vietnamvietnam s’s competitiveness competitiveness 2008. 12. 1. · • vietnam has experienced an...
TRANSCRIPT
Vietnam’s CompetitivenessVietnam s Competitiveness
Professor Michael E. PorterHarvard Business School
Ho Chi Minh, VietnamDecember 1, 2008
This presentation draws on ideas from Professor Porter’s books and articles, in particular, Competitive Strategy (The Free Press, 1980); Competitive
1 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
p , p , p gy ( , ); pAdvantage (The Free Press, 1985); “What is Strategy?” (Harvard Business Review, Nov/Dec 1996); “Strategy and the Internet” (Harvard BusinessReview, March 2001); and a forthcoming book. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form orby any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Michael E. Porter. Additional information maybe found at the website of the Institute for Strategy and Competitiveness, www.isc.hbs.edu. Version: November 18, 2008, 3pm
The Need For An Economic Strategy
• Vietnam has experienced an impressive growth over the last two decades
• However, reforms so far are insufficient to move Vietnam to a middle income economy
• The next several years will determine whether Vietnam will follow the experience of Korea, or the Philippines
Vi t ’ f h b i l d ti• Vietnam’s reform have been piecemeal and reactive
• Improving Vietnam’s standard of living will require a long term economic strategyeconomic strategy
– A set of interrelated policy changes, institutional structures, andrigorous implementation mechanisms
2 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Agenda
• Understanding Vietnam’s Economic Performance
• Assessing Vietnamese Competitiveness
Id tif i A ti P i iti• Identifying Action Priorities
• Organizing for Competitiveness• Organizing for Competitiveness
• Creating an Economic StrategyCreating an Economic Strategy
3 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Prosperity PerformanceSelected Countries
PPP-adjusted GDP
$40,000
$45,000per Capita, 2007
IrelandUSA
Singapore Hong Kong
$30,000
$35,000Taiwan
Switzerland
Germany Finland
Iceland
SwedenUK
NetherlandsAustria
France
Singapore
Bahrain
Canada
Ital
Australia
Japan
g g
$20 000
$25,000
$ ,Greece
Portugal
Czech Republic
Spain
Saudi Arabia
Slovenia
Italy
KoreaNew Zealand Israel
Estonia
$10 000
$15,000
$20,000Hungary Slovakia
Russia
Chile
Croatia
Mexico ArgentinaMalaysia
Poland
Romania
Lithuania Latvia
Estonia
Costa Rica
$0
$5,000
$10,000
ChinaPakistan
TurkeyThailand
Philippines
Brazil
IndiaIndonesia
South Africa
Colombia Vietnam
Costa Rica
Egypt
Nigeria Bangladesh
Sri Lanka
Cambodia
4 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
$00% 2% 4% 6% 8% 10% 12%
Growth of Real GDP per Capita (PPP-adjusted), CAGR, 2003-2007Source: EIU (2008), authors calculations
Labor Force UtilizationParticipation Rates, Selected Countries
Labor Force
60%
65%Participation Rate, 2007
Singapore (6.16%)China
55%
60%
Sweden
Norway
JAustraliaCanada
Iceland
PortugalRussia
Hong KongThailand Vietnam
50%
F
UKFinland
Germany LatviaSweden
Lithuania
Ireland
South Korea
Czech Rep.
Slovenia
USANew Zealand
Japan
Slovakia SpainBrazil
Indonesia
Russia
India
Taiwan
40%
45% France
Italy
Poland
Colombia Mexico
Slovenia
AustriaHungary
RomaniaBangladesh
ArgentinaPhilippines
India
Sri LankaMalaysia
Chile
35%Morocco
TurkeyBulgaria
Nicaragua
5 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.pptSource: Economist Intelligence Unit (2008)
30%-3% -2% -1% 0% 1% 2% 3% 4% 5% 6%
Change in Labor Force Participation Rate, 2003-2007
Pakistan
Comparative Labor ProductivitySelected CountriesGDP per employee
(PPP adjusted US$), 2007
Ireland Hong Kong
USA
FranceUK Finland
Germany
Italy
SwedenNorway
Ireland
EstoniaAustria Japan
AustraliaCanada Singapore
TaiwanDenmark
IcelandIsraelGermany
Lith i
South Korea
Latvia
Slovenia
Switzerland
New Zealand
MalaysiaSlovakia
Spain
Saudi ArabiaChile
Portugal
Israel
Greece
Venezuela
Argentina Poland LithuaniaCzech Republic
MexicoHungary
BelarusTurkeyMalaysia
China
Russia
South AfricaThailandIran
Croatia
Sri LankaSyria
Ecuador EgyptPeruTunisia
Costa Rica Bulgaria
KazakhstanColombia
China
IndiaPhilippinesIndonesiaBrazil
South AfricaUkraineYemen
Cote d’Ivoire
Dominican Republic
Ecuador
SenegalKenya Ghana Bangladesh Cambodia
Ethiopia
NigeriaPakistan
Egypt
Vietnam
6 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Compound annual growth rate (CAGR) of real GDP per employee (PPP-adjusted), 2003-2007
