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Michael Porter bn v tnh cnh tranh ca Vit Nam

Michael Porter.
Michael Porter c xem l mt nh chin lc xut sc nht hin nay bi hng lot cc cuc
bnh chn uy tn. Sau thnh cng trong vic t vn cho Thi Lan v nhiu quc gia chu khc,
cch y kh lu ng Michael Porter trnh by vi nguyn Th tng Phan Vn Khi nhng yu
t cu thnh sc mnh cnh tranh ca Vit Nam.
Di y l on trch gii thiu bi vit ca ng ng ti trn website chnh thc ti i hc Harvard.
Ch c cc doanh nghip mi c th to ra ca ci, khng phi chnh ph. Ti nhn thy Vit Nam mt
nng lc sn xut v mi trng lm vic rt tt.
S pht trin chnh l mt qu trnh nng cp nn kinh t, trong mi trng kinh doanh s l ni lun
ng h v khuyn khch nhng cch thc mi m v hiu qu to ra sc cnh tranh ca mi doanh
nghip ni ring v tng th doanh nghip trn ton quc ni chung cng nh ngay c trong thng
trng quc t. ni gin n nht v nng lc cnh tranh ca doanh nghip, nn kinh t v quc gia
Vit Nam, chng ta cn thu hiu vi vn chnh ca tnh cnh tranh.
iu u tin , l cn phi vt ln trn s da dm vo s tng trng xut khu. Nhng tn hiu ban u
cho thy tham vng c th xy dng Vit Nam tr thnh mt a im nng sut cao v nng cp cc khu
vc ni a.
Th n, ti nhn thy, v cc bo co quc t cng khng nh nh vy, l Vit Nam ang pht trin mt
khu vc c nhn trong nc mnh m v c lp. cng ng ngha vi vic pht trin qu trnh t hu
ho v s qun l ca Chnh ph, pht trin th trng ti chnh.
Mt iu ti quan trng l cn phi gii quyt nhng im yu ch cht ca mi trng kinh doanh, nh
tnh quan liu v t tham nhng, cng vi s yu km ca c s h tng.
Sau , ti cho rng Vit Nam cn phi tp trung vo nhng ngnh kinh t ch cht v c u th, nh du
lch, dt may, giy dp, thu hi sn v du kh.
C mt iu cui cng m ti mun mi ngi lu l cn phi thc y s pht trin theo nhng mc
khc nhau: cc tnh trong nc Vit Nam, khu vc ng Dng sau phi ln dn sang khu vc ng
Nam . l con ng quan trng cn theo.
Theo Kin Phc
Bo Si Gn Tip th

National Competitiveness:
Issues for Vietnam
Meeting with
Prime Minister Phan Van Khai
and his delegation

Professor Michael E. Porter


Institute for Strategy and Competitiveness
Harvard Business School
Cambridge, Massachusetts
June 24, 2005
This presentation draws on Michael Porter, Klaus Schwab: The Global Competitiveness Report 2004-2005, Oxford University
Press, 2004 and other sources. For further information on the Report and on the Institute for Strategy and Competitiveness see
www.isc.hbs.edu

200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Topics for Discussion

National competitiveness: essential concepts

Competitive assessment of Vietnam

Key issues for Vietnamese policy

Profile of the Institute for Strategy and Competitiveness

200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

What is Competitiveness?

Competitiveness is determined by the productivity (value per unit of input) with which
a nation, region, or cluster uses its human, capital, and natural resources.
Productivity sets a nations or regions standard of living (wages, returns on capital,
returns on natural resources)
Productivity depends both on the value of products and services (e.g. uniqueness,
quality) as well as the efficiency with which they are produced.
It is not what industries a nation or region competes in that matters for prosperity,
but how firms compete in those industries
Productivity in a nation or region is a reflection of what both domestic and foreign
firms choose to do in that location. The location of ownership is secondary for
national prosperity.
The productivity of local industries is of fundamental importance to
competitiveness, not just that of traded industries
Devaluation and revaluation do not make a country more or less competitive

