The manufacturing sector in Vietnam is a driving force behind its economic growth. Vietnam has also positioned itself as a manufacturing hub due to its geographical location, favorable government policies, low labor cost, large labor pool, and China+1 Strategy. But most Vietnamese Private Enterprises (PEs), constituting a major portion of all manufacturing enterprises in Vietnam, still participate in the labor-intensive, less profitable, low value-added stages of the global value chain. If Vietnamese PEs can adapt to "The New Normal" of global manufacturing by enhancing their competencies throughout the supply chain, they can increase their prospects of advancing along the global value chain.
This report is structured to provide an overview of the current state of Vietnam’s position in the Global Value Chain and a forward-looking view of what is possible.
Integration into Global Value Chains
Insights into Vietnam’s position in the Global Value Chain in terms of ‘Where we are' to 'Where to go next' and 'How to go’.
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Key benefits for Vietnam from transitioning to a higher stage in the Global Value Chain:
Higher profit margin
Derived from more sophisticated products & production stages and application of advanced technologies & enhanced efficiency and capabilities
New business opportunities
Gaining growth and expanding market penetration through economic diversification into new o-adjacent industries
for diversifying or relocating supply chains
Derived from a well-developed infrastructure, good policy (incl. trade policy, inward FDI openness) and GVC-related factors (incl. institutional policy, customs, etc.)
Improved employment conditions
Better employment with improved wage rates and working conditions due to reduction of participation in labor-intensive stages and focus on advanced labor development