Source: authors calculation Groningen Growth and Development Centre (2008)
Decomposition of Vietnamese GrowthContribution to
Annual GDP growth (%)
10%
8%
10%Capital Labor TFP
6%
4%
2%
0%
7 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Source: Ohno (2008)
-2%1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Domestic Fixed Investment RatesSelected CountriesGross Fixed Investment
as % of GDP (2007)
32%
34%
36%LatviaChina (40.4%)
Estonia
IndiaVietnam
28%
30%
32%Spain
Australia Slovakia
Slovenia
Estonia
Korea Iceland
R i
Sri LankaKazakhstan
Croatia
24%
26%
Czech Republic
Australia
Colombia
ArgentinaDenmark
Lithuania
IndonesiaIreland Singapore
Thailand
JapanNew Zealand
Tunisia
Greece
Romania
Ukraine
Venezuela
18%
20%
22%Turkey
Norway
PakistanAustria
Brazil
MalaysiaFrance
Germany
Netherlands
Poland
Sweden
Hungary
UK
South AfricaRussi
a
Italy
New Zealand CanadaMexico
Kenya
Egypt
Finland
Portugal
Hong Kong Chile
Cambodia
Saudi Arabia
14%
16%
18% BrazilGermany
USA
UK
Philippines
Dominican Republic
8 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
-4% -2% 0% 2% 4% 6% 8% 10% 12%
Note: Includes inbound FDI Source: EIU, 2008
Change in Gross Fixed Investment (as % of GDP), 2003 - 2007
Inbound Foreign Investment PerformanceStocks and Flows, Selected Countries
Inward FDI Stocks as % of GDP Average 2003 - 2007
70%
80%
GDP, Average 2003 2007
Netherlands EstoniaSingapore
(160.1%, 64.7%)
60%Hungary
SlovakiaCzech Republic
Chile
New Zealand SwedenSwitzerland
Vietnam
40%
50%
UK
Czech Republic
Australi
Denmark
ThailandCanad Latvia
Spain
Portugal Cambodia
Philippines
20%
30%
Russia
Turkey
Slovenia
a PolandColombia
dSouth Africa Iceland (46.7%)Canad
aLithuania
Brazil
France
Austria
Latvia
Norway
Germany
MexicoFinland
LaosIsrael
0%
10%
Japan
Saudi Arabia
TurkeyUSA Malaysia
Indonesia China
India
Pakistan
South KoreaItaly
yGreece
9 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
0%-5% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: UNCTAD, World Investment Report (2007)
FDI Inflows as % of Gross Fixed Capital Formation, Average 2003 - 2007
100%
Export PerformanceSelected CountriesExports as Share of
GDP (in %, 2007)
80%
90%
Thailand Estonia
HungaryIreland Czech Republic
Slovakia
Malaysia (116.4%)
Belgium
60%
70%
Thailand Estonia
LithuaniaS di A biAustria
CambodiaSloveniaNetherlands
Bulgaria
SloveniaVietnam
40%
50%
Russia
LithuaniaSaudi Arabia
LatviaChina
TunisiaGermany
SwitzerlandPhilippines
CanadaSouth Africa
Norway Chile
Indonesia
South KoreaFinlandUkraine
Croatia
Egypt
Kazakhstan
Poland
20%
30%
Russia
ItalyUK
CanadaFrance
IndiaSpainBrazil
VenezuelaNew Zealand
Indonesia
AustraliaTurkey
Mexico
Pakistan
Argentina
Sri Lanka
Japan
Portugal
BangladeshColombia
Dominican Republic
0%
10%
-15% -10% -5% 0% 5% 10% 15% 20% 25% 30%Ch f E t Sh f GDP 2003 t 2007
USABrazil
10 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Change of Exports as Share of GDP, 2003 to 2007
Source: EIU (2008), authors’ analysis• Imports as a share of GDP are equally high
Vietnam’s Exports By Type of IndustryWorld Export Market Share (current USD)
0 7%
0.8%Processed GoodsSemi-processed GoodsUnprocessed GoodsServices
( )
0.6%
0.7% ServicesTOTAL
0.4%
0.5%
0 2%
0.3%
0.1%
0.2%
11 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
0.0%1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: UNComTrade, WTO (2008)
5%
Vietnam’s Cluster Export Portfolio2000-2006
Change In Vietnam’s Overall Footwear (5.68%, 1.91%)
4%
06
Growth In World Export Share: 0.25%
( , )
Fishing and Fishing Products
3%arke
t sha
re, 2
00
2%wor
ld e
xpor
t ma
Appare
1%
2%
Viet
nam
’s w
T til
Apparel
Coal & Briquettes
Furniture1%
Vietnam’s Average World Export Share: 0.31%
Plastics
Textiles
Tobacco
e
12 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
0%-0.3% -0.1% 0.1% 0.3% 0.5% 0.7% 0.9% 1.1% 1.3% 1.5%
Change in Vietnam’s world export market share, 2000 – 2006Source: 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 theIMF BOP statistics.
Exports of US$1.1 Billion =
0%
Agenda
• Understanding Vietnam’s Economic Performance
• Assessing Vietnamese Competitiveness
Id tif i A ti P i iti• Identifying Action Priorities
• Organizing for Competitiveness• Organizing for Competitiveness
• Creating an Economic StrategyCreating an Economic Strategy
13 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
What is Competitiveness?
• Competitiveness depends on the productivity with which a nation uses its human, capital, and natural resources.
