Nearly half of private businesses lose money every year.

Expected to become the pillar of national economic development, the private sector is currently performing less efficiently than the state and FDI sectors. Nearly half of private enterprises make annual losses.

Signs of 'running out of breath'

Resolution 68 on private economic development sets specific goals by 2030 and a vision to 2045 to strive to have 2 million enterprises operating in the economy (equivalent to 20 enterprises/1,000 people); contribute 55-58% of GDP and 35-40% of total state budget revenue; create jobs for 84-85% of the workforce; labor productivity increases by an average of 8.5-9.5%/year; have at least 20 large private enterprises participating in the global value chain.

By 2045, there will be at least 3 million enterprises, the private economy will contribute over 60% of GDP and become a highly competitive force in the region and globally.

However, sharing at the seminar "Breakthrough solutions to remove bottlenecks in the development of the private economic sector" organized by the National Economics University (NEU) on the morning of August 15, Prof. Dr. Nguyen Thanh Hieu, Deputy Director of the National Economics University, said that compared to the expectation of becoming a pillar of national economic development, the private economic sector still has many shortcomings.

Prof. Dr. Nguyen Thanh Hieu, Deputy Director of National Economics University. Photo: NL

Currently, this is the sector with the lowest business efficiency, science and technology level, labor productivity and labor income among all economic sectors. At the same time, this sector is showing signs of "running out of steam" in the development process.

Mr. Hieu pointed out bottlenecks such as: inadequate awareness of the role of the private economy; institutions and policies that lack fairness and inclusiveness; no effective linkage model between components in the private sector; weak internal capacity and ability to absorb development resources and limitations in the quality of the business community.

Meanwhile, Professor Ngo Thang Loi (National Economics University) analyzed that the business performance of the private economic sector is lower than that of the state and FDI economic sectors when nearly half of the enterprises make annual losses.

“In terms of average pre-tax profit, each private enterprise is only equal to 0.52% of state-owned enterprises and nearly 3.1% of FDI enterprises. Labor productivity of the private economic sector is only equal to 34% of labor productivity of the state-owned enterprise sector and about 69% of labor productivity of the FDI sector,” said Mr. Loi.

For private enterprises to 'breakthrough'

Professor Ngo Thang Loi said that to achieve the 8% growth target, the private economic sector needs to achieve a growth rate of 10.3% from 2025. At the same time, to achieve the double-digit growth target, the private sector must grow at least 11.5-12% or more.

To do so, it is necessary to actively remove bottlenecks that hinder the development of the private economic sector.

The expert proposed a model and policies to implement an inclusive development model for the enterprise system with the goal of ensuring that all types of enterprises (private, state and FDI sectors) have equal opportunities in accessing inputs, in the business process and in distributing the output results of business activities.

Along with that, propose models and solutions to connect private economic forces of different scales and solutions to organize links between overseas Vietnamese enterprises and domestic private enterprises in localities with enterprises to improve the capacity of Vietnamese entrepreneurs.

From the business perspective, Dr. Tran Van The, Chairman of the Board of Directors of InDel Investment and Development Company, noted that to overcome shortcomings and create opportunities for private enterprises to break through, it is necessary to continue to improve institutions in a synchronous, transparent and stable direction, especially in areas where enterprises are facing many difficulties such as investment, land, credit and public-private partnership.

In particular, administrative procedure reform must be substantive, helping businesses save time and compliance costs.

Mr. The recommended that preferential tax mechanisms, financial support, technical assistance and the development of an innovation ecosystem be issued. In addition, conditions should be created for private enterprises to participate in public investment projects and national industrial supply chains.

Notably, Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition Research, proposed a breakthrough solution to create a dynamic business environment and empower leaders.

According to him, the volume of land-related documents in wards is currently very large. If the leaders are empowered and comply with legal regulations, the progress of work will be much faster, avoiding the situation where businesses have to wait for a long time.

Removing barriers and unleashing momentum for the private economy The private economy needs to be seen as the backbone of the country's development. It is important to create momentum and a favorable environment for entrepreneurs to clearly define their mission of building Vietnamese businesses and brands that can last.

Source: https://vietnamnet.vn/gan-mot-nua-so-doanh-nghiep-tu-nhan-thua-lo-hang-nam-2432352.html