, value chain linkage, and technology innovation among others localization economies, value chain linkage, and technology innovation is explained

on the basis of Porter’s research through the meaning column

2.2 BASES OF THEORETICAL FOR MODEL BUILDING2.3 MODEL AND PROPOSAL OF SUPPOSITIONS RESEARCH

The model of research includes three elements : (1) groups of

decisive factors having impact on the competitiveness as being built on four main pillars- namely including: (a) factor conditions; (b) demand conditions; (c) related and supporting industries; and (d) firm strategy, structure, and rivalry; (2) Perceived total impacts of the industrial competitiveness; (3) supports for cluster development, including: (a) Government;(b) chance; (c) soft factor – social capital; (e) geographic concentrations of companies Through the said description, the interrelation

of the subject matters is modelled into a model of a research of the thesis

Source: Author’s proposal

Source: Author’s proposal

Summary of research suppositions:

H1a H1b

H1c H2a H2b H2c

H3a H3b

Oriented technology

Industrial competitiveness

Related and supporting industries

Supply chain

Added value

Supports Cluster Development

H5

H6

-H1b: Infrastructure having same the directional impact on the total impacts of the industrial competitiveness of DCI

-H1c: Resources having the same directional impact on the total impacts of the industrial competitiveness of DCI

of the industrial competitiveness of DCI

- H2b: New products having the same directional impact on the total impacts of the industrial competitiveness of DCI

- H2c: Business environment having the same directional impact on the total impacts

of the industrial competitiveness of DCI

-H3b: Cooperation between Organizations/companies having the same directional impact on the total impacts of the industrial competitiveness of DCI

- H3c: Technology orientation having the same directional impact on the total impacts

of the industrial competitiveness of DCI

4 Elements H4a: Supply chain having the same

CHAPTER 3: RESEARCH DESIGN 3.1 BASES OF THEORETICAL FOR RESEARCH METHOD3.2 PROCEDURE OF RESEARCH

3.2.1 Mix research method: This study is the combination of qualitative

research and quantitative research The qualitative research was conducted through semi-structural interviews of and group discussion with the surveyed subject matters Subsequently, the author conducted a preliminary quantitative research by interviewing persons with legitimate 123 questionnairs representing 95% of the interviewed persons and 360 issued official questionnairs of which 306 Questionnairs were collected representing 85% of the interviewed person The result of the collected questionnairs meets the requirements of the size of a research sample The research process was proposed by the author as follows:

PROCEDURES STEPS TO CONDUCT QUANTITY

Studying resources

of materials

Determination basis

1.Identifying Cluster 2.Framework of theory 3.Model of theory supposition

Adjusting the questionnaire and scales

Preparation for the structureal interview: time, place, list of participants, semi-structural questions

Conducting the structureal interview

semi-Data collected from the semi-structureal interview

Data collected from the concentration group discussion

3.2.2 Research process

PROCEDURES STEPS TO CONDUCT QUANTITY

correting data

Classifying data into groups

Analysis and presenting

Creating a preliminary exchange table and recording results

opinion-Preliminary survey

Checking the reliability of the Cronbach’s Alpha scale for the 1 st time

Analysing factors

Checking the reliability

of the Cronbach’s Alpha scale for the 2 nd time

Creating a main exchange table and recording results

opinion-Official survey

Preparation of tools for verification

Verification

of CFA

Verifying the model

on the basis of SEM

Presenting the result of the research, evaluation and proposal

0

123

306

3.2.3 Design of qualitative research

3.2.3.1 Pilot Study: The model survey of 10 persons voluntarily

participating in the research was conducted by giving assistance to the interviewed, evaluating the legibility of the questions, spelling mistakes, degree of expression of language easy to understand, accuracy of the contents, time for conducting group concentration discussions and semi-structural interviews

3.2.3.2 The group concentration discussions focusing: On 16 participants

created opportunities to carry out a research into their interrelation and suggested many new ideas helping the researcher to be profound aware of the matter subject to the research and simultaneously to receive reactions and feedbacks in a controlling and systematic manner from the participants

in the research After the end of the step of the group concentration discussions, a set of data was recorded and was processed, the findings of the research have good contribution to the preliminary questionnair

3.2.3.3 The semi-structural interview: In the semi-structural interview of

6 selected persons, the collected data shows a concrete knowledge, flexibility, exploitation of reactions and explanation of the circumstances relating to the research contents This research also used the Location Quotient Calculator (LQ) to identy Cluster DCI, using Brainstorming technique to encourage the discussing group to use their intelligence, using SPSS Amos Version 20 to help the analysis of orientation data and using graphical design engineering for SEM model, using the SWOT tool to make lesson plan for the qualitative analysis to determine the strength and weakness, opportunities and risks as to the competitiveness of DCI After the end of the semi-structural interview, a set of data was recorded and was processed, the findings of the research have additional contribution to the perfection of the preliminary questionnair

3.2.4 Design of quantitative research

3.2.4.1 Preliminary research: A preliminary research was conducted with

135 opinion-exchange slips issued to the parcipants of which 123 legitmate slips were collected accounting for 91% the interviewed person In