P d ti it t th t i bl t d d f li i ( t– Productivity sets the sustainable standard of living (wages, returns on capital, returns on natural resources)
– It is not what industries a nation competes in that matters for prosperity, but how productively it competes in those industrieshow productively it competes in those industries
– Productivity in a national economy arises from a combination of domestic and foreign firms
Th d ti it f “l l” d ti i d t i i f d t l t– The productivity of “local” or domestic industries is fundamental to competitiveness, not just that of export industries
• Nations compete to offer the most productive environment for business
• The public and private sectors play different but interrelated roles in
14 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
p p p ycreating a productive economy
Microeconomic Competitiveness
Determinants of Competitiveness
p
Sophisticationof Company
Operations andStrategy
Quality of the NationalBusiness
Environment
State of Cluster Development
Macroeconomic Competitiveness
StrategyEnvironment
MacroeconomicPolicies
SocialInfrastructure and PoliticalInstitutions
Natural Endowments
• Macroeconomic competitiveness creates the potential for high productivity, but is not sufficient
15 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Productivity ultimately depends on improving the microeconomic capability of the economy and the sophistication of local competition
Wage Level ComparisonSelected CountriesMonthly Minimum Wage
USD, log scale, 2008
N Z l dItaly
Austria
Sweden
Netherlands
DenmarkIrelandUnited Kingdom
Japan / Belgium / FranceGermany
$3,000
New ZealandAustralia
Taiwan
SingaporeKorea
GreeceSlovenia
Portugal
Czech Republic
Spain
Cyprus
Hungary Poland Slovakia
$1,000
$500
Malaysia
Th il d
p
EstoniaLithuania
Hungary Slovakia
LatviaRomania
$500
$100
Cambodia
Philippines Indonesia
ThailandChinaBulgaria$100
$50
Vietnam
$0
Vietnam
16 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Source: Global Competitiveness Report, 2008; EuroStat, 2008; Philippines Department of Labor and Employment, 2008
Global Competitiveness Index Score, 2008
$0
Rate of Competitiveness ImprovementLow Income Countries, 2002 - 2007
BCI Value, 2007
High
Indonesia
Sri Lanka
India
UgandaTanzania Honduras
Sri Lanka
Mali
PakistanEl Salvador
M d
Nigeria Gambia
Vietnam
Zambia ZimbabweUganda
Bolivia
NicaraguaBangladesh
Paraguay
Chad
Mozambique
MadagascarEthiopia
Low
17 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Dynamism Score, 2002 - 2007
Below average Above averageAverage
Source: Global Competitiveness Report 2007
Macroeconomic Competitiveness
Social Infrastructure and Political Institutions
Macroeconomic Policies
• Basic human capacity– Basic education– Health system
• Fiscal policy– Government surplus/deficit– Government debt– Savings / Investment rates
• Political institutions– Political freedom– Voice and accountability
Political stability
• Monetary policy– Inflation– Interest rate spread
– Political stability– Centralization of economic policymaking– Government effectiveness
• Rule of law– Judicial independence– Efficiency of legal framework– Civil rights– Business costs of corruption– Reliability of police
18 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Reliability of police– Prevalence and costs of crime
Macroeconomic CompetitivenessVietnam’s Position
Social Infrastructure and Political Institutions
Macroeconomic Policies
Basic health and education+ Solid provision of basic services– Increasing concerns about the quality of these
public services
Fiscal policy+ Government budget and debt at acceptable
levels– Government budget still reliant on foreign aid
Monetary Policy– High levels of inflation
Political institutions+ High levels of political stability+ Increasing decentralization of economic
policy responsibilities– Little effective policy dialogue– Corruption remains a significant challengeCorruption remains a significant challenge
Rule of law+ Quality of laws tends to be good – Effectiveness of implementation remains
19 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
pweak
Governance IndicatorsSelected Countries
Best country in
Voice and AccountabilityPolitical StabilityGovernment EffectivenessRegulatory QualityRule of LawControl of Corruption
country in the world
Index of Governance
Q litQuality,2007
Worstcountry in the world
Singap
oreJa
pan
uth Kore
aTaiw
anMala
ysia
Brazil
India
Thaila
ndSri L
anka
hilipp
ines
Indon
esia
China
Vietna
mRus
siaCam
bodia
angla
desh
Laos
Pakist
an
the world
20 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Sin
Sout M T S Phi In V
Ca
Bang P
Note: Sorted left to right by decreasing average value across all indicators. The ‘zero’ horizontal line corresponds to the median country’s average value across all indicators.
