porter in vn
TRANSCRIPT
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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/ -
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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-$,
2003
Source: EIU (2004)
Vietnam
Japan
Thailand
S Korea
Indonesia
Malaysia
LaosPhilippines
Taiwan
Bangladesh
China
Hong Kong SAR
India
Myanmar
Singapore
Cambodia
Estonia
Latvia
Slovenia
Slovak Republic
RussiaMexico
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Comparative Labor Productivity Performance
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
-20% -10% 0% 10% 20% 30%
Compound annual growth rate (CAGR) of real GDP per employee, 1998-2003
GDP peremployee
(PPPadjusted)
in US-$,2003
Source: EIU (2004)
Vietnam
Japan
Thailand
S Korea
Indonesia
MalaysiaPhilippines
Taiwan
Bangladesh
China
Hong Kong SAR
India
Singapore
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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)
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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
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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
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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
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-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
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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
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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
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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
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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
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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
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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
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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)
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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$500 million
=
Oil and Gas Products
Sporting, Recreational andChildrens Goods
Leather and Related Products
Building Fixtures and Equipment
Coal and Briquettes
Motor Driven Products
Agricultural Products
Lighting and Electrical Equipment
Plastics
Construction Materials
WorldExportShare,
2002
28 Copyright 2005 Professor Michael E. Porter200506 GCR Vietnam KC 2005.06.24.pptSource: Prof. Michael E. Porter, International Cluster Competitiveness Project; UN Comtrade.
Communications Equipment
Textiles
Power Generation and Equipment
Information Technology
Processed Food
Leading Vietnam Export Industries, 2002
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Industry Cluster
World
ExportShare
Change in
Share1997-2002
Export
Value in$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)
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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
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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
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Intellectual Agenda
Competition andSociety
Competition andFirm Strategy
Competition andEconomic Development
CompetitionCompetitionCompetition
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Institute for Strategy and Competitiveness
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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
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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