Light Manufacturing in Vietnam : Creating Jobs and Prosperity in a Middle-Income Economy

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dc.contributor.author
Dinh, Hinh T.
en_US
dc.contributor.other
Mishra, Deepak
en_US
dc.contributor.other
Binh, Le Duy
en_US
dc.contributor.other
Pham, Duc Minh
en_US
dc.contributor.other
Hang, Pham Thi Thu
en_US
dc.date.accessioned
2014-01-23T15:39:06Z
en_US
dc.date.available
2014-01-23T15:39:06Z
en_US
dc.date.issued
2014-01-23
en_US
dc.identifier.isbn
978-1-4648-0034-4
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dc.identifier.other
10.1596/978-1-4648-0034-4
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dc.identifier.uri
http://hdl.handle.net/10986/16598
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dc.description.abstract
Light Manufacturing in Vietnam makes the case that, if the country is to continue along a rapid economic growth path and create jobs, it must undertake a structural transformation that can lift workers from low-productivity agriculture and the mere assembly of imported inputs to higher-productivity activities. Vietnam needs to address fundamental issues in the manufacturing sector that, until now, have been masked by economic growth. The book shows that there is a dichotomy between domestic enterprises and enterprises supported by foreign direct investment. The dominant state-owned enterprises and foreign-invested firms are often not integrated with smaller, domestic firms through backward or forward links in the use of domestically produced inputs or intermediate products. Growth in the domestic light manufacturing sector has arisen from the sheer number of micro and small enterprises rather than from expansion in the number of medium and large firms. As a consequence, final products have little value added; technology and expertise are not shared; and the economy has failed to move up the structural transformation ladder. This structure of production is one of the reasons Vietnam's rapid process of industrialization over the last three decades has not been accompanied by a favorable trade balance. Policy measures to address problems in competitiveness in Vietnam must confront the dual structure of the light manufacturing sector, while raising the value added in the industry. To that end, measures must be taken to nurture the expansion of small domestic firms, while helping these firms to achieve greater productivity through trade integration. This will require improvements in labor skills and technology and in the quality and variety of products able to compete with imports. Policies to reduce the role of the state-owned sector, promote trading companies, encourage clustering and subcontracting, and raise foreign and social networking are important in this respect. To boost the value added of its goods, Vietnam needs to integrate the supply chain in assembly activities by investing in the upstream production of the goods in which it has a comparative advantage in production and in which it has already established a market share, such as agribusiness, garments, and wood. Unlike downstream activities, however, the production of the associated raw materials and intermediate goods is capital intensive and technology driven, and it requires skilled labor. Inviting foreign direct investment into these areas and reforming education and vocational systems are the best means to reach this goal. For this reason, the government should launch a complete review of the incentives for foreign direct investment to focus on upstream production and on bringing in capital and technical expertise, while improving labor and entrepreneurial skills. Based on this analysis, Light Manufacturing in Vietnam proposes concrete policy measures to increase employment and spur job creation by addressing sector-specific constraints. The book presents a set of practical recommendations for policy makers to identify, prioritize, and remove the most serious constraints in each sector. This book will be valuable for policy makers, entrepreneurs, workers, professional economists, and anyone interested in economic development, industrialization, and the structural transformation of Vietnam and of developing countries.
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dc.language.iso
en_US
en_US
dc.publisher
Washington, DC: World Bank
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dc.relation.ispartofseries
Directions in Development--Private Sector Development;
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dc.rights
CC BY 3.0 IGO
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dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
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dc.subject
Dutch disease
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dc.subject
agribusiness
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dc.subject
apparel
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dc.subject
copper
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dc.subject
leather goods
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dc.subject
light manufacturing
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dc.subject
metal products
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dc.subject
structural transformation
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dc.subject
wood products
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dc.title
Light Manufacturing in Vietnam : Creating Jobs and Prosperity in a Middle-Income Economy
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okr.date.disclosure
2014-01-23
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okr.topic
Industry::General Manufacturing
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okr.topic
Industry::Industrial Economics
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okr.topic
Macroeconomics and Economic Growth::Economic Development
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okr.topic
Private Sector Development::Emerging Markets
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okr.topic
Private Sector Development::Microenterprises
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okr.topic
Private Sector Development::Small and Medium Size Enterprises
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okr.sector
Industry and trade::Other industry
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okr.sector
Industry and trade::Other domestic and international trade
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okr.sector
Industry and trade::General industry and trade sector
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okr.region.administrative
East Asia and Pacific
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okr.identifier.report
84040
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okr.identifier.doi
10.1596/978-1-4648-0034-4
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okr.unit
DECOS
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okr.region.country
Vietnam
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okr.doctype
Publications & Research
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okr.doctype
Publications & Research :: Publication
en_US
dc.rights.holder
World Bank
en_US
okr.googlescholar.linkpresent
yes

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