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Boost productivity for Industry 4.0

Update: September, 18/2017 - 09:00

Nguyễn Anh Tuấn, head of Việt Nam’s National Productivity Institute, tells the Kinh tế & Đô Thị (Economic & Urban Affairs) newspaper that business managers should play a leading role in increasing labour productivity.

A recent study by the Việt Nam National Productivity Institute shows that the growth rate of Việt Nam’s labour productivity in the 2004-15 period is lower than the average increase of the minimum wage, which are 4.4 per cent and 5.8 per cent, respectively. Why the big gap?

The key problem is that our labour productivity is too low. Labourers are partly to blame but business managers bear the main responsibility because they have not paid due attention to improving labour productivity. Although businesses don’t want to increase wages, in the long term this is an impetus for effective use of labourers and productivity increase. Instead of debating how much the wage should be increased, businesses and labourers should sit together and discuss the main target, which is increasing productivity and income.

How does Việt Nam’s labour productivity compare to other countries in the region?

Việt Nam’s labour productivity is very low compared to high-productivity countries like Singapore, Japan and South Korea. The gap is about 10-15 times. Even compared to countries in the region like the Philippines, Thailand and Indonesia, the situation is worrying. Meanwhile, compared to Laos, Cambodia and Myanmar which had lower productivity than us, the gap is being narrowed. The issue of labour productivity has been put on the table many times, but so far, the solution have not been sufficiently effective.

The era of Industrial Revolution 4.0 revolves around investment in automation and robots. What do you think about that?

Investing in robots is costly, and it remain to be see whether it is effective. While robots can do some kinds of jobs, there are also jobs that should be done by humans. In Việt Nam’s case, we still have to ensure jobs for labourers while improving productivity. It would be meaningless if productivity improvement results in more unemployment. I think we should not be hasty in carrying out the Industrial Revolution 4.0.

What should be the solutions to increase labour productivity for small- and medium-sized enterprises?

For small- and medium-sized enterprises, the first thing is to reshuffle production organisation, which is very weak in many businesses. Second, they should focus on research activities and get rid of ineffective technology to renovate production processes, and select high-value products. Without due attention and investment, there will not be significant progress. — VNS

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