Nations or regions compete in offering the most productive environment for


business

The public and private sectors should play different but interrelated roles in creating
a productive economy

200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Determinants of Competitiveness

Macroeconomic,
Macroeconomic, Political,
Political, Legal,
Legal, and
and Social
Social Context
Context

Microeconomic
Microeconomic Foundations
Foundations
The
TheSophistication
Sophistication
of
ofCompany
Company
Operations
Operationsand
and
Strategy
Strategy

The
TheQuality
Qualityof
ofthe
the
Microeconomic
Microeconomic
Business
Business
Environment
Environment

A sound macroeconomic, political, legal, and social context creates the potential
for competitiveness, but is not sufficient
Only firms can create wealth, not government
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Productivity and the Business Environment


Context
Context for
for
Firm
Firm
Strategy
Strategy
and
and Rivalry
Rivalry
z

Factor
Factor
(Input)
(Input)
Conditions
Conditions
z

Presence of high quality,


z
specialized inputs available
to firms
Human resources
Capital resources
Physical infrastructure
Administrative infrastructure
(e.g. business registration, rules,
licensing, property rights)
z
Information infrastructure
Scientific and technological
z
infrastructure
Natural resources

A local context and rules that


encourage investment and
sustained productivity
improvement
Demand
Demand
e.g., Intellectual property
Conditions
protection
Conditions
Meritocratic incentive systems
across all major institutions
z Sophisticated and demanding
Open and vigorous local
local customer(s)
competition
z Local customer needs that
anticipate those elsewhere
Related
and
Related and
z Unusual local demand in
Supporting
Supporting
specialized segments that can be
Industries
served nationally and globally
Industries
Access to capable, locally based suppliers
and firms in related fields
Presence of clusters instead of isolated
industries

Successful economic development is a process of successive economic upgrading, in


which the business environment in a nation evolves to support and encourage
increasingly sophisticated ways of competing
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Clusters and Competitiveness


Cairns (Australia) Tourism
Public
Public Relations
Relations &&
Market
Market Research
Research
Services
Services

Travel
Travel agents
agents

Tour
Tour operators
operators

Restaurants
Restaurants

Attractions
Attractions and
and
Activities
Activities

Food
Food
Suppliers
Suppliers

e.g.,
e.g., theme
theme parks,
parks,
casinos,
casinos, sports
sports

Property
Property
Services
Services

Maintenance
Maintenance
Services
Services

Airlines,
Airlines,
Cruise
Cruise Ships
Ships

Hotels
Hotels

Local
Local retail,
retail,
health
health care,
care, and
and
other
other services
services

Local
Local
Transportation
Transportation

Souvenirs,
Souvenirs,
Duty
Duty Free
Free
Banks,
Banks,
Foreign
Foreign
Exchange
Exchange

Government
Government agencies
agencies

Educational
Educational Institutions
Institutions

Industry
Industry Groups
Groups

e.g.
e.g. Australian
Australian Tourism
Tourism Commission,
Commission,
Great
Barrier
Reef
Authority
Great Barrier Reef Authority

e.g.
e.g. James
James Cook
Cook University,
University,
Cairns
College
of
Cairns College of TAFE
TAFE

e.g.
e.g. Queensland
Queensland Tourism
Tourism
Industry
Council
Industry Council

Sources: HBS student team research (2003) - Peter Tynan, Chai McConnell, Alexandra West, Jean Hayden
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Influences on Competitiveness
Multiple Geographic Levels
World Economy

Broad Economic Areas

ASEAN

Groups of Neighboring
Nations

Indochina

Nations

Vietnam

States, Provinces

Cities
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Specialization of Regional Economies


Select U.S. Geographic Areas

Seattle-BellevueSeattle-BellevueEverett,
Everett,WA
WA
Aerospace
AerospaceVehicles
Vehicles
and
andDefense
Defense
Fishing
Fishingand
andFishing
Fishing
Products
Products
Analytical
AnalyticalInstruments
Instruments

Denver,
Denver,CO
CO
Leather
Leatherand
andSporting
SportingGoods
Goods
Oil
and
Gas
Oil and Gas
Aerospace
AerospaceVehicles
Vehiclesand
andDefense
Defense

