Mr. Yashiro Hiroaki, Expert of Japan International Cooperation Agency (JICA), Chief Advisor of “Small and Medium-sized Enterprises Promotion and Industry Development” (a cooperation program among the Enterprise Development Agency, Ministry of Planning and Investment, Vietnam and JICA) gave a report at the event.

Mr. Yashiro Hiroaki presented his report

Mr. Yashiro Hiroaki briefly analyzed the current status of foreign direct investment (FDI) in Vietnam in recent years. Specifically, FDI statistics in Vietnam from 2018 up to now showed that: 2019 was the year with the largest number of approved FDI, but 2022 was the year Vietnam had the largest amount of implemented FDI capital ever. The manufacturing sector accounted for 61% of FDI into Vietnam in 2022, followed by real estate (16%), infrastructure (8%) and other fields (15%).

Regarding the investment environment in Vietnam, Mr. Yashiro Hiroaki said, according to a survey by JETRO, Japanese businesses have raised issues about increasing employee wages and procurement costs, exchange rate fluctuations, complicated administrative procedures such as customs procedures, and tax burden. Besides, in the past 10 years, the localization rate of Japanese enterprises was 30%. If only auto parts businesses were counted, this rate was only 7-10%, which was very low compared to Thailand's 80% and the average level in ASEAN was 55-60%.

According to Mr. Yashiro Hiroaki, this situation could be attributed to a number of reasons: technology of the manufacturing industry in Vietnam has not caught up with the requirements of Japanese enterprises; the cost of importing raw materials that Vietnam cannot yet produce was high while the cost of importing semi-finished products was low; products with a large weight were not suitable for import and export due to high transportation costs; the US-China trade conflict’s influence; typical supply chain of Japanese enterprises; etc.

With his practical experience, Mr. Yashiro Hiroaki said that Vietnam needed to focus on further enhancing the role of small and medium-sized enterprises, especially in supporting industries to attract FDI. In terms of population size, Vietnam has 99.5 million people compared to 124 million people in Japan. The ratio of small and medium-sized enterprises to the population in Japan is 2.8%, while the ratio in Vietnam is 0.7% compared to the population. Therefore, the number of small and medium-sized enterprises is expected to increase to 2 million enterprises along with the growth of the economy.

According to Mr. Yashiro Hiroaki, government agencies also needed to make efforts to perfect the legal institutions related to investment, introduce local businesses, build and implement institutions, preferential regimes and support for investment enterprises. Japanese enterprises expected Vietnamese counterparts to actively participate in the supply chain and improve their business and production capacity. Therefore, from October 2020 to the end of 2023, JICA cooperated with the Enterprise Development Agency, Ministry of Planning and Investment, Vietnam to implement the project "Promoting small and medium-sized enterprises and developing industry” to effectively support Vietnamese businesses.

On this occasion, Mr. Yashiro Hiroaki also introduced the management method of Japanese managers, explaining specifically about Japanese business administration and the characteristics of Japanese management philosophy. Explaining why Japan had the highest number of 100 and 200-year-old businesses in the world, Mr. Yashiro Hiroaki said that the common point in the common business philosophy of Japanese enterprises with more than 100 years of age is to contribute to employees, customers and society. For example, Takenaka Construction Corporation established in 1610 with the philosophy of "Leaving the world the best products, contributing to society" or Shiseido Cosmetics Corporation established in 1872 with the philosophy of "The World becomes better through the power of beauty. Get ready based on 8 beliefs”.

Mr. Yashiro Hiroaki affirmed that not only enterprises but government agencies, managers and consultants also needed to regularly pay attention to the world situation as well as the domestic business environment to grasp the movement of the economy, understand the basics of macroeconomics, thereby making policy adjustments, building suitable, flexible and effective business strategy.

On the basis of Mr. Yashiro Hiroaki's presentation on "Developing enterprises and improving the investment environment in Vietnam", Mr. Yashiro Hiroaki and Assoc. Prof. Dr. Bui Van Huyen, General Director of the Institute of Economics under the HCMA together with the participants discussed the topic "Actions to develop the local economy in the context that investment relations between Japan and Vietnam is expected to develop on the occasion of the 50th anniversary of Vietnam- Japan diplomatic relations”./.