Challenges that Vietnamese SMEs have been facing

Abstract

Vietnam economy is facing both opportunities and challenges of the market mechanism and globalization. Social and economic development policies have created positive outcomes. For instance, the economic structural change program has brought out promising results in improving the economic growth and contributing to a more proportionate structure of the industries. At the same time, the progress of integration and participation of Vietnam to international organizations and forums required business enterprises to have appropriate policies in order to adapt to the new business environment and meet the requirements of competition. Small and Medium Enterprises (SMEs), which are often considered as the direct result of the changes in economic thought after Renewal policy (Doi Moi) in 1986, is now playing an important part in the economy in terms of the quantity of enterprises as well as the contribution to the country’s GDP. Changes and continuous movements of the economy supported SMEs to expand and develop but brought into many difficulties and challenges. Therefore, the internal renewal is essential to the survival and development of SMEs themselves. The paper aims at identifying the challenges that SMEs have been facing and the root of those issues. Due to the difficulties in collecting data, the research limits primarily with the analysis on the data from the SMEs in Ho Chi Minh City. However, this limitation had a small impact on the research result as Ho Chi Minh City is the most developed city and has the highest contribution to GDP and the highest number of business enterprises. Finally, the research had provided a number of suggestions which may help SMEs overcome difficulties to develop sustainably and contribute more positively to the overall development of the economy.