Việt Nam has about 5 million business households that have not become enterprises.

Last year was considered a milestone for start-ups, with 110,000 newly-established enterprises. It is hoped that this surge would promote the development of enterprises, to reach a target of 1 million enterprises with efficient operations by 2020.

Vũ Tiến Lộc, chairman of Việt Nam Chamber of Commerce and Industry spoke to Voice of Vietnam (VOV) about this issue, and the conversion of 5 million business households to enterprises to reach the target  in 2020.

How do you feel about startup activities last year, especially young people entering the world of business for the first time?

Last year was the year of start-ups. Start-ups were helped by the Resolution of the 12^th National Congress of the Communist Party of Việt Nam and Resolution 35 on development of enterprises, as well as positive operation by the new Government. The Government considers serving the people and enterprises as one of its major tasks.

2016 was the first year that Việt Nam had 110,000 newly-established enterprises of high quality. Those contributed to increasing the overall number of enterprises, developing the economy and creating more jobs.

Additionally, the establishment of new enterprises created a start-up movement. Many students took the opportunity to establish businesses in the information technology industry.

Last year, start-up programmes received support from government offices and local authorities, as well as political and social organizations.

What are some lessons to take from startup activities last year, to continue global integration?

Firstly, promoting the strong development of the start-up movement on the basis of creativity in the business environment, as well as the quality of human resources and infrastructure is very important.

However, Việt Nam’s standards for human resources lag behind global and ASEAN standards because teaching at universities and colleges, as well as vocational training schools, especially vocational training systems, are still limited and have not reached international standards. So enterprises struggled to find qualified staff that are suitable to their demands. The staff have poor knowledge and few practical skills.

Meanwhile, training facilities have trained workers in skills that are unnecessary. So, reforming training facilities to ensure quality human resources that meet enterprises’ demand is very important at present.

Building the infrastructure for enterprise development is also an urgent task. For local enterprises to receive sufficient support, the nation has to reform its business environment, increase the quality of human resources and upgrade its infrastructure to international and regional standards.

What are some solutions to develop the start-up movement further, towards reaching 1 million enterprises by 2020?

To reach 1 million enterprises in 2020, Việt Nam must partly improve its business environment and also provide some specific solutions.

Of which, a programme on converting business households to enterprises must be a core solution, because Việt Nam has 5 million business households at present.

To implement the conversion, the state must simplify administrative procedures for establishing and operating enterprises, especially micro- and small-sized enterprises. The state should have support procedures for tax and credit.

At present, ministries and sectors have combined to build the programme. I think the programme would be a decisive task to help the nation reach 1 million enterprises in 2020.

However, it is more important to ensure the efficient operation of converted business households to enterprises. Reform of the business environment and the promotion of combining enterprises would provide support for the development of those enterprises.

At present, small- and medium-sized enterprises can survive and develop with cooperation. Specifically, they must combine with foreign investment firms to join the global value chain. The state should have policies to encourage this combination. — VNS