porter in vn

Upload: adrianwee

Post on 07-Apr-2018

222 views

Category:

Documents


0 download

TRANSCRIPT

  • 8/4/2019 Porter in Vn

    1/34

    National Competitiveness:Issues for Vietnam

    Meeting withPrime Minister Phan Van Khai

    and his delegation

    Professor Michael E. PorterInstitute for Strategy and Competitiveness

    Harvard Business School

    Cambridge, MassachusettsJune 24, 2005

    1 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    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 seewww.isc.hbs.edu

    http://www.isc.hbs.edu/http://www.isc.hbs.edu/
  • 8/4/2019 Porter in Vn

    2/34

  • 8/4/2019 Porter in Vn

    3/34

    What is Competitiveness?

    3 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Competitiveness is determined by the productivity (value per unit of input) with whicha 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 foreignfirms choose to do in that location. The location of ownership is secondary for

    national prosperity.

    The productivity of local industries is of fundamental importance tocompetitiveness, 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

  • 8/4/2019 Porter in Vn

    4/34

    Determinants of Competitiveness

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

    Microeconomic FoundationsMicroeconomic Foundations

    The Quality of theMicroeconomic

    BusinessEnvironment

    The Quality of theThe Quality of theMicroeconomicMicroeconomic

    BusinessBusiness

    EnvironmentEnvironment

    The Sophisticationof Company

    Operations andStrategy

    The SophisticationThe Sophisticationof Companyof Company

    Operations andOperations and

    StrategyStrategy

    A sound macroeconomic, political, legal, and social context creates the potential

    for competitiveness, but is not sufficient

    Only firms can create wealth, not government

    4 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    5/345 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Context forFirm

    Strategyand Rivalry

    Context forFirm

    Strategyand Rivalry

    Related andSupportingIndustries

    Related andSupportingIndustries

    Factor(Input)

    Conditions

    Factor(Input)Conditions

    DemandConditionsDemand

    Conditions

    Productivity and the Business Environment

    Successful economic development is a process of successive economic upgrading, inwhich the business environment in a nation evolves to support and encourageincreasingly sophisticated ways of competing

    Sophisticated and demanding

    local customer(s) Local customer needs that

    anticipate those elsewhere Unusual local demand in

    specialized segments that can beserved nationally and globally

    Presence of high quality,

    specialized inputs availableto firms Human resources Capital resources Physical infrastructure Administrative infrastructure

    (e.g. business registration, rules,licensing, property rights)

    Information infrastructure Scientific and technological

    infrastructure Natural resources

    Access to capable, locally based suppliersand firms in related fields

    Presence of clusters instead of isolatedindustries

    A local context and rules thatencourage investment andsustained productivityimprovement

    e.g., Intellectual propertyprotection

    Meritocratic incentive systemsacross all major institutions

    Open and vigorous local

    competition

  • 8/4/2019 Porter in Vn

    6/34

    Clusters and CompetitivenessCairns (Australia) Tourism

    HotelsHotels

    Attractions andActivities

    e.g., theme parks,casinos, sports

    Attractions andActivities

    e.g., theme parks,casinos, sports

    Airlines,Cruise Ships

    Airlines,Cruise Ships

    Travel agentsTravel agents Tour operatorsTour operators

    RestaurantsRestaurants

    PropertyServices

    Property

    Services Souvenirs,Duty Free

    Souvenirs,Duty Free

    Banks,Foreign

    Exchange

    Banks,Foreign

    Exchange

    LocalTransportation

    LocalTransportation

    Maintenance

    Services

    MaintenanceServices

    Government agenciese.g. Australian Tourism Commission,

    Great Barrier Reef Authority

    Government agenciese.g. Australian Tourism Commission,

    Great Barrier Reef Authority

    Educational Institutionse.g. James Cook University,

    Cairns College of TAFE

    Educational Institutionse.g. James Cook University,

    Cairns College of TAFE

    Industry Groupse.g. Queensland Tourism

    Industry Council

    Industry Groupse.g. Queensland Tourism

    Industry Council

    FoodSuppliers

    FoodSuppliers

    Public Relations &Market Research

    Services

    Public Relations &Market Research

    Services

    Local retail,

    health care, andother services

    Local retail,

    health care, andother services

    Sources: HBS student team research (2003) - Peter Tynan, Chai McConnell, Alexandra West, Jean Hayden6 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    7/34