Source: World Bank (2008)
Corruption Perception Index, 20071 Finland New Zealand1
ImprovingDeterioratingLow
corruption
Finland
Canada
Ireland
Iceland Switzerland
France
Austria GermanyJapan
NorwayUKHong Kong
CUnited States
New ZealandSweden
Rank in
PortugalCzech Republic
SlovakiaSouth Korea
Latvia
SloveniaEstonia
MalaysiaLithuania
HungaryTaiwan
SpainChile
South AfricaItaly
Israel
Uruguay
JordanGlobal
CorruptionIndex,2007 India
Thailand
Romania
Turkey
ChinaColombia
Mexico
CroatiaPoland
Brazil
Tunisia
Peru
T i
Senegal
GreeceJordan
P
High Indonesia
EgyptThailand
Argentina
Russia
Tanzania
Uganda
Philippines
Cote d’IvoirePakistan
Ukraine
Panama
Vietnam
-20 -15 -10 -5 0 5 10 15 20Change in Rank Global Corruption Report 2007 versus 2001
91
Highcorruption
Bangladesh
Indonesia
Venezuela
RussiaZimbabwe Cote d Ivoire Nigeria
21 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
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
Microeconomic Competitiveness: Quality of the Business Environment
Context for Firm
Strategy and Rivalry
Local rules and incentives that
Factor(Input) Demand
Conditions
Local rules and incentives that encourage investment and productivity
– e.g. incentives for capital investments, intellectual property protection
Access to high quality business inputs
– Human resources
Conditions Conditions
Sophistication of local customers and needs
e g strict quality safety
protectionVigorous local competition
– Openness to foreign and local competition
Human resources– Capital availability– Physical infrastructure– Administrative infrastructure
(e.g. registration, permitting)
Related and Supporting Industries
–e.g., strict quality, safety, and environmental standards
– Information and transparency– Scientific and technological
infrastructure
Availability of suppliers and supporting industries
22 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Many things matter for competitiveness• Successful economic development is a process of successive upgrading, in which the business
environment improves to enable increasingly sophisticated ways of competing
Vietnamese Business EnvironmentVietnam’s Relative Position 2008
• Communications infrastructure (rank 72)
– E.g., quality of the telephone
• Government intervention (rank 119) – E.g., SOE market dominance
Competitive Disadvantages Competitive Advantages
E.g., quality of the telephone infrastructure
• Local competition (rank 75)– E.g., intensity of local
competition
• Trade barriers (rank 113)– E.g., level of import tariffs
competition
23 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Note: Rank versus 130 countries; overall, Vietnam ranks 102nd in 2008 PPP adjusted GDP per capita and 76th in New Global CompetitivenessSource: Institute for Strategy and Competitiveness, Harvard University (2008)
160
Openness to TradeSelected Countries, 2008Rank (157
countries)
120
140Vietnam
100
120
60
80
20
40
0
Hon
g K
ong
Sin
gapo
re
nite
d S
tate
s
Taiw
an
Ger
man
y
New
Zea
land
Japa
n
Phi
lippi
nes
Mal
aysi
a
Thai
land
Indo
nesi
a
Braz
il
Chi
na
Sri
Lank
a
Sou
th K
orea
Pak
ista
n
Vie
tnam
Laos
Cam
bodi
a
Indi
a
Rus
sia
24 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Un N S
Source: Index of Economic Freedom (2008), Heritage Foundation
• Vietnam’s lack of openness will retard further competitiveness upgrading
Vietnamese Business EnvironmentVietnam’s Relative Position 2008
• Communications infrastructure (rank 72)
– E.g., quality of the telephone
• Government intervention (rank 119) – E.g., SOE market dominance
Competitive Disadvantages Competitive Advantages
E.g., quality of the telephone infrastructure
• Local competition (rank 75)– E.g., intensity of local
competition
• Trade barriers (rank 113)– E.g., level of import tariffs
competition• Energy infrastructure (rank 109)
– E.g., quality of electricity supply
• Access to finance (rank 109)Access to finance (rank 109)– E.g., financial market sophistication
• Innovation infrastructure (rank 99)– E.g., patents per capitag , pa e s pe cap a
• Logistical infrastructure (rank 96)– E.g., quality of roads
25 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Note: Rank versus 130 countries; overall, Vietnam ranks 102nd in 2008 PPP adjusted GDP per capita and 76th in New Global CompetitivenessSource: Institute for Strategy and Competitiveness, Harvard University (2008)
Cost of Doing BusinessVietnam, 2008Ranking, 2008
(of 181 countries) Favorable Unfavorable
Median Ranking, East Asia and Pacific
Vietnam’s per capita GDP rank: 70th
26 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Source: World Bank Report, Doing Business (2008)
• Especially in land ownership in rural areas significant problems remain
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 isGovernment oversight of these companies and their spending is limited and largely reactive
• The costs of slow progress on privatization are high for Vietnam’s competitivenesscompetitiveness
– Retards entry of new private companies– Creates risks of corruption
Can exacerbate economic volatility through excessive investment– Can exacerbate economic volatility through excessive investment financed through soft credit
• An effective privatization program strategy for Vietnam must shifti t t t j t h hieconomic structure, not just change ownership
– Privatization must go hand-in-hand with market opening and policies to curtail anti-competitive practicesOwners are needed that contribute new capital and skills
27 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
– Owners are needed that contribute new capital and skills – Minority stakes can distribute ownership more widely
P bli R l i & L l t il
State of Cluster DevelopmentTourism Cluster in Cairns, Australia
Travel agents Tour operatorsPublic Relations & Market Research
Services
Local retail, health care, andother services
Attractions andActivities
e g theme parksRestaurants
FoodSuppliers
Local Transportation
e.g., theme parks, casinos, sports
PropertyServices
Souvenirs, Duty Free
Hotels Airlines, Cruise ShipsMaintenance
Services
Banks,Foreign
Exchange
Government agenciesA t li T i C i i
Educational InstitutionsJ C k U i it
Industry GroupsQ l d T i
28 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Sources: HBS student team research (2003) - Peter Tynan, Chai McConnell, Alexandra West, Jean Hayden
e.g. Australian Tourism Commission, Great Barrier Reef Authority
e.g. James Cook University,Cairns College of TAFE
e.g. Queensland Tourism Industry Council
5%
Vietnam’s Cluster Export Portfolio2000-2006
Change In Vietnam’s Overall Footwear (5.68%, 1.91%)
4%
06
Growth In World Export Share: 0.25%
( , )
Fishing and Fishing Products
3%arke
t sha
re, 2
00
2%wor
ld e
xpor
t ma
Appare
1%
2%
Viet
nam
’s w
T til
Apparel
Coal & Briquettes
Furniture1%
Vietnam’s Average World Export Share: 0.31%
Plastics
Textiles
Tobacco
e
29 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
0%-0.3% -0.1% 0.1% 0.3% 0.5% 0.7% 0.9% 1.1% 1.3% 1.5%
Change in Vietnam’s world export market share, 2000 – 2006Source: 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 theIMF BOP statistics.