Chicago
Chicago
Communications
CommunicationsEquipment
Equipment
Processed
ProcessedFood
Food
Heavy
HeavyMachinery
Machinery

Wichita,
Wichita,KS
KS
Aerospace
AerospaceVehicles
Vehiclesand
and
Defense
Defense
Heavy
HeavyMachinery
Machinery
Oil
and
Oil andGas
Gas

Pittsburgh,
Pittsburgh,PA
PA
Construction
ConstructionMaterials
Materials
Metal
Manufacturing
Metal Manufacturing
Education
Educationand
andKnowledge
Knowledge
Creation
Creation

San
San FranciscoFranciscoOakland-San
Oakland-San Jose
Jose
Bay
Bay Area
Area
Communications
Communications
Equipment
Equipment
Agricultural
Agricultural
Products
Products
Information
Information
Technology
Technology

Los
Los Angeles
Angeles Area
Area
Apparel
Apparel
Building
Building Fixtures,
Fixtures,
Equipment
Equipment and
and
Services
Services
Entertainment
Entertainment

Boston
Boston
Analytical
AnalyticalInstruments
Instruments
Education
Educationand
andKnowledge
KnowledgeCreation
Creation
Communications
Equipment
Communications Equipment

Raleigh-Durham,
Raleigh-Durham,NC
NC
Communications
CommunicationsEquipment
Equipment
Information
InformationTechnology
Technology
Education
Educationand
and
Knowledge
KnowledgeCreation
Creation

San
SanDiego
Diego
Leather
Leatherand
andSporting
SportingGoods
Goods
Power
PowerGeneration
Generation
Education
Educationand
andKnowledge
Knowledge
Creation
Creation

Houston
Houston
Heavy
HeavyConstruction
ConstructionServices
Services
Oil
and
Oil andGas
Gas
Aerospace
AerospaceVehicles
Vehiclesand
andDefense
Defense

Atlanta,
Atlanta,GA
GA
Construction
ConstructionMaterials
Materials
Transportation
Transportationand
andLogistics
Logistics
Business
Services
Business Services

Note: Clusters listed are the three highest ranking clusters in terms of share of national employment
Source: Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Stages Of Competitive Development

Factor
-Driven
Factor-Driven
Economy
Economy

Investment
Investment-Driven
Driven Economy
Economy

Innovation
Innovation-Driven
Driven Economy
Economy

Input Cost

Efficiency

Unique Value

Macro, political, and


legal stability
Efficient basic
infrastructure
Lowering the regulatory
costs of doing business

Local competition
Market openness
Incentives and rules
encouraging productivity
Cluster development

Advanced skills
Advanced infrastructure
Incentives and rules
encouraging innovation

Cluster upgrading

Source: Porter, Michael E., The Competitive Advantage of Nations, Macmillan Press, 1990
200506 GCR Vietnam KC 2005.06.24.ppt

Copyright 2005 Professor Michael E. Porter

Shifting Responsibilities for Economic Development

Old
Old Model
Model

New
New Model
Model

Government
Government drives
drives economic
economic
development
development through
through policy
policy
decisions
decisions and
and incentives
incentives

Economic
Economic development
development is
is aa
collaborative
collaborative process
process involving
involving
government
government at
at multiple
multiple levels,
levels,
companies,
companies, teaching
teaching and
and
research
research institutions,
institutions, and
and
institutions
institutions for
for collaboration
collaboration

Competitiveness must become a bottoms-up process in which citizens take


responsibility
Every community and cluster can take steps to enhance competitiveness
200506 GCR Vietnam KC 2005.06.24.ppt

10

Copyright 2005 Professor Michael E. Porter

Vietnamese Competitiveness
Accomplishments

Strong GDP growth record; economic growth has been resilient during
the Asian Crisis and SARS