    Influences on CompetitivenessMultiple Geographic Levels

    Broad Economic AreasBroad Economic Areas

    Groups of NeighboringGroups of Neighboring

    NationsNations

    States, ProvincesStates, Provinces

    CitiesCities

    NationsNations

    World EconomyWorld Economy

    ASEAN

    Indochina

    Vietnam

    7 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    S i li ti f R i l E i

  • 8/4/2019 Porter in Vn

    8/34

    Specialization of Regional EconomiesSelect U.S. Geographic Areas

    BostonAnalytical Instruments

    Education and Knowledge Creatio

    Communications Equipment

    BostonAnalytical InstrumentsEducation and Knowledge Creatio

    Communications Equipment

    Los Angeles AreaApparel

    Building Fixtures,

    Equipment and

    Services

    Entertainment

    Los Angeles AreaApparel

    Building Fixtures,

    Equipment and

    Services

    Entertainment

    Chicago

    Communications EquipmentProcessed Food

    Heavy Machinery

    ChicagoCommunications Equipment

    Processed Food

    Heavy Machinery

    Denver, CO

    Leather and Sporting GoodsOil and GasAerospace Vehicles and Defense

    Denver, COLeather and Sporting Goods

    Oil and Gas

    Aerospace Vehicles and Defense

    San DiegoLeather and Sporting Goods

    Power Generation

    Education and Knowledge

    Creation

    San DiegoLeather and Sporting Goods

    Power Generation

    Education and Knowledge

    Creation

    San Francisco-Oakland-San JoseBay Area

    CommunicationsEquipment

    Agricultural

    Products

    Information

    Technology

    San Francisco-Oakland-San JoseBay Area

    CommunicationsEquipment

    Agricultural

    Products

    Information

    Technology

    Seattle-Bellevue-Everett, WAAerospace Vehicles

    and Defense

    Fishing and Fishing

    Products

    Analytical Instruments

    Seattle-Bellevue-Everett, WAAerospace Vehicles

    and Defense

    Fishing and Fishing

    Products

    Analytical Instruments

    HoustonHeavy Construction Services

    Oil and Gas

    Aerospace Vehicles and Defense

    HoustonHeavy Construction Services

    Oil and Gas

    Aerospace Vehicles and Defense

    Pittsburgh, PAConstruction Materials

    Metal Manufacturing

    Education and Knowledge

    Creation

    Pittsburgh, PAConstruction Materials

    Metal Manufacturing

    Education and Knowledge

    Creation

    Atlanta, GAConstruction Materials

    Transportation and Logistics

    Business Services

    Atlanta, GAConstruction Materials

    Transportation and Logistics

    Business Services

    Raleigh-Durham, NCCommunications EquipmentInformation Technology

    Education and

    Knowledge Creation

    Raleigh-Durham, NCCommunications Equipment

    Information Technology

    Education and

    Knowledge Creation

    Wichita, KSAerospace Vehicles and

    Defense

    Heavy Machinery

    Oil and Gas

    Wichita, KSAerospace Vehicles and

    Defense

    Heavy Machinery

    Oil and Gas

    8 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    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