Exports of US$1.1 Billion =
0%
1.0%
Vietnam’s Cluster Export Portfolio cont’d2000-2006
Change In Vietnam’s Overall
0.8%
06 Agricultural Products
gGrowth in World Export Share:
0.25%
0.6%arke
t sha
re, 2
00
Leather and Related Products
Oil & Gas
Agricultural Products
0 4%wor
ld e
xpor
t ma
Textiles
Building Fixtures and Equipment
0 2%
0.4%
Viet
nam
’s w
Communications Equipment
Processed FoodsTotal
Services
Construction Materials
Lighting and Electrical EquipmentPublishing and Printing
Sporting, Recreational and Children's Goods Vietnam’s Average
World Export Share: 0.31%
0.2%
AutomotiveProduction Technology
Motor Driven Products
Information Technology Prefabricated Enclosures and Structures
Analytical InstrumentsJewelry, Precious Metals and
CollectiblesBiopharmaceuticals
Chemical ProductsForest Products
Power and Power Generation EquipmentMedical Devices
g g
Metal Mining and ManufacturingEntertainment
30 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
0.0%-0.10% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30%
Change in Vietnam’s world export market share, 2000 – 2006Source: 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 theIMF BOP statistics.
AutomotiveBiopharmaceuticals
Exports of US$1.1 Billion =
Share of World Exports by ClusterVietnam, 2000< 0.07%
0.07 – 0.15%
Not reported
Fishing &
Fishing
ProductsHospitality
& TourismAgricultural Products
Transportation
Entertainment Prefabricated Enclosures
Textiles0.16 – 0.31%
0.31 – 0.62%
0.62- 1.24%FurnitureBuilding
Fixtures,
Equipment &
Services
Transportation & Logistics
Aerospace Vehicles &
DefenseLightning &
Information
Tech.
DistributionServices
Heavy
ConstructionMaterials
Jewelry &Processed
> 1.24%
Power Generation
Electrical
Equipment
Financial Services
Communi-
cations
Business Services
Forest
Products
yConstruction
Services
Jewelry &
Precious
Metals
Food
Medical
Devices
Analytical InstrumentsEducation &
Knowledge
Creation
Chemical
Products
Biopharma-
ceuticals
Services Publishing & Printing
cations
Equipment
ApparelTobacco
Heavy Machinery
Production Technology
Motor Driven Products
Plastics
Oil &
Gas
ProductsLeather &
Related
Products
Tobacco
Aerospace Engines
AutomotiveMetal
Manufacturing
31 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Footwear
Note: Clusters with overlapping borders have at least 20% overlap (by number of industries) in both directions.
Marine
EquipmentSporting
& Recreation Goods
Share of World Exports by ClusterVietnam, 2006< 0.07%
0.07 – 0.15%
Not reported
Fishing &
Fishing
ProductsHospitality
& TourismAgricultural Products
Transportation
Entertainment Prefabricated Enclosures
Textiles0.16 – 0.31%
0.31 – 0.62%
0.62- 1.24%FurnitureBuilding
Fixtures,
Equipment &
Services
Transportation & Logistics
Aerospace Vehicles &
DefenseLightning &
Information
Tech.
DistributionServices
Heavy
ConstructionMaterials
Jewelry &Processed
> 1.24%
Power Generation
Electrical
Equipment
Financial Services
Communi-
cations
Business Services
Forest
Products
yConstruction
Services
Jewelry &
Precious
Metals
Food
Medical
Devices
Analytical InstrumentsEducation &
Knowledge
Creation
Chemical
Products
Biopharma-
ceuticals
Services Publishing & Printing
cations
Equipment
ApparelTobacco
Heavy Machinery
Production Technology
Motor Driven Products
Plastics
Oil &
Gas
ProductsLeather &
Related
Products
Tobacco
Aerospace Engines
AutomotiveMetal
Manufacturing
32 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Footwear
Note: Clusters with overlapping borders have at least 20% overlap (by number of industries) in both directions.
Marine
EquipmentSporting
& Recreation Goods
Geographic Levels and Competitiveness
World Economy WTO
Broad Economic Areas
G f
Asia
• The business environment at a given location is the cumulative outcome ofGroups of
Neighboring NationsSoutheast Asia
location is the cumulative outcome of policy at all geographic levels
• Many competitiveness drivers occur at the regional and local level
Nations Vietnam • The allocation of competitiveness responsibilities across geographic levels is a crucial policy challenge
States, Provinces Vietnamese provinces
33 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Metropolitan and Rural Areas Ho Chi Minh City
Specialization of Regional EconomiesSelected U.S. Geographic Areas
ChicagoDenver CO
BostonAnalytical InstrumentsEducation and Knowledge CreationCommunications Equipment
ChicagoCommunications EquipmentProcessed FoodHeavy Machinery
Denver, COLeather and Sporting GoodsOil and GasAerospace Vehicles and DefenseSeattle-Bellevue-
Everett, WAAerospace Vehicles and Defense
Pittsburgh, PAConstruction Materials
Wichita, KSAerospace Vehicles and
Fishing and Fishing ProductsAnalytical Instruments
Construction MaterialsMetal ManufacturingEducation and Knowledge
Creation
Aerospace Vehicles and Defense
Heavy MachineryOil and Gas
San Francisco-Oakland-San Jose Bay AreaCommunications EquipmentAgricultural R l i h D h NC
Los Angeles Area
Agricultural ProductsInformation Technology
Raleigh-Durham, NCCommunications EquipmentInformation TechnologyEducation andKnowledge Creation
Los Angeles AreaApparelBuilding Fixtures,
Equipment and Services
Entertainment
San DiegoLeather and Sporting GoodsPower GenerationEducation and Knowledge Creation
HoustonOil and Gas Products and ServicesChemical Products
Atlanta, GAConstruction MaterialsTransportation and LogisticsBusiness Services
34 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Heavy Construction Services
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.