The poverty rate has fallen from 58% to 29% from 1992 to 2002

Solid labor productivity growth

Strong export growth

Strong FDI inflows

200506 GCR Vietnam KC 2005.06.24.ppt

11

Copyright 2005 Professor Michael E. Porter

Vietnamese Competitiveness
Issues

Prosperity remains at a low level

Labor productivity remains very low

Vietnams business environment remains very weak


Fall in the GCR business competitiveness ranking in 2004
Key weaknesses include corruption, physical infrastructure, skill
base, financial markets, technology, cluster depth and the nature of
competitive advantages

200506 GCR Vietnam KC 2005.06.24.ppt

12

Copyright 2005 Professor Michael E. Porter

Comparative Economic Performance


Real GDP Growth Rates

Countries sorted by 19982003 annual real GDP


growth rate (CAGR)

Annual growth rate


of real GDP

20%
CHINA
MYANMAR

15%

VIETNAM
CAMBODIA
LAOS

10%

INDIA
BANGLADESH
MALAYSIA

5%

THAILAND
PHILIPPINES
PAKISTAN

0%

HONG KONG
NEW ZEALAND
SRI LANKA

-5%

SINGAPORE
INDONESIA
TAIWAN

-10%

JAPAN
PAPUA NEW GUINEA

03
20

02
20

01
20

00
20

99
19

98
19

97
19

96
19

95
19

94
19

93
19

92
19

91
19

19

90

-15%

Source: EIU (2004)


200506 GCR Vietnam KC 2005.06.24.ppt

13

Copyright 2005 Professor Michael E. Porter

Comparative Economic Performance


30,000

Japan

Singapore

25,000

GDP per
capita
(PPP
adjusted)
in US-$,
2003

Hong Kong SAR


Taiwan

20,000

Slovenia
S Korea

15,000

Slovak Republic
10,000

Estonia
Latvia
Russia

Mexico
Thailand

Malaysia
5,000

Philippines
Indonesia
Bangladesh

Laos

0%

1%

2%

Myanmar

Cambodia

0
3%

4%

China

Vietnam

India

5%

6%

7%

8%

Compound annual growth rate of real GDP per capita, 1998-2003


Source: EIU (2004)
200506 GCR Vietnam KC 2005.06.24.ppt

14

Copyright 2005 Professor Michael E. Porter

Comparative Labor Productivity Performance


70,000

60,000

Hong Kong SAR


Taiwan
Singapore

Japan

50,000
GDP per
employee
(PPP
adjusted)
in US-$,
2003

40,000

S Korea

30,000

20,000

10,000

0
-20%

Malaysia
Philippines
Indonesia

Thailand
India

China

Vietnam
Bangladesh

-10%

0%

10%

20%

30%

Compound annual growth rate (CAGR) of real GDP per employee, 1998-2003
Source: EIU (2004)
200506 GCR Vietnam KC 2005.06.24.ppt

15

Copyright 2005 Professor Michael E. Porter

Vietnams Export Performance


World export
share in %

World Export Market Shares

0.30%

0.25%

0.20%
goods
services
total

0.15%

0.10%

0.05%

0.00%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: WTO (2005)
200506 GCR Vietnam KC 2005.06.24.ppt

16

Copyright 2005 Professor Michael E. Porter

Comparative Inward Foreign Investment


Selected Countries
FDI Stocks as % of GDP,
Average 2001-2003

Asian countries

80%

Netherlands

70%

Estonia
60%

Kazakhstan

Malaysia

Vietnam

Hungary

50%

Cambodia
40%

China

Czech Republic

Costa Rica

30%

Thailand
Poland
20%
Philippines
Russia
Taiwan
10%
S Korea
India
Japan
0%
0%

10%

Slovakia
Brazil
Slovenia

20%

30%

40%

50%

60%

FDI Inflows as % of Gross Fixed Capital Formation, Average 2001-2003


Source: UNCTAD (2004)
200506 GCR Vietnam KC 2005.06.24.ppt

17

Copyright 2005 Professor Michael E. Porter

Global Competitiveness Report 2004


The Relationship Between Business Competitiveness and GDP Per Capita
Norway

35,000

Asian countries

Iceland Canada

30,000

Ireland
Italy

2003 GDP per


Capita 25,000
(Purchasing
Power Adjusted)

