A recent globalisation report published by Ernst&Young and the UK Economist Intelligence Unit ranked Viet Nam 34 out of 60 countries in terms of globalisation. Lou Pagnutti, the Asia-Pacific area managing partner for Ernst&Young, spoke with Viet Nam News about globalisation and the upcoming Ernst&Young Entrepreneur Of The Year awards.
How does Ernst&Young measure globalisation?
Globalisation is happening worldwide. What we are seeing now is that countries in different places have different approaches to globalisation. There are some countries that have closed economies such as Iran, which are not open to investment from the outside. They have closed their borders, and therefore have a low ranking in the globalisation index.
Then there are countries such as Singapore, which are dependent on global trade. They therefore have a high rate. The trend in Viet Nam is very positive in terms of globalisation. The country now ranks 34 out of 60 in the globalisation index. This is a very positive trend which we think will bring about many good things for the Vietnamese economy.
Of what benefit to Vietnamese firms is a high globalisation ranking?
Well, globalisation is good for the Asia region. It brings a lot of opportunities but also some challenges. The Asia region is very attractive for foreign investment thanks to it richness in natural resources, human resources and other things.
For example, Vietnamese companies have performed positively in recent years. It's also good that China has such a large population. These things are attractive for foreign firms and draw in investment.
What should firms do to make the most of globalisation?
In term of taking advantage of the opportunities presented, it is very important that a company retains its own characteristics while becoming global.
Firms must also heed market regulators and economic governors. They must also focus on innovation and strong management.
It is also vital the company concentrates on developing a strong trademark domestically before going global. Companies, which we refer to as emerging heroes, performed very well through the recession. What they did was develop a strong and successful business locally. They knew their customers. They were also innovative and had good relations with regulators and the Government.
Viet Nam is currently focusing on developing its domestic markets. Will that help boost its globalisation index?
Well, the globalisation trend for Viet Nam is positive. In my opinion, focusing on the domestic market is critical. It is vitally important local companies boost their competitiveness and build a strong brand name.
Whether or not Viet Nam's globalisation index climbs depends on how much the economy opens.
Firms from 50 countries can enter the Ernst&Young Entrepreneur Of The Year awards programme. Viet Nam joined the programme this year. What do the awards represent?
The Entrepreneur Of The Year programme is designed to honour entrepreneurs who develop a successful business, create jobs and build a strong business environment. The awards are globally recognised.
By encouraging overseas entrepreneurs to invest in the country, the nation's economy will benefit.
Viet Nam is an attractive emerging market. As your country industrialises up to 2020, entrepreneurship will be a vital factor. That is why we have invited Viet Nam to join this year. — VNS