  • 8/4/2019 Porter in Vn

    9/34

    Stages Of Competitive Development

    Factor-DrivenEconomy

    FactorFactor--DrivenDriven

    EconomyEconomyInvestment-

    Driven Economy

    InvestmentInvestment--

    Driven EconomyDriven EconomyInnovation-

    Driven Economy

    InnovationInnovation--

    Driven EconomyDriven Economy

    Input Cost Efficiency Unique Value

    Macro, political, andlegal stability

    Efficient basicinfrastructure

    Lowering the regulatorycosts of doing business

    Local competition

    Market openness

    Incentives and rulesencouraging productivity

    Cluster development

    Advanced skills

    Advanced infrastructure

    Incentives and rulesencouraging innovation

    Cluster upgrading

    Source: Porter, Michael E., The Competitive Advantage of Nations, Macmillan Press, 1990

    9 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    10/34

    Shifting Responsibilities for Economic Development

    Old ModelOld Model New ModelNew Model

    Government drives economic

    development through policy

    decisions and incentives

    Government drives economic

    development through policy

    decisions and incentives

    Economic development is a

    collaborative process involving

    government at multiple levels,

    companies, teaching and

    research institutions, and

    institutions for collaboration

    Economic development is a

    collaborative process involving

    government at multiple levels,

    companies, teaching and

    research institutions, and

    institutions for collaboration

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

    Every community and cluster can take steps to enhance competitiveness

    10 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    11/34

    Vietnamese CompetitivenessAccomplishments

    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

    11 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    12/34

    Vietnamese CompetitivenessIssues

    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

    12 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    13/34

    Comparative Economic PerformanceReal GDP Growth Rates

    -15%

    -10%

    -5%

    0%

    5%

    10%

    15%

    20%

    1990

    1991

    1992

    1993

    1994

    1995

    1996

    1997

    1998

    1999

    2000

    2001

    2002

    2003

    CHINA

    MYANMAR

    VIETNAM

    CAMBODIA

    LAOS

    INDIA

    BANGLADESH

    MALAYSIA

    THAILAND

    PHILIPPINES

    PAKISTAN

    HONG KONG

    NEW ZEALAND

    SRI LANKA

    SINGAPORE

    INDONESIA

    TAIWAN

    JAPAN

    PAPUA NEW GUINEA

    Source: EIU (2004)

    Countries sorted by 1998-2003 annual real GDP

    growth rate (CAGR)

    Annual growth rate

    of real GDP

    13 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    14/34

    Comparative Economic Performance

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    0% 1% 2% 3% 4% 5% 6% 7% 8%

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

    GDP percapita(PPP

    adjusted)in US-$,

    2003

    Source: EIU (2004)

    Vietnam

    Japan

    Thailand

    S Korea

    Indonesia

    Malaysia

    LaosPhilippines

    Taiwan

    Bangladesh

    China

    Hong Kong SAR

    India

    Myanmar

    Singapore

    Cambodia

    Estonia

    Latvia

    Slovenia

    Slovak Republic

    RussiaMexico

    14 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    15/34

    Comparative Labor Productivity Performance

    0

    10,000

    20,000

    30,000

    40,000

    50,000

    60,000

    70,000

    -20% -10% 0% 10% 20% 30%

    Compound annual growth rate (CAGR) of real GDP per employee, 1998-2003

    GDP peremployee

    (PPPadjusted)

    in US-$,2003

    Source: EIU (2004)

    Vietnam

    Japan

    Thailand

    S Korea

    Indonesia

    MalaysiaPhilippines

    Taiwan

    Bangladesh

    China

    Hong Kong SAR

    India

    Singapore

    15 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

  • 8/4/2019 Porter in Vn

    16/34

    Vietnams Export PerformanceWorld Export Market Shares

    0.00%

    0.05%

    0.10%

    0.15%

    0.20%

    0.25%

    0.30%

    1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

    goods

    servicestotal

    World exportshare in %

    16 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.pptSource: WTO (2005)

  • 8/4/2019 Porter in Vn

    17/34

    Comparative Inward Foreign InvestmentSelected Countries

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    0% 10% 20% 30% 40% 50% 60%

