Flexibility to adapt to the volatile business environment


Flexibility to adapt to the volatile business environment
Enterprises need to have innovations and creativity to proactively adapt to the continuous fluctuations of the market. Photo: Internet

Therefore, it is predicted that the world economy is experiencing instability.

Unstable and volatile

The Covid-19 pandemic is slowly passing, but the outbreak of military tensions between Russia and Ukraine has pushed the world into new crises. In 2022, the world economy is immersed in escalating inflation; tighten monetary policy, real estate and stock markets fluctuation.

These problems are still lingering. As many forecasts, it is not until the second half of 2023, even the beginning of 2024, that there will be signs of recovery.

Mr. Trinh Minh Anh, Chief of Office of the Inter-sectoral Steering Committee for International Economic Integration: Opportunities and challenges

The world is witnessing many unpredictable changes. Opportunities and challenges of Vietnamese enterprises in the process of accessing supply chains and expanding international markets are intertwined. Therefore, in order to participate in the global value chain, businesses need to raise awareness, actively equip knowledge and acquire the characteristics of the international market. At the same time, enterprises need to focus on the quality of exports to meet the requirements of the market, by investing in the development of production lines, applying science and technology, towards clean and sustainable green production and reinforcement innovation in export products as well as building and developing brands for export goods. The State also needs to create an open and favorable business environment for businesses.

Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management: Vietnamese enterprises can be adaptable

Slowing growth in Vietnam’s key export markets such as the United States, China and the eurozone may negatively affect Vietnam’s exports. However, the main export markets of Vietnam are expected to recover from the second half of the year, thereby bringing a positive impact on exports. In this context, one difficulty that businesses must deal with is how to ensure jobs and income to retain workers in the period of few orders in the first half of 2023, and at the same time prepare labour force to welcome more new orders in the year-end months.

The experience of diversifying exports in the context of the Covid-19 epidemic and the Russia-Ukraine conflict shows that Vietnamese enterprises can adapt and exploit the potential of many new export markets and industries. Moreover, the Government needs to create more space for new economic models in a sustainable way, continuing to remove difficulties in accessing capital for businesses. Moreover, it is necessary to put more weight on maintaining and consolidating macroeconomic stability, controlling inflation, and stabilizing exchange rates in order to support and create peace of mind for businesses.

Minh Chi (recorded)

For domestic enterprises, after a long period of supply chain interruption due to epidemics, uncertainties and political tensions, it is now affected by a decrease in consumer demand due to inflation, raw material and logistics prices, which negatively affected import and export activities and decreased orders sharply.

Although Vietnam still had a trade surplus of 4.07 billion USD in the first quarter of the year, the export and import turnover of goods are decreasing by 11.9% and 14.7%, respectively.

In addition, more severe conditions in trade and production due to the introduction of many modern technologies have affected competitiveness.

For example, at the beginning of this year, the emergence of ChatGPT – an artificial intelligence (AI) chatbot brought opportunities for innovation but also created challenges that forced businesses to pay more attention and investment in technology. On the other hand, the issues of sustainable growth, green growth, and economic circulation are also increasingly concerning, even a mandatory requirement when cooperating and trading with foreign partners.

Fix and adapt

In the above circumstances, businesses need to find new directions to ensure growth in the current context.

According to the Global Innovation Index (GII) Report 2022 of the World Intellectual Property Organization (WIPO), Vietnam currently ranks 48th out of 132 economies in terms of innovation capacity and takes third in Southeast Asia, after Singapore and Thailand. Vietnam is also one of the three middle-income economies with the fastest growth rate of innovation performance to date. Talking at the recent forum on corporate repositioning for sustainable development, according to Ms. Lam Thuy Nga, National Director of Large Corporate Banking, HSBC Vietnam, internally, Vietnam bears a high spirit of innovation, which can be the driving force for enterprises to improve their production and business activities in order to enhance their economic capacity.

Talking about the adaptation to green growth, a representative of HSBC Vietnam said that many domestic corporate customers have developed strategies and quickly moved towards more sustainable production and business activities. Some enterprises have completely changed their operation orientation, pursuing the goal of green production; meanwhile, some enterprises have boldly invested in advanced equipment to build a circular economy model.

Sharing about the current situation of enterprises in the wood industry, Mr. Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association, said that wood products related to forests and trees should be constantly being “reviewed” in terms of raw materials. In fact, Vietnamese wood products have to borrow foreign brands for export even though Vietnam is a large wood exporter. Another big challenge, according to Mr. Hoai, is that businesses have been relying too much on the US market.

Therefore, Mr. Ngo Sy Hoai said, to overcome the weaknesses and inadequacies, wood industry enterprises need to build a chain of links in depth from businesses; renew technological equipment in the direction of green economy and green trade. Moreover, it is necessary to strengthen the accountability of wood processing in the direction of a circular economy, ensure traceability; strengthen design capacity, build Vietnamese wood brand; and promote e-commerce market diversification.

​Also on this issue, Mr. Than Duc Viet, Director of Garment 10 Joint Stock Company added, in spite of the company’s stable position in the domestic and export markets, without renovation and flexibility, this company will be unable to adapt to the current context. With the export market, May 10 must find a way to expand to new markets such as Africa, the Middle East besides the traditional markets. At the same time, the company also has to change production technology, such as using raw materials and accessories to ensure green production criteria.

According to experts, Vietnam needs to build an environment in which the Government has specific guidelines and orientations to help businesses, especially small and medium-sized ones, realize the importance of repositioning business operations through innovation, to seize new opportunities promptly.

Enterprises must actively learn from sharing activities in the business community, from domestic and international consulting organizations, the world’s business and investment trends, and new requirements of consumers, advanced technologies to flexibly apply to business activities in order to improve labor productivity, quality, and the added value of products and services.


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