BPI and the "health" of the private economy.

On May 15th, the Vietnam Chamber of Commerce and Industry (VCCI) announced the Business Performance Index (BPI). The introduction of this index immediately attracted attention because it marks the first time Vietnam has had its own set of indicators to measure the performance of the private sector at the local level.

The emergence of this index immediately attracted attention because it was the first time Vietnam had its own set of indicators to measure the effectiveness of the private sector 's development at the local level.

For many years, the Provincial Competitiveness Index (PCI) has been considered a key reform target, focusing on shortening processing times, reducing costs for businesses, and improving investor satisfaction. However, some localities that have consistently ranked at the top of the PCI rankings still have private economic sectors primarily composed of small and micro-enterprises, lacking leading businesses, with limited competitiveness and difficulty in creating long-term growth.

The sustainable development of the private sector is measured not only by the number of newly established businesses, but also by its capacity to expand production, participate in value chains, and create stable jobs for workers (In the photo: Workers at an export garment factory in Tuy Hoa ward).

Unlike the PCI, the BPI delves into the quality of private sector development through 23 criteria categorized into two major groups: private sector development and innovation capacity. The evaluation criteria go beyond simply the number of newly established businesses, considering profitability, supply chain participation, investment in research and development, and the ability to create added value. This means that a locality aiming for a high score needs not only a favorable investment environment but also a robust ecosystem to support business growth, capital accumulation, technological innovation, and market expansion.

According to the published results, Ho Chi Minh City leads the country with 5.67 points, followed by Hanoi with 5.41 points and Quang Ninh with 5.33 points. Dak Lak ranks 16th out of 34 provinces and cities with 4.33 points, higher than the national median of 4.2 points. This result shows that the province's private sector has made significant progress in recent years. From mainly relying on household businesses and the export of raw agricultural products, many local enterprises have begun to participate more deeply in the agricultural value chain. Fields such as coffee processing, durian export, organic farming, logistics, and e-commerce are creating a new face for the local private economy.

However, the 16th position also quite clearly reflects the limitations of Dak Lak's current private economy. The majority of businesses remain small and micro-sized, with limited financial capacity, low technological investment capabilities, and weak resilience to market fluctuations. Despite possessing large raw material areas, the number of businesses capable of deeply participating in the processing chain and building international brands is still small. Many businesses still depend on exporting raw materials or intermediary markets, resulting in low added value. Meanwhile, innovation – one of the two main pillars of the BPI – remains a significant gap for many businesses in the province.

In reality, the BPI (Business Performance Index) is not just a ranking but acts as a "mirror" reflecting the governance capacity and ability to create a favorable development environment for localities. Dak Lak possesses significant advantages in agriculture, renewable energy, tourism, and export agricultural markets, but transforming this potential into real economic strength relies heavily on the leadership of the local government. Businesses cannot grow without a strong supporting ecosystem, encompassing access to capital, science and technology, human resource training, market connections, and brand building. This also requires localities to move beyond administrative reforms and shift towards a mindset of partnering with, nurturing, and creating long-term development momentum for the private sector.

Ultimately, what BPI emphasizes is not simply a ranking but also a demand for a change in development thinking. A locality's competitiveness is not only reflected in its growth rate or the number of investment projects, but also in its ability to form a business community capable of going far, creating added value, and becoming a driving force for sustainable economic development.

Le Hao

Source: https://baodaklak.vn/kinh-te/202606/bpi-va-suc-khoe-cua-kinh-te-tu-nhan-70b32ef/