    FDI Stocks as % of GDP,

    Average 2001-2003

    Vietnam

    Japan

    Netherlands

    Brazil

    Costa Rica

    Kazakhstan

    Cambodia

    China

    India

    Malaysia

    Philippines

    Taiwan

    Thailand

    Czech Republic

    Estonia

    Hungary

    Poland

    S Korea

    Russia

    Slovakia

    Slovenia

    Asian countries

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

    Source: UNCTAD (2004)

    17 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Global Competitiveness Report 2004

  • 8/4/2019 Porter in Vn

    18/34

    18 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    Global Competitiveness Report 2004The Relationship Between Business Competitiveness and GDP Per Capita

    United States

    Switzerland

    UK

    Denmark

    Singapore

    New Zealand

    Taiwan

    Norway

    Iceland

    Ireland

    GreeceIsrael

    Italy

    S Korea

    Hungary

    India

    Netherlands

    Spain

    Czech Rep

    Portugal

    Business Competitiveness Index

    2003 GDP perCapita

    (PurchasingPower Adjusted)

    Brazil Malaysia

    China

    Chile

    VietnamJordan

    Uruguay

    ArgentinaSouth Africa

    Source: Global Competitiveness Report 2004

    Estonia

    Indonesia

    Sweden

    Malta

    Kenya

    Austria

    Paraguay

    Croatia

    Slovak Rep.

    Tunisia

    PolandLithuania

    Bulgaria

    Canada

    France FinlandBelgium

    Cyprus Slovenia

    Chile

    Ghana

    Ethiopia

    Bolivia

    Malawi

    Turkey

    Mexico

    Jamaica

    Bosnia

    Asian countries

    F t (I t) C ditiFactor

    Factor

  • 8/4/2019 Porter in Vn

    19/34

    Factor (Input) ConditionsVietnams Relative Position

    Factor(Input)

    Conditions

    Factor(Input)

    Conditions

    Administrative burden for startups 35

    Reliability of police services 36

    Availability of scientists and engineers 40

    Judicial independence 53

    Local equity market access 54Telephone/fax infrastructure quality 55

    Efficiency of legal framework 55

    Venture capital availability 57

    Quality of public schools 58

    Quality of math and science education 58

    Railroad infrastructure development 61

    Competitive AdvantagesRelative to GDP per Capita

    Country Ranking, Arrowsindicate a change of 5 or more

    ranks since 1998

    Competitive DisadvantagesRelative to GDP per Capita

    Quality of management schools 91

    Overall infrastructure quality 84

    Quality of scientific research institutions 84

    Cell phones per 100 people (2003) 84

    Extent of bureaucratic red tape 83Quality of the educational system 79

    Port infrastructure quality 77

    Quality of electricity supply 77

    University/industry research collaboration 74

    Country Ranking, Arrowsindicate a change of 5 or more

    ranks since 1998

    19 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capitaSource: Global Competitiveness Report 2004-2005

    Factor Corruption

    Factor

  • 8/4/2019 Porter in Vn

    20/34

    -15 -10 -5 0 5 10 15

    Vietnam

    Change in Rank, Global Corruption Report, 2003 versus 2001

    Rank inGlobal

    CorruptionIndex,2003

    80

    1

    Factor(Input)

    Conditions

    CorruptionFactor(Input)

    Conditions

    Asian countries

    Source: Global Corruption Report, 2003

    20 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Factor

    Factor

  • 8/4/2019 Porter in Vn

    21/34

    Factor(Input)

    Conditions

    Factor(Input)

    ConditionsCommunication Infrastructure

    Vietnams Relative Position

    21 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    0

    100

    200

    300

    400

    500

    600

    700

    800

    900

    1000

    Hong

    KongSAR

    Singa

    pore

    Kore

    a,Rep.

    of

    Jap

    an

    Malay

    sia

    Tha

    iland

    C

    hina

    Philippin

    es

    Indone

    sia

    Vietn

    am India

    Laos

    Bangla

    desh

    Myanm

    ar

    Phonelines

    Cell phones

    Internet users

    Per 1,000 inhabitants,2002

    Source: Human Development Report (2004)

