Economic clusters and interdependence in logistics

By Tu Tam|21/03/2023 08:54

According to the Fulbright Economics Teaching Program on “Local and Regional Development”, the term “cluster” is “the geographical concentration of businesses, suppliers, and related businesses” as well as that of companies in related industries and supporting institutions (for example, universities, standards bureaus, trade associations, etc.) working together”.

They also provide criteria of competition abilities of each company/ industrial sector that depend a lot on the “ecosystem” or cluster- in which the company and sector exists. Clusters are linked by reciprocity and are resonated by positive spillovers.

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According to Fulbright, cluster is an important factor to improve competition abilities. It will also promote productivity and efficiency because it provides access to specialized information, services and materials; it also helps speed up and reduce coordination and transaction costs, increase abilities to spread good practice, competitions. In term of promoting innovation, it helps improve abilities of identifying opportunities for technological innovation and of reducing costs and risks of testing new technologies. In term of promoting commercialization, it creates opportunities to develop new products and/ or new businesses, reduces costs and speed up commercialization. These are also the values that are brought by logistics.

In fact, although the process of restructuring economic sectors in Vietnam has achieved certain results, there are still limitations such as the slow progress of the restructuring process in some sectors, objectives and requirements have not yet been met, and growths in sectors have not reached the set targets and are not very stable...

The results are shown in promotion of linkages by sectors, regions and economic clusters; the sector structure is implemented in a positive direction, increasing contribution proportion of the processing industry, manufacturing, markets, and diversified export products... However, upgrading and applying technological achievements innovation is not high and lack of initiative; a dynamic economy has not yet been formed, there has been no significant change in restructuring of economic sectors. In term of export, few new products and new industries are formed.

Among the shortcomings, especially, linkages with developed countries and economic clusters have not been strong enough. Labor productivity has not been significantly improved. Independence and resilience of many sectors have still been low, markets have not been diversified, there is a lack of systematic linkage, and it heavily depends on fluctuations in world market supply and demands, price fluctuations...

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According to experts of the economic cluster, structuring industrial sectors in the direction of improving connectivity and clustering has been still limited: industrial parks and economic zones mainly have multi-field development and have not yet formed core actors for cluster development such as large-scale projects, strategic foreign investment partners... Therefore, relationship linkages among enterprises in these places have not been well developed. In addition, the current situation of spatial distribution of industries has not yet fully exploited the advantages and geographical position and potential of localities; industry linkage chains have not yet been formed.

Planning of industrial parks and industrial clusters has not been really associated with specialized industrial clusters, and substantively specialized industrial complexes have not been built in industrial concentration zones; the ecosystem has not yet been created, including end product manufacturing enterprises, supply enterprises, component suppliers, consulting service providers, finance, science and technology.

In a report conducted by the Central Economic Commission and the World Bank, leading provinces in terms of employment in the transport and logistics cluster include HCMC, Hanoi, Hai Phong, Binh Duong and Dong Nai. Among them, Binh Duong and Dong Nai have a weak degree of cluster specialization (LQ<1).

The localities participating in transport and logistics cluster are distributed throughout the country, of which the provinces in the group of 10% highly specialized are HCMC, Hanoi, Hai Phong, Da Nang, Binh Dinh and provinces in the 25% highly specialized group, include Quang Ninh, Ba Ria - Vung Tau... Thus, the transport and logistics cluster is still one “bottlenecks” make the growth unstable.

In the current new conditions, according to experts, in order to strengthen economic linkages by sectors and improve the efficiency of clusters, it is necessary to have appropriate and effective regulation of flows of economic resources. Selection and pilot development of a number of cluster models in the economic restructuring process. For reorganizing of production along the value chain to innovate, first of all, it is necessary to specify what the cause of the loose economic linkage by industries and regions is. Is the laxity in the mindset of “doing each own parts” or due to planning and investment resources?

In 2022, one of the “marks” when the Politburo considered and issued new resolutions on socio- economic development, national defense and security assurance in all six socio-economic regions of the country. The Government then issued an Action Plan to implement these resolutions.

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In fact, for a long time, Vietnam has been interested in regional planning, not only provinces, but also districts have industrial zone planning... However, capacity to implement economic clusters only stops on ideas and planning, not succeeding in practice. The reason is that the new “economic cluster” is the result of voluntariness, partly expressing the “syndrome” mentality, which has not been designed with “value chain” thinking, following the movement of the economic market.

In the current new conditions, in order to strengthen economic linkage by sectors, regions and improve the resilience of the economy, it is necessary to have appropriate and effective regulation for flows of economic resources. Selection and pilot development of a number of cluster models in the economic restructuring process; searching and expanding markets for development of economic clusters; reorganizing production along value chains, developing clusters of association - processing - consumption of agricultural products in localities and regions with high production capacity and large amount of agricultural products... These are also contents of the current economic restructuring process.

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