Development scanle and contribution of small and medium enterprises in the vietnamese economy

Nội dung text: Development scanle and contribution of small and medium enterprises in the vietnamese economy

1. INTERNATIONAL C ONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 DEVELOPMENT SCANLE AND CONTRIBUTION OF SMALL AND MEDIUM ENTERPRISES IN THE VIETNAMESE ECONOMY Nguyen Quang Hiep, University of Finance and Business Administration Abstract: The paper analyzes the development and contribution of small and medium enterprises to the Vietnamese economy in recent years. The results show that Vietnam's small and medium enterprises have a strong increase in both scale and proportion of the total number of enterprises in the country. With that development, small and medium enterprises play a huge role in the economic growth of the country as well as the regions. These enterprises operate in all areas of the national economy from industrial production, construction, trade, services created jobs, mobilized domestic capital, exploited and promoted local resources, thereby becoming a driving force for socio-economic development. Key words: Small and medium enterprises, economic restructuring, economic growth QUY MÔ PHÁT TRIỂN VÀ ĐÓNG GÓP CỦA DOANH NGHIỆP NHỎ VÀ VỪA TRONG NỀN KINH TẾ VIỆT NAM Tóm tắt: Bài viết phân tích sự phát triển và đóng góp của các doanh nghiệp nhỏ và vừa đối với nền kinh tế Việt Nam trong những năm gần đây. Kết quả cho thấy các doanh nghiệp nhỏ và vừa của Việt Nam có sự gia tăng mạnh cả về quy mô và tỷ trọng trong tổng số doanh nghiệp của cả nước. Với sự phát triển đó, các doanh nghiệp nhỏ và vừa thể hiện vai trò rất lớn đối với sự tăng trưởng kinh tế của đất nước c ng như các địa phương. Các doanh nghiệp này hoạt động trong mọi lĩnh vực của nền kinh tế quốc dân từ sản xuất công nghiệp, xây dựng, thương mại, dịch vụ đã tạo công ăn việc làm, huy động nguồn vốn trong nước, khai thác và phát huy tốt các nguồn lực tại chỗ của địa phương, qua đó trở thành động lực cho phát triển kinh tế xã hội. Từ khóa: Doanh nghiệp nhỏ và vừa, chuyển dịch cơ cấu kinh tế, tăng trưởng kinh tế 1. Introduction Small and medium enterprises (SMEs) in Vietnam now accounts for about 98% of the total number of businesses operating in the country in which the medium enterprises account for only about 2%, small businesses account for nearly 30%, the rest are micro businesses. With such scale, small and medium enterprises have been playing a very important role in Vietnam's economy. The SMEs are the main places to create jobs and increase income for 120
2. HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 workers, mobilize social resources for development investment, poverty alleviation Every year the small and medium enterprises have created over one million new Jobs; employs nearly 60 % of social labor and contributes about 48 % of GDP to the country. With the sharp increase in both quantity and quality, the small and medium enterprises have contributed significantly to the economic growth objectives as well as contribute to the budget of the state; contribute significantly to mobilizing investment capital from people for socio-economic development. 2. Development scale and contribution of small and medium enterprises in the Vietnamese economy 2.1. Number of small and medium enterprises by size of labor and capital According to Decree No. 39/2018/NĐ-CP, small and medium enterprises are business establishments that have registered their business according to the law, and are divided into three levels: micro, small and medium by the size of the total capital (total capital is equivalent to the total assets determined in the enterprise's balance sheet) or the average number of employees per year (total capital is the priority criteria) . The criteria for classifying small and medium enterprises in Decree No. 39/2018/NĐ-CP are summarized in Table 1. Table 1. The criteria for classifying enterprises by size Micro enterprises Small enterprises Medium enterprises Number Number Number Area Size Total Total of emplo Total capital of employ of employ capital capital yees ees ees from over from from over 3 from over I. griculture, 3 billion 10 20 billion above 10 billion Dong 10 people forestry and Dong or people Dong to 0 people to 20 billion to 100 fishery less or less 100 billion to 200 Dong or less people Dong people from over from from over 3 from over 20 billion II. Industry 3 billion 10 above 10 billion Dong 10 people Dong to and Dong or people 0 people to 20 billion to 100 100 construction less or less to 200 pe Dong or less people billions ople Dong from from over 3 from over from 50 III. Comme 3 billion 10 over 50 billi billion Dong 10 people people to rce and Dong or people on Dong to 50 billion to 50 100 services less or less to 100 billio Dong people people n Dong Source: Adapted articles 6 Decree No. 39/2018/NĐ – CP dated 11/3/2018 According to the criteria mentioned above, most enterprises in Vietnam currently belong to small and medium enterprises. Survey data enterprises of the General Department of Statistics 121