    Context for

    Context forContext for Firm Strategy and Rivalry

  • 8/4/2019 Porter in Vn

    22/34

    Context forFirm Strategyand Rivalry

    Firm Strategyand Rivalry

    Context for Firm Strategy and RivalryVietnams Relative Position

    Cooperation in labor-employer relations 33

    Decentralization of corporate activity 39

    Extent of locally based competitors 40

    Centralization of economic policy-making 41

    Favoritism in decisions of government 50officials

    Protection of minority shareholders 52interests

    Tariff liberalization 53

    Efficacy of corporate boards 61

    Competitive AdvantagesRelative to GDP per Capita

    Competitive DisadvantagesRelative to GDP per Capita

    Country Ranking, Arrows

    indicate a change of 5 or moreranks since 1998

    Country Ranking, Arrows

    indicate a change of 5 or moreranks since 1998

    Hidden trade barrier liberalization 91

    Prevalence of mergers and acquisitions 88

    Foreign ownership restrictions 86

    Effectiveness of anti-trust policy 84

    Intellectual property protection 84

    Regulation of securities exchanges 75

    Business costs of corruption 69

    Intensity of local competition 66

    22 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capitaSource: Global Competitiveness Report 2004-2005

    TaxationContext for

    Context for

  • 8/4/2019 Porter in Vn

    23/34

    TaxationSelected Asian Countries

    Context forFirm Strategyand Rivalry

    Firm Strategyand Rivalry

    HongK

    ong

    SAR

    Sing

    apor

    e

    Taiw

    an

    Mala

    ysia

    India

    Thail

    and

    China

    Bang

    lades

    h

    Kore

    a

    Philip

    pines

    Viet

    nam

    Japa

    n

    Incentive Effec

    Complexity

    Positive

    Negative

    23 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Source: Global Competitiveness Report 2004

    Context for

    Context for Labor Market Regulation

  • 8/4/2019 Porter in Vn

    24/34

    Co te t oFirm Strategyand Rivalry

    Firm Strategyand Rivalry

    Labor Market RegulationSelected Asian Countries

    24 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Stringency of Labor Market

    Regulation*, (0-100)

    Note: Average of values for hiring, firing, and employment condition regulationsSource: World Bank (2005)

    0

    10

    20

    30

    40

    50

    60

    70

    Singapo

    re

    Malay

    sia

    HongK

    ong

    Jap

    an

    Chin

    a

    Bangla

    desh

    India

    Korea,

    Rep.

    Cambod

    ia

    L

    aos

    Vietna

    m

    Indones

    ia

    Taiw

    an

    Philipp

    ines

    Thaila

    nd

    Restrictive

    Liberal

    OECD

    Demand

    Demand Demand Conditions

  • 8/4/2019 Porter in Vn

    25/34

    DemandConditions

    DemandConditions

    Demand ConditionsVietnams Relative Position

    Competitive DisadvantagesRelative to GDP per Capita

    Competitive AdvantagesRelative to GDP per Capita

    Country Ranking, Arrowsindicate a change of 5 or more

    ranks since 1998

    Stringency of environmental regulations 89

    Laws relating to ICT 85

    Presence of demanding regulatory 79

    standards

    Government procurement of advanced 32technology products

    Sophistication of local buyers' products 51

    and processesBuyer sophistication 60

    Country Ranking, Arrowsindicate a change of 5 or more

    ranks since 1998

    25 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capitaSource: Global Competitiveness Report 2004-2005

