(VEN) – Mrs.Christine Busser Mauron, Deputy Head of Mission, Head of Economic Affairs of the Swiss Embassy in Vietnam talked with Vietnam Economic News’ Nguyen Huong on trade promotion and capacity building to increase the international competitiveness of Vietnamese small and medium enterprises (SMEs).
The bilateral agreement for a four-year program on “Decentralized Trade Support Services for Strengthening the International Competitiveness of Vietnamese Small and Medium-sized Enterprises” reflects the effort of Swiss Government in helping Vietnamese SMEs. What are the purposes of this program? What will Vietnamese SMEs get from it?
The new technical assistance program aims at enhancing the export competitiveness of SMEs by strengthening the skills and capacities of the trade promotion offices and trade support institutions in three regions of Vietnam (Hai Phong, Da Nang and Can Tho and neighboring provinces). This decentralized approach as well as the support of local structures and institutions are important in a huge country like Vietnam. We strongly believe that Trade Promotion Organizations and Trade Support Institutions are playing a critical role in assisting SMEs to improve their performance in export markets.
Currently, the private sector, mainly composed of SMEs, is contributing about 50 percent to the Vietnamese GDP, but the share of the SMEs of the total of exports only reach around 10 percent. This indicates untapped potentials and that action is needed to strengthen the SMEs’ export competitiveness. With our new technical assistance program we want to step in at exactly this point.
How do you assess the export competitiveness capacity of Vietnamese SMEs? In your opinion, what should they do to improve their capacity in this field? Do you have any suggestion for them?
The SMEs’ contributions to the export volume are currently underperforming. The potential capacity, however, is much higher. If Vietnam wants to sustainably grow, it needs to “move up the value chain”, from exporting mostly low cost Labour products to exporting high-quality products that are competitive internationally. This is particularly valid for private Vietnamese SMEs who have to survive next to bigger or state-owned companies. Therefore, I can only encourage SMEs to put all efforts in increasing the competitiveness of their products, because this is vital for them and will in a larger context doubtlessly contribute to Vietnamese economy.
Swiss SMEs are considered as the backbone of the economy, so what can Vietnam learn from the model of Swiss SMEs?
The Swiss SMEs have proofed to be resilient in times of crisis, because they are generally more flexible than larger entities. Their size and functionality allow them to adapt more quickly to new circumstances.
But why are they such a strong backbone? It is thanks to their innovative and highest quality products as well as their strong customer service orientation, or in other words: thanks to their competitiveness in domestic and international markets.
It has to be said that SMEs are only able to prosper if the environment is favorable. A level playing field is essential for any business activity, and a solid and well-balanced education system will help to provide the necessary brains. In this context let me highlight that a sound economy does not just need academic brains, but also well-educated young people who can enter the labor market as qualified professionals.
In Switzerland, the dual-track Vocational Education and Training (VET) system provides two-thirds of young people with a solid foundation in a given occupation. And it further explains why the SME perspective is flourishing in our country: The dual-track education system provides plenty of innovative, creative and specialized professionals who work for SMEs or start their own enterprise.
I think that for Vietnam, a VET system that matches the particular needs of the labor market of the country is of utmost importance. This would naturally also strengthen the “Vietnamese SME backbone.”
Switzerland and Vietnam signed a new bilateral program of US$3.89 million for a four-year on “Decentralized Trade Support Services for Strengthening the International Competitiveness of Vietnamese Small and Medium-sized Enterprises”, which aims at strengthening the export competitiveness of SMEs in Vietnam. Specifically, this technical assistance program shall strengthen the skills and capacities of the trade promotion offices and trade support institutions in three regions of Vietnam. The proposed program builds on an earlier SECO-Sida funded Support to Trade Promotion and Export Development in Vietnam for the 2004-2009 Period Aassistance which helped to develop capacities of the newly created VIETRADE and the selected Product Associations at the national level./.