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At the workshop, the professor, who is considered the father of the competitive strategy emphasized that if the private sector does not lead in the national economy, the sector, , should at least play a very important role in the economic development.

The Government needs a new role

According to the professor, in the current period, the Government of Vietnam needs to define a new role for itself to meet the requirements of a dynamic market economy which has been growing and becoming more integrated with the world.

Instead of supervision and control, the Government now needs to build the competitive advantages for a market economy.

The Government needs to strive to make Vietnam a business destination with clear competitive advantages, the professor said.

With the new role, the Government will create most favourable conditions for the market run according to certain rules. “The Government needs to provide a business environment with transparent and effective mechanism, where all enterprises of all economic sectors can compete in a fair way,” he said.

According to the professor, in the last two decades, Vietnam has gained impressive economic growth becoming a dynamic part of the global economy. However, some problems remain: the prosperity and productivity remain low, while the worries about the sustainability of the current growth model have been increasing.

“Vietnam still can attract investors thanks to its cheap labour force. However, in the context of the changing environment around the globe, the cheap labour force alone will not be enough to maintain a sustainable growth,” Professor Porter said.

The professor went on to say that Vietnam is now at an important moment, when it shifts from obtaining growth based on existing advantages to obtaining growth based on improving competitive capacity and creating new competitive advantages at higher levels.

It is now the right time for Vietnam to think about which positions Vietnam wants to hold in the global economy, which are the advantages of Vietnam’s business environment that Vietnam wants the world to know of.

Private sector should be seen as important asset

Though admitting that state owned enterprises are still an important part of the national economy and by the sector will still play an important role in the time to come, the professor thinks that with the current way of approaching policies in state owned enterprise management it is still difficult to create strong enterprises with high competitiveness as expected by policy makers.

Professor Porter stressed that private businesses should play a more important role in the economic development.

He believes that the private economic sector needs to be the leading sector in the economic development, and it should be seen as an important asset of the national economy.

Competitive capacity council establishment proposed

The council will have the function of coordinating and assisting Government’s agencies, supervising and reporting to the Communist Party’s agencies and the community about the process of implementing the programme to improve the competitive capacity.

In order to fulfill the function, three factors are important. The top leaders of the Government need to listen to ideas and opinions. The council needs to gather experts towork for the benefit of the whole country. And the council needs to have a perfect secretariat.

The suggestions shown in the report have been highly valued by Vietnamese Government’s leaders. Deputy Prime Minister Hoang Trung Hai said that the Government will discuss the suggestions, especially the one on the competitive capacity council.

Vietnamnet, 2/12/2010