    Related and Supporting IndustriesRelated and

    Related andS ti

  • 8/4/2019 Porter in Vn

    26/34

    Related and Supporting IndustriesVietnams Relative Position

    Competitive DisadvantagesRelative to GDP per Capita

    Competitive AdvantagesRelative to GDP per Capita

    SupportingIndustries

    SupportingIndustries

    Local availability of process machinery 63

    Country Ranking, Arrows

    indicate a change of 5 or moreranks since 1998

    Country Ranking, Arrows

    indicate a change of 5 or moreranks since 1998

    State of cluster development 80

    Local availability of specialized research 75and training services

    Local availability of components and parts 69

    Extent of collaboration among clusters 68

    Local supplier quantity 67

    26 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Note: Rank versus 93 countries; overall, Vietnam ranks 73rd in Business Competitiveness and 83rd in 2003 PPP adjusted GDP per capitaSource: Global Competitiveness Report 2004-2005

    Vietnams Goods Export PortfolioExports by Cluster 1997 2002

  • 8/4/2019 Porter in Vn

    27/34

    Exports by Cluster, 1997-2002

    0.00%

    1.00%

    2.00%

    3.00%

    4.00%

    5.00%

    6.00%

    7.00%

    8.00%

    -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00%

    Change in Vietnam's World Export Share, 1997-2002

    Vietnams OverallWorld Export

    Share: 0.280%

    Average Change inVietnams Total WorldExport Share:+0.100%

    27 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    WorldExportShare,

    2002

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

    Exports of$500 million

    =

    Footwear

    Fishing and Fishing Products

    Apparel

    Furniture

    Vietnams Goods Export PortfolioExports by Cluster 1997-2002 (continued)

  • 8/4/2019 Porter in Vn

    28/34

    Exports by Cluster, 1997-2002 (continued)

    0.00%

    0.20%

    0.40%

    0.60%

    0.80%

    1.00%

    -0.15% -0.10% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30%

    Change in Vietnam's World Export Share, 1997-2002

    Vietnams OverallWorld Export

    Share: 0.280%

    Average Change inVietnams Total World

    Export Share:+0.100%

    Exports of$500 million

    =

    Oil and Gas Products

    Sporting, Recreational andChildrens Goods

    Leather and Related Products

    Building Fixtures and Equipment

    Coal and Briquettes

    Motor Driven Products

    Agricultural Products

    Lighting and Electrical Equipment

    Plastics

    Construction Materials

    WorldExportShare,

    2002

    28 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.pptSource: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.

    Communications Equipment

    Textiles

    Power Generation and Equipment

    Information Technology

    Processed Food

    Leading Vietnam Export Industries, 2002

  • 8/4/2019 Porter in Vn

    29/34

    Industry Cluster

    World

    ExportShare

    Change in

    Share1997-2002

    Export

    Value in$thousands

    1 Crude petroleum oils Oil and Gas Products 1.17% 1.03% 3,076,200$

    2 Miscellaneous footwear with leather soles Footwear 6.52% 2.28% 1,236,530$

    3 Crustaceans, mollusks, and aquatic invertebrates Fishing and Fishing Products 7.09% 3.53% 999,876$

    4 Other footwear, rubber plastics Footwear 17.04% 8.86% 822,703$

    5 Coffee, coffee substitute Agricultural Products 4.92% 3.39% 406,669$

    6 Gym, training shoes and the like rubber or plastics soles Footwear 19.24% 14.33% 318,736$7 Miscellaneous prepared or preserved fish, crustaceans and the like Fishing and Fishing Products 3.99% 0.85% 304,603$

    8 Mens or boys overcoats, outerwear and similar articles Apparel 7.21% 5.63% 299,509$

    9 Rice, milled or semi-milled Agricultural Products 8.26% 9.14% 285,029$

    10 Jerseys, pullovers, cardigans, waistcoats, knitted Apparel 1.36% 0.42% 276,026$

    11 Fish, fresh, chilled, or frozen Fishing and Fishing Products 1.29% 0.63% 272,800$

    12 Other wooden furniture Furniture 2.19% 0.74% 253,093$

    13 Other travel bags, sets Leather and Related Products 9.99% 9.67% 244,351$14 Fruit, nuts excluding oil nuts Agricultural Products 0.85% 0.23% 238,336$