Vietnam Provincial Competitiveness Index, 2006
ExcellentHigh PerformingMid-highAverageAverageMid-lowLow Performing
35 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.pptSource: Vietnam Provincial Competitiveness Index 2006 (USAID)
The NeighborhoodSoutheast Asia
36 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Vietnam has a central position between ASEAN and China
Economic Coordination Among NeighborsEnhancing Productivity
Factor Factor (Input)(Input)
ConditionsConditions
Regional Strategy & Governance
Context for Context for Strategy Strategy
and Rivalryand Rivalry
Related and Supporting Industries
Demand Demand ConditionsConditions
Macroeconomic Competitiveness
• Eliminating trade and investment barriers within the region
• Harmonizing environmental standards
• Harmonizing
• Improving regional transportationinfrastructure
• Creating an efficient
• Facilitating cross-border cluster upgrading, e.g.
– Tourism
• Creating a regional marketing program
• Sharing best
• Coordinating programs to improve publicsafety
the region
• Simplifying and harmonizing cross-borderregulations and
k
gproduct safetystandards
• Establishing reciprocal consumer
genergy network
• Enhancing regional communicationsand connectivity
Li ki fi i l
– Agribusiness
– Transport & Logistics
– Business
gpractices in government operations
• Creating regional institutions
• Coordinating macro-economicpolicies
paperwork
• Coordinatinganti-monopoly andfair
protection laws
• Opening governmentprocurementwithin the region
• Linking financialmarkets
• Opening the movement of students for higher
services – Dispute resolution mechanisms
– Regional development bankcompetition
policies
within the regioneducation
• Harmonizing administrative requirements for businesses
bank
• Developing a regional negotiating position with i t ti l
37 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
international organizations
Agenda
• Understanding Vietnam’s Economic Performance
• Assessing Vietnamese Competitiveness
Id tif i A ti P i iti• Identifying Action Priorities
• Organizing for Competitiveness• Organizing for Competitiveness
• Creating an Economic StrategyCreating an Economic Strategy
38 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Stages of National Competitive DevelopmentShifting Policy Imperatives
FactorFactor--DrivenDriven InvestmentInvestment-- InnovationInnovation--FactorFactor--Driven Driven EconomyEconomy
InvestmentInvestment--Driven EconomyDriven Economy
InnovationInnovation--Driven EconomyDriven Economy
Low Cost Inputs Productivity Unique Value
• Macro, political, and legal stability
• Increasing local competition• Market openness
• Advanced skills• Scientific and technological
• Efficient basic infrastructure
• Lowering regulatory costs of doing business
p• Advanced infrastructure• Incentives and rules
encouraging productivityCl t f ti d
ginstitutions
• Incentives and rulesencouraging innovation
• Cluster upgradingof doing business • Cluster formation and activation
• Cluster upgrading
39 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Source: Porter, Michael E., The Competitive Advantage of Nations, Macmillan Press, 1990
Competitiveness Action Agenda: Key Priorities
Fundamental ReformContinue Existing Efforts
• Reduce corruption • Human resource development at all levels
• Improve infrastructure
• Deepen financial market
• Reform of SOEs
• Cluster developmentpreforms
• Impose regulatory
p
attractiveness
40 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Reducing Corruption
• The government has repeatedly committed itself towards reducing corruption; and some action has been taken
• Evidence reveals little progressp g
• Vietnam needs to target corruption as a crucial barrier for growth and• Vietnam needs to target corruption as a crucial barrier for growth and design an integrated strategy to tackle its occurrence
A ti i itiAction priorities• Reduce the potential for corruption through simplified regulations, use
of modern information technology, and improved SOE governance/ i ti tiprivatization
• Set clear guidelines and reporting requirements for management of SOEs
41 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Demonstrate a commitment for transparency, including support for a strong press
Improving Infrastructure
• Significant infrastructure investments have been made in recent years
• Evidence on their impact is mixed as best. There is significant p gduplication of efforts and companies complain about serious bottlenecks
• Vietnam needs to better target infrastructure investments to meet the needs of its growing economy
Action priorities• Establish a national fund for key infrastructure projects to be
implemented under the supervision of the Prime Minister’s officeimplemented under the supervision of the Prime Minister s office• Utilize matching funds incentives to improve effectiveness if
investments by provincial governments C t bli i t il t d i di i iti
42 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Create a public-private council to advise on spending priorities
Deepening Financial Markets
• Vietnam has made clear progress on opening up financial markets, more recently also to foreign companies as part of the WTO agreement
• But the weakness of Vietnam’s financial markets even before the global crisis, and the financing constraints faced by private companies, indicate that serious challenges remain
• Vietnam needs to develop a modern regulatory and institutional structure to enable an effective financial systemy
Action priorities• Continue opening financial markets in line with WTO commitments• Continue opening financial markets in line with WTO commitments• Create an effective, independent financial regulator, using outside
help as neededE t bli h d l t b k t d l fi i t l f i t
43 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Establish a development bank to develop financing tools for private SMEs
Regulatory Reform
• Regulatory reform has been on the Vietnamese policy agenda for some time, especially over the last five years
• Despite some progress, the overall regulatory burden on businessesDespite some progress, the overall regulatory burden on businesses and citizens remains high with no clear societal benefits
• Vietnam needs a fundamentally new approach to regulatory reform and assessment of new regulations
Action priorities• Aggressively pursue the work on regulatory reform initiated with
f i dforeign donors• Improve institutional capacity to evaluate and administer regulations,
not just the rules themselves