Denmark
Switzerland
Netherlands
Finland
UK
Sweden
Singapore

Spain
Greece
Cyprus
Malta
Portugal
Czech Rep

15,000

Hungary
Slovak Rep.
Poland

Argentina
Croatia
Uruguay Chile
Bulgaria

10,000
Bosnia
Paraguay
Bolivia

Austria
Belgium
France
Taiwan

20,000

5,000

United States

Ethiopia

Vietnam
Malawi

New Zealand
Israel

Slovenia

S Korea

Estonia
Lithuania

Chile
Mexico Brazil
Turkey
Tunisia
Jamaica

China
Jordan

Ghana
Kenya

Indonesia

South Africa

Malaysia

India

Business Competitiveness Index


Source: Global Competitiveness Report 2004
200506 GCR Vietnam KC 2005.06.24.ppt

18

Copyright 2005 Professor Michael E. Porter

Factor
Factor
(Input)
(Input)
Conditions
Conditions

Factor (Input) Conditions


Vietnams Relative Position

Competitive Advantages
Relative to GDP per Capita

Competitive Disadvantages
Relative to GDP per Capita

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Administrative burden for startups

35

Quality of management schools

91

Reliability of police services

36

Overall infrastructure quality

84

Availability of scientists and engineers

40

Quality of scientific research institutions

84

Judicial independence

53

Cell phones per 100 people (2003)

84

Local equity market access

54

Extent of bureaucratic red tape

83

Telephone/fax infrastructure quality

55

Quality of the educational system

79

Efficiency of legal framework

55

Port infrastructure quality

77

Venture capital availability

57

Quality of electricity supply

77

Quality of public schools

58

University/industry research collaboration 74

Quality of math and science education

58

Railroad infrastructure development

61

Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capita
Source: Global Competitiveness Report 2004-2005
200506 GCR Vietnam KC 2005.06.24.ppt

19

Copyright 2005 Professor Michael E. Porter

Factor
Factor
(Input)
(Input)
Conditions
Conditions

Corruption
Asian countries

Rank in
Global
Corruption
Index,
2003

Vietnam
80

-15

-10

-5

10

15

Change in Rank, Global Corruption Report, 2003 versus 2001

Source: Global Corruption Report, 2003


200506 GCR Vietnam KC 2005.06.24.ppt

20

Copyright 2005 Professor Michael E. Porter

Factor
Factor
(Input)
(Input)
Conditions
Conditions

Communication Infrastructure
Vietnams Relative Position

Per 1,000 inhabitants,


2002

1000
900
800
700
600

Phonelines
Cell phones
Internet users

500
400
300
200
100

Ho
ng

Ko
ng
SA
Si
R
Ko nga
po
re
a,
r
Re e
p.
of
Ja
p
M an
al
ay
s
Th ia
ai
la
nd
C
Ph hin
ilip a
pi
In nes
do
ne
s
Vi ia
et
na
m
In
di
a
Ba Lao
s
ng
la
de
s
M
ya h
nm
ar

Source: Human Development Report (2004)


200506 GCR Vietnam KC 2005.06.24.ppt

21

Copyright 2005 Professor Michael E. Porter

Context
Contextfor
for
Firm
Strategy
Firm Strategy
and
andRivalry
Rivalry

Context for Firm Strategy and Rivalry


Vietnams Relative Position

Competitive Advantages
Relative to GDP per Capita

Competitive Disadvantages
Relative to GDP per Capita

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Cooperation in labor-employer relations

33

Hidden trade barrier liberalization

91

Decentralization of corporate activity

39

Prevalence of mergers and acquisitions

88

Extent of locally based competitors

40

Foreign ownership restrictions

86

Centralization of economic policy-making 41

Effectiveness of anti-trust policy

84

Favoritism in decisions of government


officials

50

Intellectual property protection

84

Regulation of securities exchanges

75

Protection of minority shareholders


interests

52

Business costs of corruption

69

Tariff liberalization

53

Intensity of local competition

66

Efficacy of corporate boards

61

Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capita
Source: Global Competitiveness Report 2004-2005
200506 GCR Vietnam KC 2005.06.24.ppt