3. INTERNATIONAL C ONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 show that, in 2015 the small and medium enterprises account for about 98% of the total number of enterprises by labor scale and 94% of the total number of enterprises by capital size. By labor size By capital size 100.0 100.0 90.0 90.0 80.0 80.0 70.0 70.0 60.0 60.0 50.0 50.0 40.0 40.0 30.0 30.0 20.0 20.0 10.0 10.0 0.0 0.0 2005 2015 2005 2015 SMEs Large-scale enterprise SMEs Large-scale enterprise Figure 1. Number of small and medium enterprises by size of labor and capital Source: White Paper for small and medium enterprises in Vietnam 2017 In the area of small and medium enterprises, mainly micro and small enterprises, medium enterprises account for a very low proportion. This situation shows the dynamism and flexibility of the Vietnamese economy. However, this is also considered a bottleneck in the process of developing, expanding production and improving the competitiveness of the business community. Small and micro enterprises are often weak in finance, management capacity and especially competitiveness in the current conditions of international integration. a. Number of enterprises by labor size By the end of 2015, our country had 442.486 operating enterprises. Most enterprises are small and medium enterprises, and the proportion of these enterprises on the total number of enterprises in the country tends to increase in recent times. If in 2005, the number of small and medium enterprises was 101.679 enterprises, accounting for 95% of the total number of enterprises, by 2015, the number of small and medium enterprises had reached 433.674 enterprises, accounting for nearly 98% of the total number of enterprises. Of the more than 433.000 small and medium enterprises in 2015, the number of medium enterprises only accounted for about 2%. 122
4. HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 Table 2. Number of enterprises by labor size Năm 2005 2010 2014 2015 Total enterprises 106.616 279.360 402.326 442.486 Micro enterprises 59.730 187.580 288.480 322.236 Small enterprises 38.506 79.085 98.169 103.753 Medium enterprises 3.443 5.618 7.266 7.685 Large enterprises 4.937 7.077 8.411 8.812 State enterprises 4.086 3.281 3.048 2.835 Micro enterprises 54 103 114 90 Small enterprises 1.468 1.256 1.234 1.139 Medium enterprises 666 539 449 407 Large enterprises 1.898 1.383 1.251 1.199 Non-State enterprises 98.833 268.831 388.232 427.709 Micro enterprises 59.280 186.061 285.532 319.097 Small enterprises 35.083 74.218 91.942 97.105 Medium enterprises 2.399 4.440 5.880 6.304 Large enterprises 2.071 4.112 4.878 5.203 FDI enterprises 3.697 7.248 11.046 11.942 Micro enterprises 396 1.416 2.834 3.049 Small enterprises 1.955 3.611 4.993 5.509 Medium enterprises 378 639 937 974 Large enterprises 968 1.582 2.282 2.410 Source: White Paper for small and medium enterprises in Vietnam 2017 In 2014, the number of micro enterprises accounted for 71,7% of all businesses nationwide, increase of nearly 54% compared to 2010. Compared to 2010, the proportion of micro enterprises increased in all economic sectors (state enterprises, non-state enterprises and FDI enterprises). In the opposite direction, the proportion of large enterprises in the total number of enterprises is declining in all types of enterprises. 123
5. INTERNATIONAL C ONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 By economic sector, enterprise size by labor varies not the same. State enterprises are mainly large and medium scale. Meanwhile, non-state enterprises and foreign-invested enterprises are mainly micro and small scale. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2010 2014 2015 Micro enterprises Small enterprises Medium enterprises Large enterprises Figure 2. Enterprises structure in total enterprises across the country according to the size of labor Source: Calculated according to the data on table 2 b. Number of enterprises by capital size Table 3. Number of enterprises by capital size YEAR 2005 2010 2014 2015 Total enterprises 106.616 279.360 402.326 442.486 Micro and smal enterprises 95.088 219.934 305.593 306.735 Medium enterprises 8.166 45.553 74.377 108.180 Larg enterprises 3.362 13.873 22.356 27.571 State enterprises 4.086 3.281 3.048 - Micro and smal enterprises 1.209 603 414 - Medium enterprises 1.480 1.005 864 - Larg enterprises 1.397 1.673 1.770 - Non-State enterprises 98.833 268.831 388.232 - 124
6. HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 YEAR 2005 2010 2014 2015 Micro and smal enterprises 92.252 216.462 301.044 - Medium enterprises 5.435 42.189 70.013 - Larg enterprises 1.146 10.180 17.175 - FDI enterprises 3.697 7.248 11.046 - Micro and smal enterprises 1.627 2.869 4.135 - Medium enterprises 1.251 2.359 3.500 - Larg enterprises 819 2.020 3.411 Source: White Paper for small and medium enterprises in Vietnam 2017 In terms of capital size, most Vietnamese enterprises are small and micro. In 2015, there were 69,32% of Vietnamese enterprises with micro and small capital size, 24,45% of medium enterprises by capital size and only 6,23% of large enterprises. By ownership type, state enterprises have the highest proportion of large enterprises, while FDI enterprises have the lowest proportion of large enterprises. Up to 78% of non-state enterprises are micro and small enterprises, shows that non-state enterprises are still lacking of medium and large enterprises. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2010 2014 2015 Micro and smal enterprises Medium enterprises Larg enterprises Figure 3. Enterprises structure in total enterprises across the country according to the size of capital Source: Calculated according to the data on table 3 125