44 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Include an obligatory assessment of the administrative burden on business in the process of introducing new laws and regulations
Human Resource Development
Basic education
• Enrolment rates have increased significantly but quality is low and skills fail to meet company needs
• Vietnam needs to dramatically improve educational quality, through setting standards improving curricula and involving the privateeducation setting standards, improving curricula, and involving the private sector in governance
Vocational training
• Vietnam lacks a skills training system• Companies have launched own training efforts to address skill
bottlenecks• Vietnam needs a clear program for cluster-based workforce
development
• The number of universities has increased but quality is low and skills
Higher education
The number of universities has increased but quality is low and skills do not match company needs
• Higher university education standards must be set and enforced, drawing on international experts
• Vietnam needs to develop a plan and enabling institutions for i il ti f l b l t h l
45 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
assimilation of global technology
Restructuring of State Owned Enterprises
• The government has an explicit policy to promote private enterprise but there isThe government has an explicit policy to promote private enterprise but there is deep-seated ambivalence towards privatization
• Without a thorough reform of the SOE sector, there is little hope for Vietnam to reach the next level of economic development
SOE governance
• Create independent boards of directors• Implement transparent financial reporting• Define clear financial objectives
– Set corporate charters
Competition in markets with
– Set corporate charters
• Remove existing trade, investment, and artificial entry barriers protecting SOEsmarkets with
SOEs• Establish strong, independent regulatory bodies• Support start-ups and spin-offs from SOEs
Privatization• Create clear legal conditions for privatization• Define explicit objectives for privatization process• Create a dedicated structure for implementing privatization
46 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• The creation of SOE groups is not a solution and can exacerbate problems if no other reforms are being implemented
Cluster Development in Vietnam
Vietnam’s cl sters c rrentl tend to be narro l foc sed on• Vietnam’s clusters currently tend to be narrowly focused on individual products
• There is limited collaboration among companies, suppliers and otherinstitutions
– Some clusters, like coffee, have the potential to significantly increase their f if th d t ll b ti hperformance if they adopt a collaboration approach
• Cluster-based development thinking is crucial in improving the delivery f th i li iof other economic policies– Workforce skill development around clusters– FDI attraction/industrial zones around clusters– Cluster-based regional development initiatives– Quality and technology transfer organization for each cluster
47 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Policy should upgrade all existing and emerging clusters, not choose among them
Clusters and Economic PolicyScience and Technology
I t tEducation and Investments (e.g., centers, university
departments, technology transfer)
Education and Workforce Training
Management Training
ClustersFDI/Business Attraction
Standard setting and quality initiatives
ClustersExport Promotion Market Information
and Disclosure
Ph i l Natural Resource
Environmental StewardshipIndustrial parks and
free trade zonesPhysical
InfrastructureNatural Resource
Protection
48 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Clusters provide a framework for implementing public policy and organizing public-private collaboration to enhance competitiveness
Clusters and Economic Diversification
Develop Related Clusters
Turn Niche Products Into ClustersDeepen Existing Clusters Build Clusters Around
MNCs
Upgrade Existing Export Products and Services
49 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Upgrading Vietnamese Niche Positions, 2006Cluster Cluster World
Export Share Subcluster Industry
Industry Share of
World
Change in Share (1997-
2006)
Export Value (in $thousands) p
Exports 2006) $ )
Rubber Natural rubber, balata and similar natural gums 7.82% 3.40% 1,137,205$ Plastic Waste Reclaimed unhardened rubber; waste 1.88% 1.87% 6,084$ Plastic Products Plastic sacks, bags 1.55% 0.65% 150,234$ Rubber Synthetic rubber 1.13% 1.13% 143,316$
Motorcycles and Bicycles Parts of other motorcycles 1.42% 1.22% 60,962$
Plastics
Sporting,
0.490%
y y y ,$
Motorcycles and Bicycles Bicycles and other cycles, non‐motorized 1.27% -1.56% 49,628$
Specialty Office Machines Parts for calculating, accounting machines 23.04% 23.04% 444,384$ Electrical and Electronic Components Insulted wire, cable and conductors 1.07% 0.72% 705,725$ Specialty Foods and Ingredients Starches, inulin and gluten 7.93% 6.23% 148,445$ Food Products Machinery Distilling, rectifying plant 2.64% 2.64% 19,449$
Recreational and Children's Goods
0.284%Communications
Equipment
0.361%
y g y g pSpecialty Foods and Ingredients Vegetable saps, extracts 0.90% 0.50% 9,193$ Dairy and Related Products Milk, concentrated or sweetened 0.84% -0.22% 89,315$ Specialty Foods and Ingredients Yeasts 0.81% 0.27% 7,962$ Specialty Foods and Ingredients Homogenized food preparations 0.76% 0.59% 4,888$ Glass Drawn, float, cast glass, worked 6.39% 6.37% 78,185$ Electrical Parts Other inductors 3.20% 2.86% 137,477$
0.260%
0.256%
Processed Food
Lighting and Electrical Equipment
Electrical Parts Other electric transformers 1.17% 0.68% 63,386$ Motors and Generators Electric motors<=37.5w 1.88% 1.15% 150,425$ Appliances Sewing machines and parts 1.21% 0.26% 45,749$
Audio Equipment Loudspeakers, unmounted 1.41% 1.40% 39,964$
Audio Equipment Electric sound amplifiers 1.07% 1.07% 8,745$
Motor Driven Products
Entertainment and Reproduction Equipment
0.156%
0.125%
Electrical Equipment
Peripherals Input or output units 1.01% 1.01% 653,740$ Electronic Components and Assemblies Printed circuits 0.36% -0.43% 85,738$ Electronic Components TV picture tubes, CRTs 1.26% 1.23% 53,690$ Electronic Components Other electronic valves, tubes 0.35% -0.50% 12,186$ Process Instruments Gas meters 0.34% 0.34% 1,415$ Fabricated Plate Work Steam generating boilers, super‐heated water boilers; a 1.35% 1.35% 53,010$
P d i
Information Technology
0.121%
Analytical Instruments
0.047%
50 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
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.