22

Copyright 2005 Professor Michael E. Porter

Taxation

Context
Contextfor
for
Firm
Strategy
Firm Strategy
and
andRivalry
Rivalry

Selected Asian Countries

Positive

Incentive Effect
Complexity

an
Ja
p

m
Vi
et

na

s
Ph
ili
pp
in
e

ea
Ko
r

es
h
gl
ad
Ba
n

C
hi
na

d
Th
ai
la
n

di
a
In

a
al
ay
si
M

Ta
iw
an

ap
Si
ng

H
on

on
g

SA

or
e

Negative

Source: Global Competitiveness Report 2004


200506 GCR Vietnam KC 2005.06.24.ppt

23

Copyright 2005 Professor Michael E. Porter

Context
Contextfor
for
Firm
Strategy
Firm Strategy
and
andRivalry
Rivalry

Labor Market Regulation


Selected Asian Countries

Stringency of Labor Market


Regulation*, (0-100)

70
Restrictive
60
50
OECD

40

30

20
Liberal 10

Ko Ind
ia
re
a,
R
ep
C
.
am
bo
di
a
La
os
Vi
et
na
m
In
do
ne
si
a
Ta
iw
Ph
a
ilip n
pi
ne
Th s
ai
la
nd

C
hi
Ba
na
ng
la
de
sh

Si
ng
ap
or
e
M
al
ay
H
on sia
g
Ko
ng
Ja
pa
n

Note: Average of values for hiring, firing, and employment condition regulations
Source: World Bank (2005)
200506 GCR Vietnam KC 2005.06.24.ppt

24

Copyright 2005 Professor Michael E. Porter

Demand
Demand
Conditions
Conditions

Demand Conditions
Vietnams Relative Position

Competitive Advantages
Relative to GDP per Capita

Competitive Disadvantages
Relative to GDP per Capita
Country Ranking, Arrows
indicate a change of 5 or more
ranks since 1998

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Government procurement of advanced


technology products

32

Sophistication of local buyers' products


and processes

51

Buyer sophistication

60

Stringency of environmental regulations

89

Laws relating to ICT

85

Presence of demanding regulatory


standards

79

Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capita
Source: Global Competitiveness Report 2004-2005
200506 GCR Vietnam KC 2005.06.24.ppt

25

Copyright 2005 Professor Michael E. Porter

Related
Relatedand
and
Supporting
Supporting
Industries
Industries

Related and Supporting Industries


Vietnams Relative Position

Competitive Advantages
Relative to GDP per Capita

Competitive Disadvantages
Relative to GDP per Capita

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

Local availability of process machinery

Country Ranking, Arrows


indicate a change of 5 or more
ranks since 1998

63

State of cluster development

80

Local availability of specialized research


and training services

75

Local availability of components and parts 69


Extent of collaboration among clusters

68

Local supplier quantity

67

Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capita
Source: Global Competitiveness Report 2004-2005
200506 GCR Vietnam KC 2005.06.24.ppt

26

Copyright 2005 Professor Michael E. Porter

Vietnams Goods Export Portfolio


Exports by Cluster, 1997-2002
8.00%
Average Change in
Vietnams Total World
Export Share:
+0.100%

7.00%

Footwear

World Export Share, 2002

6.00%

5.00%

Fishing and Fishing Products

4.00%

3.00%

2.00%
Apparel
Vietnams Overall
World Export
Share: 0.280%

1.00%
Furniture

0.00%
-0.50%

0.00%

0.50%
1.00%
1.50%
2.00%
2.50%
Change in Vietnam's World Export Share, 1997-2002

Source: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.