7. INTERNATIONAL C ONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 2.2. The contribution of small and medium enterprises to the Vietnamese economy The number of small and medium enterprises in Vietnam currently accounts for about 98% of the total number of enterprises operating in the country and plays a very important role in the national economy. Over the years, with the boom in both quantity and quality, small and medium enterprises have significantly contributed to the goal of economic growth, as well as contributed to the state budget and mobilized investment capital from the people for socio- economic development. Small and medium-sized enterprises are the main places to create jobs and increase income for workers, help mobilize social resources for development investment, poverty alleviation Every year the small and medium enterprises have created over one million new Jobs; employs nearly 60 % of social labor and contributes about 48 % of GDP (Investment Review, 2018). The establishment of small and medium enterprises helps to accelerate the process of economic restructuring, contributing to increasing the proportion of industry and services and reducing the proportion of agriculture. In addition, the private sector has also contributed greatly to promotion of market development and innovation of financial economics in Vietnam by creating the new competition environment, promote economic transition in Vietnam. Small and medium enterprises contribute to increasing the dynamics of the economy in the market mechanism by the flexibility of this type of enterprises. Small enterprises can easily adjust operations to help the economy become dynamic, more flexible, adapt to the fluctuations of the world economy. The ability to switch quickly to fill gaps of the market also speaks to the economic stability of small and medium enterprises. Small and medium enterprises are also a place to start the spirit of the business, a place to train and practice business talents, to help them get acquainted with the business environment. Many large enterprises come from startups that are extremely small. There are small enterprises born and have grown into large enterprises that have important influence on the global economy such as McDonald's, Microsoft, Hyundai or in Vietnam such as Vingroup, Hoang Anh Gia Lai These examples have helped the start-up movement in Vietnam to thrive in recent years. Small and medium enterprises have helped exploit and promote local resources well by the advantages of location of production and business activities. Small and medium enterprises were present in most of the regions and localities helps leverage and exploitation of resources such as labor, finance, raw materials in the region for production and business activities. Small and medium enterprises are also the core of Vietnam's supporting industry. These enterprises form a synchronized supply chain that helps promote the growth of the manufacturing sector, more specifically, enhance the competitiveness of manufacturing enterprises, especially assembling enterprises. Supporting industry development is considered as a breakthrough stage for fast and sustainable development of Vietnam's key industries in the process of industrialization and modernization of the country. 126
8. HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 3. Conclusion By assessing the development process and analyzing the contribution of Vietnamese Small and medium enterprises, it is possible to see the role of Small and medium enterprises becoming increasingly important and the development potential of this region is very large. Small and medium enterprises are the driving force for economic development, job creation, domestic capital mobilization, exploitation and promotion of local local resources Therefore, encouraging and supporting the development of small and medium enterprises is a necessary direction to successfully implement the socio-economic development strategy, ensuring the sustainable development of Vietnam's economy. REFERENCES 1. Investment Review (2018), Small and medium enterprises are the mainstay of the economy [Online] , address: xuat-tru-cot-cua-nen-kinh-te-d86812.html [Date access 25/7/2019] . 2. Ministry of Planning and Investment (2017), White paper for small and medium enterprises in Vietnam. 3. Government (2018), Decree No. 39/2018/NĐ - CP dated 11/3/2018. 4. CIEM, DOE, ILSSA, UNU-WIDER (2016), Characteristics of business environment in Vietnam - Small and medium enterprises survey results 2015. 127