Doanh nghiệp dệt may việt nam trong bối cảnh cách mạng công nghiệp lần thứ tư tt tieng anh

Rationale and research objectives 2.1 Rationale The aim of the thesis is to clarify the development issues of Vietnamese textile and garment enterprises in the context of the ongoing I

VIETNAM ACADEMY OF SOCIAL SCIENCES

GRADUATE ACADEMY OF SOCIAL SCIENCES

TRAN THI VAN ANH

VIETNAMESE TEXTILE AND GARMENT ENTERPRISES IN THE CONEXT OF THE FOURTH INDUSTRIAL REVOLUTION

TÀI THỦY-BỘ

NỘI ĐỊA Ở ĐỒNG BẰNG SÔNG CỬU LONG

Concentration: Development Economics

SUMMARY OF DOCTORAL THESIS

HA NOI – 2019

This doctoral thesis is accomplished at:

GRADUATE ACADEMY OF SOCIAL SCIENCES

VIETNAM ACADEMY OF SOCIAL SCIENCES

Academic advisors:

1 Dr Phi Vinh Tuong

2 Dr Duong Dinh Giam

Reviewer 1: Prof PhD Do Duc Binh

Reviewer 2: Assoc Prof PhD Vu Hung Cuong

Reviewer 3: Assoc Prof PhD Nguyen Van Thao

This doctoral thesis is to be defended before the Thesis Defense Committee

of the Graduate Academy of Social Sciences,

at: Graduate Academy of Social Sciences, 477 Nguyen Trai, Thanh Xuan,

Hanoi

Time: Date:

Archived at:

INTRODUCTION

1 Research justification

Textile and garment enterprises in Vietnam have been utilizing most

of development opportunities brough about by international economic integration, particularly after Vietnam’s official membership of the World Trade Organization (WTO) The developtment of Vietnam’s textile and garment enterprises have contributed to the increase of earnings in foreign currency and the textile and garment export turnover, which climbed from USD 5.85 billion in 2006 to USD 36.14 billion in 2018, seven times bigger after one decade This development reflected more clearly in the export structure of Vietnam’s textile and garment industry Besides garment products as the main export, the textile and garment enterprises have traded internationally products such as fibers, fabrics, textile materials or non-woven fabrics The total export value of fibers, fabrics or textile materials

in 2018, which were were respectively USD 3.95 billion, USD 1.66 billion and USD 1.23 billion, was higher than the total export value of 2006 The development of textile and garment enterprises have also increased the labor demand In recent years, the textile and garment labor force has accounted for more than 20% of the total employment in manufacturing and nearly 5% of the country’s labor force The industry in

2017 created about 2.5 million jobs, of which 80% were for female workers

With such development, the textile and garment industry has been contributing to the process of industrialization and modernization, the transformation of economic and labor structures, and economic growth Morever, the growth of textile and garment enterprises also acts a buffer for the economy against shocks due to negative impacts of international or domestic crises Even in the period of economic crisis, Vietnam’s textile and garment export turnover reached USD 9.12 billion in 2008 and USD 9.07 billion in 2009, higher than that of 2006 and 2007

Despite such contribution to Vietnam’s economic achievements, textile and garment enterprises face certain obstacles in development These have been the focus of many studies, such as investment mobilization for production expansion, technological renovation, labor quality and fluctuation of labor number, limited capacity for research and

development (R&D), or barriers in evlevating to higher value-added phases

of the global value chains

While the aforementioned development issues are still being addressed, the fourth industrial revolution taking place in recent decades continues to pose new development challenges and issues for Vietnam’s textile and garment enterprises Under the influence of the fourth industrial revolution or Industry 4.0 (hereinafter referred to as Industry 4.0), the technology and methods for textile and garment production would have fundamentally changed, not only for the matter of how to produce but also

to produce for which market sizes thanks to the application of new based technologies

internet-More than ever, enterprises in developed economies with the early application of the achievements of Industry 4.0 and international economic integration have gain advantages and posed challenges for businesses in developing and transitioning economies, including Vietnam While the role

of textile and garment enterprises in the process of industrialization and modernization in developing and transitioning economies is undeniable, promoting the development of these enterprises faces increasing difficulties

In order to reach the goals of industrialization and modernization in the context of Industry 4.0, the continued promotion of Vietnamese textile and garment enterprises is necessary because of its important roles in the economy in terms of job creation, contribution to the state budget, transformation of economic structure, and as a buffer against the shocks caused by structural changes and integration With that important role of textile and garment enterprises and challenges brought by Industry 4.0, the

author selected the topic of “Vietnam Textile and Garment Enterprises in

the context of the Fourth Industrial Revolution” for a doctoral thesis

2 Rationale and research objectives

2.1 Rationale

The aim of the thesis is to clarify the development issues of Vietnamese textile and garment enterprises in the context of the ongoing Industry 4.0 and propose a number of textile and garment enterprise development solutions

2.2 Research objectives

The thesis aims at specific research objectives as follows:

- To identify some theoretical issues on enterprise development, focusing on determinant factors to the development of textile and garment enterprises in the context of Industry 4.0; to draw some practical lessons learned from the practices of textile and garment development in some countries

