Businesses seek to grasp green transition opportunities

The national socio-economic development strategy for the 2020 - 2030 period has identified three strategic breakthroughs for the nation, including socialist-oriented market economic institutions, human resources, and infrastructure. It has set out a major orientation aimed at innovating thinking and action, proactively grasping and effectively taking advantage of Industry 4.0 alongside comprehensive and extensive international integration to restructure the economy and develop the green economy, the digital economy, and digital society.

According to analysis by experts, the country’s awareness of green transition is increasing, from ideas to specific actions. Many domestic enterprises have proactively innovated and promoted in-depth model transformation, associated with both sustainable and environmentally friendly development.

Nguyen Doan Ket, deputy general director of Rang Dong Light Source and Vacuum Flask Joint Stock Company, says that during the development process, the firm always focuses on investing in modern machinery and equipment for the purpose of rapid and sustainable development. So far, 72% of its production lines have become automatic.

“Currently we are using closed electric furnaces that have no dust, no chimney, and no CO2 or SO2 emissions, with energy used very efficiently. Thanks to digital technology, our production system goes green,” shares Ket.

Ket notes that, “Rang Dong’s robot system is very special. We have to buy and integrate each module into the smart production system. Therefore, we can improve the efficiency of energy use and natural resource use.”

Despite recording these initial positive results, there remain problems regarding the development of the green economy that must be addressed. In particular, the biggest difficulty is that resources are limited. Currently, introduced mechanisms and policies have yet to encourage economic sectors to invest more in the green transition and sustainable development process. Indeed, information technology infrastructure has yet to be complete, while human resources for new technology has yet to meet development requirements.

Furthermore, as most local businesses are small and medium-sized, technology investment faces many difficulties. One of those difficulties is that green finance for the cause of development investment remains limited, whilst it is also a time-consuming problem to resolve.

“The key factor is to stabilize the economy and improve the business environment, to remove business barriers in various fields. And then there are selective support solutions for some industries. We have introduced many policies, but paradoxically they prove to be ineffective when they are implemented in reality,” says Dr. Dang The Anh, deputy director of the Central Institute for Economic Management Research.

Vietnam has no choice but to maintain its high and continuous levels of growth over the coming decades in order to achieve the goal of becoming a developing, modern industrial, high-middle-income economy by 2030 and a developed, high-income economy by 2045. In the context that space for growth is traditionally based on expanding the scale of cheap labour and capital, whilst increasing the exploitation of natural resources has become limited, labour productivity is the deciding factor in the competitiveness of the economy, as well as for each locality and the business sector.

“We are in dire need of big investment in science and technology, especially technological innovation to not only help policies be implemented in accordance with reality, but also create conditions for businesses to proactively innovate their technology. Businesses play their central role, but they need support of the community, research institutes and universities, policy makers, as well as capital sources,” explains Chu Duc Hoang, chief of the office of the National Technology Innovation Fund, under the Ministry of Science and Technology.

The main barriers faced by enterprises in converting production models from ‘brown’ to ‘green’ include limited technology investment, poor management, and an unqualified workforce. During the transition process, businesses’ efforts are important, but support policies for these firms also needs to be clear and transparent, with businesses taking centre stage. Practical and effective business support will therefore contribute to restructuring the economy, improving economic competitiveness and helping Vietnam keep up with other regionals countries.

“Currently, Vietnam’s green classification criteria are in harmony with European standards and the World Bank, as well as other climate finance organisations. This means that if a business meets local green criteria then it will also meet the green criteria of financial institutions around the world. This therefore represents an opportunity for businesses to access global green finance,” comments Assoc. Prof. & Dr. Nguyen Dinh Tho, director of the Institute of Strategy and Policy on Natural Resources and Environment.

Experts also believe that the digital economy and green economy will help Vietnam to swiftly become a developed, high-income country by 2045. To seize the opportunities, the country needs to have a national strategy on green transition with specific and synchronised goals and roadmaps. In the context of global economic integration, Vietnamese businesses are facing many challenges in meeting strict requirements for green and sustainable development from investors, partners, and international markets and consumers. Firms are therefore required to innovate thinking and invest in technology in production and business to improve competitiveness. The slower the green transition takes place, then the more opportunities firms will lose to increase their exports.