    15 Womens or girls overcoats, other coats Apparel 5.55% 4.99% 234,641$

    16 Footwear, with textile uppers and rubber soles Footwear 13.32% 10.92% 227,098$

    17 Natural rubber, balata and similar natural gums Plastics 8.69% 1.43% 214,343$

    18 Mens or boys trousers, breeches and shorts Apparel 1.47% 0.61% 210,394$

    19 Insulted wire, cable and conductors Communications Equipment 0.64% 0.08% 210,329$

    20 Womens or girls trousers, breeches and shorts Apparel 1.20% 0.33% 178,695$21 Printed circuits Information Technology 1.30% 1.17% 172,631$

    22 Mens or boys shirts Apparel 2.27% 1.55% 168,757$

    23 Coal, not agglomerated Coal and Briquettes 0.83% 0.73% 168,194$

    24 Convertible seats and parts Building Fixtures and Equipment 0.68% 0.42% 167,583$

    25 Other garments, not knitted Apparel 2.74% 1.81% 136,924$

    29 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.pptSource: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.

    Leading Vietnam Export Industries, 2002 (continued)

  • 8/4/2019 Porter in Vn

    30/34

    Industry Cluster

    World

    ExportShare

    Change in

    Share1997-2002

    Export

    Value in$millions

    26 Other sports shoes with leather uppers Footwear 4.53% 1.90% 123,943$

    27 Spices Agricultural Products 4.28% 4.82% 105,836$

    28 Ornamental ceramic articles Furniture 7.12% 2.89% 98,323$

    29 Bicycles and other cycles, non-motorized Sporting, Recreational and Children's Goods 4.27% 0.39% 98,077$

    30 Brassieres, corsets, braces, suspenders, garters Apparel 2.15% 0.91% 88,453$

    31 Baskets, brooms, brushes, paint rollers and mops Building Fixtures and Equipment 2.34% 1.14% 82,093$32 Children's toys Sporting, Recreational and Children's Goods 0.71% 0.33% 79,772$

    33 Womens or girls suits, dresses, skirts, trousers, knitted Apparel 1.27% 0.34% 79,439$

    34 Other sports shoes with rubber, plastics uppers and soles Footwear 5.04% 8.64% 76,009$

    35 Mens or boys shirts, knitted Apparel 2.32% 1.20% 71,320$

    36 Garments made of felt, miscellaneous nonwoven or coated fabrics Apparel 2.05% 1.03% 65,119$

    37 Parts for telecommunication equipment Communications Equipment 0.10% 0.04% 61,402$

    38 Fans, cooker hoods with fan Motor Driven Products 1.33% 0.00% 61,047$39 Oxygen-function amino-compounds Chemical Products 0.99% 0.76% 58,318$

    40 T-shirts, other vests, knitted Apparel 0.39% 0.28% 55,028$

    41 Household linens Textiles 0.73% 0.90% 54,577$

    42 Electric motors

  • 8/4/2019 Porter in Vn

    31/34

    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 vibrantdomestic 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

    31 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Institute for Strategy and CompetitivenessIntellectual Agenda

  • 8/4/2019 Porter in Vn

    32/34

    Intellectual Agenda

    Competition andSociety

    Competition andFirm Strategy

    Competition andEconomic Development

    CompetitionCompetitionCompetition

    32 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Institute for Strategy and Competitiveness

  • 8/4/2019 Porter in Vn

    33/34

    Institute for Strategy and CompetitivenessStrategic Pillars

    Research and

    Publications

    Research andResearch and

    PublicationsPublications

    CompetitivenessInformation

    CompetitivenessCompetitivenessInformationInformation

    Course Platform(MOC)

    Course PlatformCourse Platform(MOC)(MOC)

    Institution BuildingInstitution BuildingInstitution Building

    33 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt

    Potential Resources for Vietnam

  • 8/4/2019 Porter in Vn

    34/34

    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

    34 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.ppt