Issue date: 23 October 2003

ISSUE DATE: 23/10/03

Rapid economic growth is transforming Vietnam which, like China, has opened up to outside influences over the past fifteen years. Vietnam’s policy of ‘renovation’, allowing people to own property and run their own businesses, has led to a boom in new privately owned businesses, according to researchers from the University of the West of England (UWE). Typical of the new entrepreneurs are former ‘boat people’ who left the country during the 1980s and are now being encouraged to return.

The economy is growing at a rate of 7% per annum, but UWE’s survey of fifty-six small companies showed that issues of raising capital and an undeveloped IT infrastructure are holding back potentially even larger gains.

The UWE survey of enterprise clusters studied in the Red River Delta area, near Hanoi, showed that although 80% of the mainly family-run businesses used computers and email, only 20% had websites.

“There is a lack of understanding of the benefits of the internet, and with no credit cards in circulation, e-commerce is impossible. Also, with no culture of individuals holding mortgages, it is not easy for them to raise bank loans on property to finance business expansion,” said Dimitrios Konstadakopulos, of UWE’s School of European and International Area Studies, who has just returned from two months in Vietnam conducting the survey.

Businesses studied ranged from producers of outsourced pottery and furniture for a large Scandinavian homewares chain to weavers and embroiderers who create handicrafts for the Canadian or French market. At 80 million, Vietnam’s largely rural-based population is the thirteenth largest in the world. Following the Vietnam war, the economy collapsed but now there is a skills shortage and those who left as ‘boat people’ are being enticed back. Most of all, according to Dr Konstadakopulos, the young businesses are in need of English language training, and marketing and internet know-how to improve their competitiveness.

While he was there, Dimitrios gave a lecture at the Centre for European Studies in Hanoi to over forty students and officials from business support organisations. The Centre is supported by the EU’s Delegation to Vietnam, and aims to promote collaboration between European and Vietnamese academics. Dr Konstadakopulos’ findings have just been presented at the 2003 ASEASUK conference at Leeds University. He is Senior Research Fellow at UWE and a Visiting Fellow at the Institute of Southeast Asian Studies in Singapore. His latest project - Adopting Information and Communication technologies in small enterprise clusters in Vietnam - is his third in SE Asia and was funded by an award from the British Academy's Committee for South East Asian Studies.


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