Hanoi, June 19 (VNS/VNA) -Enterprise development and the digital economy need to be prioritised inpolicies, said Deputy Chairman of the Committee for Management of State Capitalat Enterprises (CMSC) Ho Sy Hung.

Speaking at a forum on businessdevelopment held by the Institute for Brand and Competitiveness Strategy in Hanoion June 18, Hung said domestic enterprises are still small with limitedproduction capacity.

“Enterprise development is vitalfor operational efficiency, job creation and prosperity of the economy,” Hungsaid.

The dynamics of the businesssector depend on the quality of the regulatory environment. If there areeffective regulations, it will help businesses save money and participate inthe market fairly, contributing to cutting transaction costs, protecting investorsand promoting competition,” he added.

According to Le Thi Xuan Hue, arepresentative from the Ministry of Planning and Investment’s Department forBusiness Registration Management, in the first five months of this year, therewere nearly 74,000 enterprises joining and re-entering the market, of which,nearly 54,000 were newly established businesses and nearly 20,000 businessesreturned to operation.

However, she said more than44,000 businesses withdrew from the market, of which more than 19,000 enterprisesregistered to suspend operations, more than 19,000 enterprises were waiting fordissolution and more than 6,000 enterprises completed dissolution procedures.

“In terms of capital size, nearly89 percent of newly established enterprises in the period have capital of lessthan 10 billion VND each and less than 3 percent have capital of between 50billion VND and 100 billion VND,” Hue said.

Hue said the reason for theincrease in the number of enterprises withdrawing from the market is mainly dueto weak capacity and competitive pressure, in addition to existing shortcomingsin the business and investment environment.

“With the current development ofthe business community, the Government’s goal of reaching one millionbusinesses from now to 2020 is not feasible,” Hue said.

In term of start-up development,Director of V-startup Vietnam Nguyen Thy Nga said that the business policy andenvironment greatly affected the development of enterprises.

She said there were many barriersfor small- and medium-sized enterprises (SMEs), especially start-ups, to expandoperations, including access to capital, financial and tax procedures. “Thebanking sector is still very reluctant to grant credit.”

At the forum, which was attendedby about 300 representatives from relevant ministries, agencies, businesses andeconomists, many experts proposed methods to support the development ofbusinesses.

They said it’s important topromote the reform of policies to enhance the development of the privatesector, making them the main driving force of the economy, increasingproductivity and economic growth. This required the Government to continueefforts to eliminate obstacles for private businesses and enhance the legalenvironment.

At the same time, the reform ofState-owned enterprises should focus on applying the best internationalpractices in corporate governance and promote equitisation and divestment.

Vietnamese businesses’ capacityto adapt to the digital economy is still limited, especially for small- andmedium-sized enterprises. They are facing difficulties when they want todevelop, including access to the internet.

The participants also agreed thatthe understanding of cyber security and the solving of problems online,technical infrastructure systems, technological level and basic knowledge ofonline development are still limited.

According to experts, Vietnameseenterprises need to aim at sustainable development and self-reliance, notwholly depending on digital technology.

With the opportunities andchallenges brought about by the digital economy, Vietnamese enterprises need toactively invest in advanced technology and research, applying new businessmodels and methods in order to develop faster.-VNS/VNA