200506 GCR Vietnam KC 2005.06.24.ppt

27

3.00%

3.50%

4.00%

Exports of
=
$500 million
Copyright 2005 Professor Michael E. Porter

Vietnams Goods Export Portfolio


Exports by Cluster, 1997-2002 (continued)
1.00%
Average Change in
Vietnams Total World
Export Share:
+0.100%

Coal and Briquettes

0.80%

World Export Share, 2002

Leather and Related Products

Oil and Gas Products

0.60%
Sporting, Recreational and
Childrens Goods

Agricultural Products

0.40%

Building Fixtures and Equipment

Processed Food

0.20%

Vietnams Overall
World Export
Share: 0.280%

Textiles
Plastics

Information Technology

Motor Driven Products


Lighting and Electrical Equipment

Construction Materials
Communications Equipment
Power Generation and Equipment

0.00%
-0.15%

-0.10%

-0.05%
0.00%
0.05%
0.10%
0.15%
Change in Vietnam's World Export Share, 1997-2002

Source: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.


200506 GCR Vietnam KC 2005.06.24.ppt

28

0.20%

0.25%

0.30%

Exports of
=
$500 million
Copyright 2005 Professor Michael E. Porter

Leading Vietnam Export Industries, 2002

Industry
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Crude petroleum oils


Miscellaneous footwear with leather soles
Crustaceans, mollusks, and aquatic invertebrates
Other footwear, rubber plastics
Coffee, coffee substitute
Gym, training shoes and the like rubber or plastics soles
Miscellaneous prepared or preserved fish, crustaceans and the like
Mens or boys overcoats, outerwear and similar articles
Rice, milled or semi-milled
Jerseys, pullovers, cardigans, waistcoats, knitted
Fish, fresh, chilled, or frozen
Other wooden furniture
Other travel bags, sets
Fruit, nuts excluding oil nuts
Womens or girls overcoats, other coats
Footwear, with textile uppers and rubber soles
Natural rubber, balata and similar natural gums
Mens or boys trousers, breeches and shorts
Insulted wire, cable and conductors
Womens or girls trousers, breeches and shorts
Printed circuits
Mens or boys shirts
Coal, not agglomerated
Convertible seats and parts
Other garments, not knitted

Cluster
Oil and Gas Products
Footwear
Fishing and Fishing Products
Footwear
Agricultural Products
Footwear
Fishing and Fishing Products
Apparel
Agricultural Products
Apparel
Fishing and Fishing Products
Furniture
Leather and Related Products
Agricultural Products
Apparel
Footwear
Plastics
Apparel
Communications Equipment
Apparel
Information Technology
Apparel
Coal and Briquettes
Building Fixtures and Equipment
Apparel

World Change in
Share
Export
Share 1997-2002
1.17%
1.03%
6.52%
2.28%
7.09%
3.53%
17.04%
8.86%
4.92%
3.39%
19.24%
14.33%
3.99%
0.85%
7.21%
5.63%
8.26%
9.14%
1.36%
0.42%
1.29%
0.63%
2.19%
0.74%
9.99%
9.67%
0.85%
0.23%
5.55%
4.99%
13.32%
10.92%
8.69%
1.43%
1.47%
0.61%
0.64%
0.08%
1.20%
0.33%
1.30%
1.17%
2.27%
1.55%
0.83%
0.73%
0.68%
0.42%
2.74%
1.81%

Export
Value in
$thousands
$ 3,076,200
$ 1,236,530
$ 999,876
$ 822,703
$ 406,669
$ 318,736
$ 304,603
$ 299,509
$ 285,029
$ 276,026
$ 272,800
$ 253,093
$ 244,351
$ 238,336
$ 234,641
$ 227,098
$ 214,343
$ 210,394
$ 210,329
$ 178,695
$ 172,631
$ 168,757
$ 168,194
$ 167,583
$ 136,924

Source: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.


