(VEN) - According to Professor Michael E. Porter from the Harvard Business School, an industrial cluster is a geographical meeting point of companies that have linkages, specialized producers, service providers, companies from sectors relating with each other and institutions that have linkages (such as universities, standard and quality control organizations and business associations), which all compete but work with each other.
Industrial cluster - an indispensable trend
Associate Professor, Dr. Le Xuan Ba, the director of the Central Institute of Economic Management (CIEM) said that Vietnam currently has 18 coastal economic zones, 28 border economic zones, 267 central industrial zones and many industrial zones for small to medium-sized businesses. Here in Vietnam, industrial zones have been making an important contribution to economic growth as well as modernization and industrialization.
However, these industrial zones are still operating individually and almost have no linkage. Their modest efficiency is partially attributed to this. The absence of connectivity between industrial zones is a reason of the low development level of support industries in Vietnam. In Vietnam, industrial clusters' important role in economic development is not yet thoroughly acknowledged, and it seems that one mistakes industrial zones for industrial clusters. Vietnam hasn't had a legal framework for industrial clusters, while the legal framework for industrial zones and support industries is fledgling and inadequate.
According to many studies of foreign economies, efficient construction and development of industrial clusters and combining industrial clusters with support industries are important to increase national and business competitiveness and minimize macroeconomic instability. Foreign experiences show that industrial cluster development can help improve technological level, increase competitiveness, develop and transform local economic structures, speed up industrialization and create more jobs. There have been more than 2,500 initiatives for development of industrial clusters in 75 countries at different levels.
Industrial cluster development pertaining to support industries in Vietnam is necessary as the country's economic growth still relies on increases in investment capital, low labor cost, and production and export of raw materials and semi-finished products that have a low added value.
Industrial cluster helping support industry development
Industrial cluster development not only yields economic benefit but also helps development of support industries - something in which the Vietnamese Government and other relevant authorities are highly interested. The Prime Minister recently released Decision 12/2011/QD-TTg on developing support industries.
Dr. Tran Kim Hao from CIEM said that an industrial cluster is usually made up of businesses from some fields that have rather close relation so support industries' development could be influenced by industrial cluster development. Industrial clusters create a large amount of products while creating jobs, attracting foreign investment and paving the way for domestic businesses to develop support industries. Small to medium-sized businesses operating in support industries would have many more opportunities to access sources of investment capital and approach markets and advanced technology, which are all integral for development of support industries.
Having acknowledged of industrial cluster's importance, the Prime Minister issued Decision 1914/QD-TTg dated October 19, 2010 approving a project for improving the economy's growth, efficiency and competitiveness and told CIEM to implement the plan for development of industrial zones and support industries, creating production connectivity and forming value chains. The plan is expected to be submitted to the Government in December 2011./.
Source: Vietnam Economic News
