The Politburo of the Communist Party of Vietnam on Monday issued Resolution No. 68-NQ/TW on developing the private economy, outlining strategic directions, goals, and breakthrough solutions to maximise its role as the 'key driver' and 'pioneering force' of the economy. Việt Nam News reporter Mai Hương spoke with Phí Vĩnh Tường, deputy director of the Institute of Vietnam and World Economy, about the sector’s development.

Many people talk about 'pioneer enterprises'. In your view, what defines such businesses and how can we replicate their success across the broader economy?

Pioneer enterprises often share two key characteristics.

First, they are technology-based. In many countries, tech companies are seen as the core drivers of innovation and growth. These firms lead the way because they can create breakthroughs and set new trends.

Second, they have the power to reshape entire sectors. When a business transforms its industry into a new growth engine, it becomes a pioneer. VinFast is a good example. Though it started by relying on foreign technology, it gradually took control – especially in strategy and branding. Its bold move into electric vehicles, aligned with global green trends, shows what a pioneer can look like.

But can the pioneer model be scaled up?

It’s difficult. Both internal and external factors are at play.

Internally, leadership is crucial. A pioneer mindset means more than running a business – it requires long-term vision, risk-taking and innovation. Such leaders are rare and without them, the model can’t be replicated.

But it’s not impossible. If the Government wants to promote pioneers, it must create the right environment. That includes sound institutions, clear policies, and meaningful support so entrepreneurs can thrive. General Secretary Tô Lâm has highlighted how important a strong institutional framework is for private sector growth. That’s the external factor we must improve.

As for the Government’s role, it should implement targeted reforms. One international lesson – seen in Japan – is 'picking winners'. But to do this well, the State and private sector must jointly identify industries with future growth potential. While the market leads, the State can guide based on tech forecasts and global trends.

Economic growth is always about shifting structures. New sectors replace outdated ones. Choosing the right industries and firms can create breakthroughs. But choosing wrong – like some of Việt Nam’s past 'economic champions' – can lead to major resource waste.

Over 98 per cent of businesses in Việt Nam are small or micro. Fewer than two per cent are large, and even those are spread thin across sectors. So, 'picking winners' must consider our real context. In some sectors, only one firm may be capable – supporting it might be the only viable path.

Ultimately, the key isn’t how much the State spends, but whether the outcomes justify the investment. Building an environment where promising businesses can become pioneers is a strategic task. It requires strong coordination between public and private sectors, between policy and practice.

What key conditions does Việt Nam need to foster the growth of private enterprises, from pioneers to 'leaders', driving the market and creating a ripple effect?

There are two clear development paths for businesses worldwide.

The first model is from Japan, where pioneering enterprises are supported to become 'leaders', creating a ripple effect throughout the economy. The key to this model is building a strong business ecosystem. Japan has long advised Việt Nam on developing the supporting industries sector, structured with layers of businesses: small and medium-sized enterprises (SMEs) connected to larger, leading companies.

This system works like a flock of cranes, with the leading enterprise transferring knowledge, technology and experience to those behind it. Through close collaboration, businesses help drive economic sectors forward, boosting the position of the pioneers, and contributing to sustainable development.

However, in today’s context, with the Fourth Industrial Revolution underway, a new trend is emerging. This is the rise of small, independent, and flexible technology-based enterprises. These companies don't need to become large or leading but can still grow significantly, tap into niche markets and create quality jobs that offer good wages.

We can think of them as 'tiny giants' – small yet powerful companies that innovate, develop technologies and stand strong independently. They don't need to be part of a large ecosystem but still contribute to growth and employment.

Currently, the government's goal is not just to reach one million businesses, but to aim for two million. Therefore, alongside developing leaders to drive key sectors, we must also encourage and support the growth of small tech-driven enterprises.

The Vietnamese Government has recognised private enterprises as a growth driver and introduced policies to boost their role in large infrastructure projects. What more is needed to strengthen public-private partnerships (PPP)?

The Vietnamese Government is committed to enhancing the private sector’s role, especially in infrastructure. Việt Nam’s participation in new-generation FTAs also opens opportunities for private companies to bid on public service contracts in infrastructure.

However, the State cannot handle all infrastructure investments alone. For example, the railway sector requires substantial investment, but efficient operation is key. The private sector must be involved, with Japan’s Shinkansen model serving as a reference. Việt Nam can adapt this approach for East-West railway connections.

To make this work, Việt Nam needs to review its legal framework. Overlapping laws, like the Public Investment Law and the PPP Law, create obstacles. These need to be addressed quickly.

Another issue is capital. Private companies need access to long-term, low-interest funding. Clear risk-sharing mechanisms between the Government and businesses are essential, especially for projects that are socially important but financially unfeasible.

Mindset changes are also needed. Some infrastructure sectors, such as ports and airports, are off-limits to private enterprises due to dual-use concerns. A more flexible approach is necessary to avoid missing opportunities to mobilise social resources.

In terms of technology, the private sector must be encouraged to innovate. Not only will businesses benefit, but the country’s competitiveness will improve as well. Specific measures should be put in place to ensure companies can access and apply advanced technology.

For real change, Vietnamese companies must have the capacity to absorb technology. Additionally, FDI companies should have clear incentives to share and transfer technology. The government should invest in shared R&D centres and labs to support SMEs. This will allow them to innovate and collaborate with research institutes to address practical challenges.

How adaptable are private enterprises in Việt Nam to global challenges and what should be done to keep them competitive?

Currently, two major issues are prominent.

The first challenge is competition among major nations, which risks disrupting supply chains. This creates both challenges and opportunities for Việt Nam, allowing it to join supply chains led by China or other regional powers. However, businesses must improve their technological capacity to participate.

The second issue is the ongoing Industrial Revolution. As global companies rapidly adopt technology, supply chains could shorten significantly. For example, a 3D printer can replace the entire process from raw materials to production. Businesses must develop real technological capability, not rely on traditional models.

I am confident that Vietnamese businesses are highly adaptable.

Over the past 40 years, especially during the early years of integration, they leveraged internal strengths and technology to overcome challenges. However, after 35 years of integration, the Government's role in creating a favourable business environment has become crucial. By continuing to improve the business climate, the government can provide businesses with more growth opportunities, helping achieve the eight per cent growth target this year and double-digit growth in the future.

I expect the private sector structure to change in the next five years. Currently, 98 per cent of businesses are small or micro-enterprises, but with policies like Resolution 57 and reforms in technology, infrastructure and institutions, this is set to shift.

The proportion of micro-enterprises will shrink, and medium-sized businesses will grow. This shift will make the 'flying cranes' model more effective. Currently, the low number of medium-sized businesses creates an imbalance, hindering connections between large and micro-enterprises. A change in business structure will lead to a more sustainable and efficient economy. — BIZHUB/VNS