200506 GCR Vietnam KC 2005.06.24.ppt

29

Copyright 2005 Professor Michael E. Porter

Leading Vietnam Export Industries, 2002 (continued)

26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

Industry
Other sports shoes with leather uppers
Spices
Ornamental ceramic articles
Bicycles and other cycles, non-motorized
Brassieres, corsets, braces, suspenders, garters
Baskets, brooms, brushes, paint rollers and mops
Children's toys
Womens or girls suits, dresses, skirts, trousers, knitted
Other sports shoes with rubber, plastics uppers and soles
Mens or boys shirts, knitted
Garments made of felt, miscellaneous nonwoven or coated fabrics
Parts for telecommunication equipment
Fans, cooker hoods with fan
Oxygen-function amino-compounds
T-shirts, other vests, knitted
Household linens
Electric motors<=37.5w
Gold, silver jewelry or ware
Headgear, knitted or made up from fabrics
Vegetables
Wood in chips or particles
Trunks, suit-cases, executive-case and similar containers
Miscellaneous articles of ceramic materials
Womens or girls underwear, nightwear, knitted
Bedroom furniture of wood

Cluster
Footwear
Agricultural Products
Furniture
Sporting, Recreational and Children's Goods
Apparel
Building Fixtures and Equipment
Sporting, Recreational and Children's Goods
Apparel
Footwear
Apparel
Apparel
Communications Equipment
Motor Driven Products
Chemical Products
Apparel
Textiles
Motor Driven Products
Jewelry, Precious Metals and Collectibles
Apparel
Agricultural Products
Forest Products
Leather and Related Products
Building Fixtures and Equipment
Apparel
Furniture

World Change in
Share
Export
Share 1997-2002
4.53%
1.90%
4.28%
4.82%
7.12%
2.89%
4.27%
0.39%
2.15%
0.91%
2.34%
1.14%
0.71%
0.33%
1.27%
0.34%
5.04%
8.64%
2.32%
1.20%
2.05%
1.03%
0.10%
0.04%
1.33%
0.00%
0.99%
0.76%
0.39%
0.28%
0.73%
0.90%
1.00%
0.03%
0.29%
0.09%
4.28%
1.50%
0.22%
0.22%
2.64%
1.25%
1.14%
0.64%
2.33%
0.55%
0.91%
0.38%
1.11%
0.13%

Export
Value in
$millions
$ 123,943
$ 105,836
$
98,323
$
98,077
$
88,453
$
82,093
$
79,772
$
79,439
$
76,009
$
71,320
$
65,119
$
61,402
$
61,047
$
58,318
$
55,028
$
54,577
$
53,569
$
53,046
$
52,140
$
47,857
$
45,236
$
45,019
$
44,415
$
43,821
$
43,615

Top 50 Industries as % of Vietnams total goods exports: 82.7%


Source: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.
200506 GCR Vietnam KC 2005.06.24.ppt

30

Copyright 2005 Professor Michael E. Porter

Key Issues for Vietnamese Competitiveness

Move beyond reliance on low wage-based export growth


Make Vietnam a more productive location
Upgrade domestic clusters

Develop an independent and vibrant domestic private sector


Improve privatization process and governance
Financial market development

Address key weaknesses in the business environment


e.g. Corruption and bureaucracy
Bottlenecks in physical infrastructure

Mobilize emerging clusters


Tourism
Shoes
Textiles
Fishing products
Oil and gas

Leverage different levels of geography


Regions within Vietnam
Indochina
ASEAN

200506 GCR Vietnam KC 2005.06.24.ppt

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Copyright 2005 Professor Michael E. Porter

Institute for Strategy and Competitiveness


Intellectual Agenda

Competition and
Firm Strategy

Competition and
Economic Development

Competition

Competition and
Society

200506 GCR Vietnam KC 2005.06.24.ppt

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Copyright 2005 Professor Michael E. Porter

Institute for Strategy and Competitiveness


Strategic Pillars

Research
Research and
and
Publications
Publications

Course
Course Platform
Platform
(MOC)
(MOC)

Competitiveness
Competitiveness
Information
Information

Institution
Institution Building
Building

200506 GCR Vietnam KC 2005.06.24.ppt

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Copyright 2005 Professor Michael E. Porter

Potential Resources for Vietnam

Course Microeconomics of Competitiveness

Competitiveness data on ISC web site

Connection to ISC partners in the region, especially the new Asian


Institute for Competitiveness in Singapore

Support for overall competitiveness or specific cluster efforts

200506 GCR Vietnam KC 2005.06.24.ppt

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Copyright 2005 Professor Michael E. Porter

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