Fabricated Plate Work Steam generating boilers, super heated water boilers; a 35% 35% 53,0 0$Process Equipment Components Articulated link chain and parts 0.45% 0.31% 7,292$ Machine Tools and Accessories Cutting blades for machines 0.42% 0.38% 7,501$
Production Technology
0.046%
Agenda
• Understanding Vietnam’s Economic Performance
• Assessing Vietnamese Competitiveness
Id tif i A ti P i iti• Identifying Action Priorities
• Organizing for Competitiveness• Organizing for Competitiveness
• Creating an Economic StrategyCreating an Economic Strategy
51 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
The Process of Economic DevelopmentShifting Roles and Responsibilitiesg p
Old Model New Model
• Government drives economic • Economic development is a development through policy
decisions and incentivescollaborative process involving
government at multiple levels, companies, teaching and research institutions andresearch institutions, and
institutions for collaboration
• Competitiveness must become a bottoms-up process in which many individuals, companies, and institutions take responsibility
52 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
• Every community and cluster can take steps to enhance competitiveness
Government and the Process of Economic Development
• Competitiveness is affected by a myriad of government entities– Multiple agencies and departments (e.g. finance, trade, education, science
and technology, commerce, regional policy, energy, agriculture)gy, , g p y, gy, g )– Multiple levels of government (nations, states, cities, etc.) – Intergovernmental relations with neighboring countries affect
competitiveness
• Competitiveness is rarely the sole agenda of any government agency
• Coordinating structures are needed that brings together the ministries and departments necessary to formulate and implement an economicand departments necessary to formulate and implement an economic strategy
• Explicit mechanisms are needed to engage the private sector in dialog
53 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
about policy priorities and implementation progress
Organizing for Competitiveness in VietnamRecommendations
• Create effective, independent regulatory organizations
• Improve economic policy at the provincial level
• Improve mechanisms for public-private discussion and collaboration• Improve mechanisms for public-private discussion and collaboration
• Enhance strategic planning and program management capacity in the central and provincial governmentsthe central and provincial governments
• Develop a national economic strategy process to guide priorities in i i th b i i timproving the business environment
54 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Regional Development in Vietnam
• Vietnam’s provinces are developing at different rates; prosperity levels between the richest and poorest regions differs greatly
• Political power and responsibility for economic development has been p p y pdecentralized to the provinces, who apply to the national government for funds
• Provinces have adopted unfocused growth strategies with much duplication and little specialization across provincesp p
• Provinces have insufficient technical capacity for policy design and implementation
• Each province should be charged with developing an economic plan based on ac p o ce s ou d be c a ged t de e op g a eco o c p a based oits unique strengths and potential
• Each province should be expected to publicly report on implementation
55 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Competitiveness Institutions
• Economic strategy unit in the Prime Minister’s office – Regularly updating on progress– Lead a formal planning and program management process involving all
agencies
• Public-private competitiveness council
• Vietnam Competitiveness InstituteVietnam Competitiveness Institute – To conduct analyses, benchmark vs. other countries, and train
government leaders– Joint national and provincialJoint national and provincial
• Enhanced role of business associations
56 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
Agenda
• Understanding Vietnam’s Economic Performance
• Assessing Vietnamese Competitiveness
Id tif i A ti P i iti• Identifying Action Priorities
• Organizing for Competitiveness• Organizing for Competitiveness
• Creating an Economic StrategyCreating an Economic Strategy
• Integrating Corporate Social Responsibility
57 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
g g p p y
Defining an Economic Strategy
National Value Proposition
• What is the unique competitive position of the nation or region given its location, legacy, and existing and potential strengths?
– What roles with neighbors, the region, and the broader world?– What unique value as a business location?q– For what types of activities and clusters?
Developing Unique Strengths Achieving and Maintaining Parity with Peers
• What elements of context and the • What weaknesses must be addressed to• What elements of context and thebusiness environment are crucial priorities?
• What existing and emerging clustersshould be developed first?
• What weaknesses must be addressed to achieve parity with peer countries?
58 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt
should be developed first?
• Priorities and sequencing are a necessity in economic development
The Need for an Economic Strategy
Th Vi t t f ll l l l ti d• The Vietnamese government follows largely an evolutionary and reactive approach in response to crises and specific problems
• Foreign aid inflows are fragmented and driven by donor-priorities
• This approach has been successful in achieving success in factor-based economic development, but will be insufficient to move to a new stage
• Government needs leads in a broad-based discussion on a new economic strategy that sets priorities for improvements in the business environment and institutions
– Internally, the government needs to increase its technical capacity to support such a strategic dialogue, for example through a strategy unit in the Prime Minister’s office
59 Copyright 2008 © Professor Michael E. Porter20081201 – Vietnam CAON.ppt