- To assess the current development situation of Vietnam’s textile and garment enterprises in the period of 2007-2018 in order to identify some development issues; to analyze strengths, weaknesses, opportunities and threats facing these enterprises in the context of Industry 4.0

- To propose some solutions for the development of textile and garment enterprises in the context of Industry 4.0 from the author’s viewpoints

3 Research focus and scope of study

4 Research approach and methodology

4.1 Research approach

Based on the combination of enterprise and value chain theories, the thesis assesses the recent development of textile and garment enterprises in Vietnam and identifies the factors affecting their development; to analyze opportunities and challenges facing textile and garment enterprises in the context of Industry 4.0 and to offer specific solutions and recommendations

to promote their development thereby

4.2 Methodology

The thesis adopts qualitative research methods with the following analytical tools:

Desk research: This method is used bfor the review of literature,

both in theory and practice, to clarify the theoretical and practical issues that have been resolved regarding the textile and garment enterprise development This lays a groundwork for the author to identify research gaps for the selected issues and for the contents and analytical methods that can be inherited from previous studies

Methods applied include generalization and comparative analysis, statistical description, inductive and deductive reasoning: These methods

are used to analyze and assess the development situation of textile and garment enterprises in 2007-2017, to synthesize development issues and to compare development issues of Vietnamese textile and garment enterprises before and after Industry 4.0 takes place

In-depth interviews were also applied to clarify some specific

development issues of Vietnamese textile and garment enterprises, for example the connection between Vietnamese textile and garment enterprises and foreign enterprises in the global textile and garment value chain The author interviewed a number of experts in the indutry, including experts of the Vietnam National Textile and Garment Group, the Association of Garment Textile Embroidery and Knitting in Ho Chi Minh City, and several leaders of textile and garment companies in Hanoi and Ho Chi Minh City Ho Chi Minh (with attached list) Not only applied to the implementation of the situation analysis content, this method is also used in better understanding the opportunities and challenges of development of Vietnamese textile enterprises in the coming period

SWOT analysis was used in Chapters 3 and 4, which helps to clarify

the strengths, weaknesses, opportunities, and threats (SWOT) of Vietnamese textile and garment enterprises in the context of Industry 4.0 Based on SWOT analysis, the thesis proposes solution groups for the aforementioned issues

5 Scientific contributions

Firstly, the thesis contributes to systematization of theoretical and practical issues on the development of textile and garment enterprises with

rapid development of production and business models under the influence

of Industry 4.0 It is, thereby, to identify criteria to assess the development

of these enterprises in the new context

Secondly, the development of Vietnamese textile and garment enterprises in the period of 2007-2018 is assessed on the basis of applying the aforementioned theoretical basis and the development issues of Vietnamese textile and garment enterprises are identified accordingly in the period before and after Industry 4.0 is officially discussed by scholars and policy makers (2014)

Thirdly, the thesis provides explanation for influencing factors to the development of these enterprises in the context of Industry 4.0 and also fo the causes of their development issues

Lastly, a number of solutions are proposed in order to develop Vietnamese textile and garment enterprises in a new context, which are based on the views and orientations of the author from the perspective of Industry 4.0

6 Theoretical and practical significance

Theoretically, the thesis identifies more theoretical issues on enterprise development in the context of traditional (i.e physical) production methods being replaced by new production methods (i.e combination between physical and non-physical platforms)

In practical terms, the dissertation contributes additional arguments

to build the development orientation of Vietnam’s textile and apparel enterprises in the context of Industry 4.0 This is a reliable reference document for researchers and policy makers who are interested in the development of textile and garment enterprises

7 Structure of the thesis

In addition to the Introduction, Conclusion, Appendix and References, the thesis is structured in four chapters as follows:

Chapter 1 Review of literature

Chapter 2 Theoretical rationale and international practices for

textile and garment enterprises development

Chapter 3 Current development situation of Vietnamese textile and

garment enterprises in 2007-2018

Chapter 4 Solutions for the development of textile and garment

enterprises in the context of Industry 4.0

CHAPTER 1 REVIEW OF LITERATURE 1.1 Studies on textile and garment enterprises in the world

Business development issues are always concerned by governments because of its role in creating material wealth and meeting the needs of material and refined goods of the people Enterprise development is approached from various perspectives, such as micro level (firm level), industry level, national level or global level (production network or production chain/value chain)

At firm-level, on the basis of resource-based theory of the firm and industrial organization theory, research so far have focused on the role of resources for the development of businesses and the formation of economic sectors Accordingly, the existence and development of enterprises depend

on the resource groups: (a) physical resources (such as machinery, factories, land); (b) human capital; and (c) institutional capital Facing the challenges of sustaining and increasing “super profit” to survive and thrive, businesses must address the issue of mobilizing and effectively using three aforementioned groups of resources

At sector level, in addition to internal factors, the development of enterprises also depends on external resources, which are formed on the basis of increasing the number of enterprises concentrated in a geographical range (industrial clusters, industrial zones, regions) contributes to reducing the cost of transporting goods of each business as well as reducing the labor market access costs This is the basis for businesses to maintain a competitive advantage

