VietNamNet Bridge - The technologies utilized by Vietnamese enterprises are 30 years behind the world and years behind other regional countries, according to Minister of Science and Technology Nguyen Quan.

Quan said at a workshop held in HCM City in late August that a technology life cycle lasts about 10 years. With such development, Vietnam’s technology is 2-3 generations behind the times. 

“Vietnamese manufacturers try to import old machines to save money. However, if Vietnamese enterprises still maintain the current production organization and equipment, their products will be uncompetitive when Vietnam joins TPP (Trans Pacific Partnership) agreement,” Quan warned.

“There is no machine which can still run well after 20-30 years of operation and churn out the products which can compete with other products of the same kinds in the world,” he said.

“What to do to upgrade technologies and narrow the technological gap between Vietnam and the world, so that we are just 1-2-generation behind the times?” he said.

Quan said it was ‘better late than never’ to issue a warning about outdated technologies in Vietnam. The out-of-date technologies, weak competitiveness, bad management skills and low quality of the labor force all have led to pessimistic forecasts about Vietnam’s competitiveness during  global integration.

As Vietnam has signed and will sign many free trade agreements, it has to ‘play’ in accordance with the world’s rules, and will have to remove tariff barriers. By that time, if Vietnamese products are more expensive and have lower quality because they are made with outdated technologies, they will not sell well in the world market.

Officials from the Ministry of Science and Technology (MST) have repeatedly warned against the use of out-of-date technologies by Vietnamese enterprises at conferences and workshops.

At a workshop on product quality held in HCM City some months ago, representatives from the ministry urged manufacturers to renovate technologies, because this is the only solution to improve product competitiveness.

MST said 52 percent of equipment used in Vietnam is ‘out-of-date’ and ‘very backward’, while only 10 percent of equipment is modern and 38 percent is at ‘medium level'.

The proportion of ‘out-of-date’ and ‘very backward’ technologies used by small and medium enterprises is even higher, about 70 percent.

A survey conducted of 100 businesses in Hanoi and HCM City found that Vietnamese businesses spend 3 percent of their annual revenue on upgrading equipment and technologies. Most enterprises use the technologies of 1980s. 

The Central Institute of Economic Management (CIEM) and Copenhagen University, which have completed a survey on Vietnamese business competitiveness and technology, found that 23 percent of the capital used by small and private businesses to invest in technologies are from bank loans.

Dat Viet