At global level, studies discuss the development of enterprises in the organization of global production networks and production chains This

is a way for businesses to benefit more from specialization and production cooperation

1.2 Vietnamese studies on textile and garment enterprises

Studies are based on the approaches of theories of business, industrial organization and value chains From that, the factors affecting the development of textile enterprises in the context of Industry 4.0 are identified

Firstly, internal factors affecting business results of enterprises include capital, firm size, labor and technology

Second, the external factors influencing enterprise include infrastructure, industrial clusters, industrial zones/parks, government policies

Studies also show that technological breakthroughs of Industry 4.0 are expected to change the whole textile and garment industry, as well as identifies opportunities and challenges facing garment businesses in this new context

1.3 Research gap

The development issues of enterprises in general and of textile and garment enterprises in particular in the world have been approached and solved based on the theories of development economics and theories of business, industrial, organization or value chains

However, each study has its own objectives, approaches and scopes, so business development issues could not all be addressed Especially, the change of production methods and business models under the influence of Industry 4.0 has been creating new development issues for textile and garment enterprises Thus, it is necessary to continue studying and identifying solutions for serving the development of the textile and apparel business

CHAPTER 2 THEORETICAL AND PRACTICAL RATIONALE FOR DEVELOPMENT OF TEXTILE AND GARMENT ENTERPRISES 2.1 Fundamental concepts

2.1.1 Textile and garment enterprises and their development

Textile and apparel enterprises are those who engaged in the

process of creating intermediate and/or final products to meet the needs of clothing for human

Development of textile and apparel enterprises is the promotion of the participation of domestic private enterprises in the textile and garment industry to increase both the number of enterprises and the quality of enterprises in order to improve the competitiveness of the whole textile and garment industry in the context of Industry 4.0 and international integration The ultimate goal of developing textile and garment enterprises

in the context of Industry 4.0 and integration is to increase the proportion of value-added value created by domestic textile enterprises and to establish textile and garment value chains which are organized and developed by Vietnamese enterprises

2.1.2 Characteristics of textile and garment enterprises

According to the approach of the manufacturing industry of an economy, textile and garment enterprises have the following characteristics:

 First, textile and garment enterprises need economies of scale

at the firm level but they in fact could operate in any production scale

Enterprises directly involved in physical production processes often produce smaller value-added products than those by enterprises engaged in non-physical production stages

Participation in the textile and garment value chain depends on the development strategy of the “buyer” firm

2.1.3 Criteria and indicators to evaluate the development of textile enterprises

Firstly, criteria for assessment in terms of quantity: number of enterprises

Secondly, criteria for evaluation of the upgrading of textile and garment enterprises in the global value chain: indicators of relative market share, relative export proportion, export value of the general product unit, and aggregate unit value

Thirdly, criteria for evaluating in terms of quality: Labor efficiency ratio (LER), Return on equity (ROE); Return on assets (ROA)

Fourthly, indicators reflect the development structure: Enterprise structure by ownership; enterprise structure by scale; enterprise structure by region; structure by number of years of experience

2.2 Industry 4.0 and determinant factors to enterprise development in the context of Industry 4.0

2.2.1 Industry 4.0 and its impact on the textile and garment industry

According to Klaus Schwab, Chairman of the World Economic Forum, Industry 4.0 is a term that encompasses a range of modern automation technologies, data exchange and manufacturing Industry 4.0 is defined as a term for the technologies and concepts of an organization in the value chain associated with physical systems in cyberspace, the Internet

of Things (IoT) and Internet of services (IoS)

In essence, Industry 4.0 is based on digital technology and integration of all intelligent technologies to optimize production processes and methods Platform technologies such as big data, cloud computing, internet of things, 3D printing technology, biotechnology, new materials technology, robots, etc are and will change the world’s production There are two trends that change digital technology: (1) reduction of costs that spur widespread diffusion of other technologies; (2) combination of various

types of digital technology and convergence of digital and other technologies For example, combining the new sensor technology with big data analytics, cloud computing and and the IoT is promoting automation and smart manufacturing systems

Industry 4.0 has the following fundamental characteristics:

First, the nature of Industry 4.0 is a combination between the real and virtual worlds on the digital platform, forming the virtual production system (Cyber-Physical Production System – CPSS) that changes the principle of production

Secondly, Industry 4.0 has brought about historical changes in terms of scale, speed and influence compared to previous industrial revolutions

Third, Industry 4.0 emphasizes integration and connection between technologies, but does not exclude the specific application of individual technologies

2.2.2 Determinant factors to the development of textile and garment enterprises in the context of Industry 4.0

The development of textile and garment enterprises is influenced

by internal and external factors:

Internal factors include human resources, (financial and other material) capital, and technological capital

External factors include: (i) the development of production networks and industry clusters; (ii) the quality of infrastructure; and (iii) the government policies

2.3 Internaltional practices of textile and garment enterprise development and lessons for Vietnam

Based on the analysis of two examples of China and India, the thesis draws some lessons for developing textile and garment enterprises in Vietnam as follows:

government policies