Strategy for Private Economic Development in the New Context

The Communist Party and the government have emphasized the role of the private sector in the national economy and committed to creating more favorable conditions for its growth. However, the implementation of support strategies still requires consistency, coordination, and long-term vision to maximize the sector’s potential.

The Current State of the Private Economy

In recent years, Vietnam’s private economy has grown significantly, contributing 42-45% of GDP and generating over 85% of jobs in the economy. According to the General Statistics Office, the number of newly established private enterprises has continued to increase in 2024, reflecting the sector’s dynamism.

However, the private economy has yet to reach its full potential. Most businesses remain small and medium-sized, face limited access to capital, use outdated technology, and have low labor productivity. Additionally, many enterprises struggle with administrative barriers, legal complexities, and a lack of business transparency.

Factors Influencing the Private Economic Development Strategy

The strategy for private economic development cannot be separated from global economic and political changes and Vietnam’s unique economic conditions. Several key factors influencing this strategy include:

Global Economic Trends
In recent years, the world economy has witnessed high inflation, monetary tightening by major economies, and shifts in global supply chains. These factors pose significant challenges for private enterprises, particularly export-oriented businesses, as rising production costs and shrinking consumer markets increase competitive pressure.

Furthermore, rapid technological advancements and digital transformation are reshaping business operations. Traditional business models are becoming obsolete, requiring private enterprises to swiftly adapt to emerging trends like digital transformation, e-commerce, and artificial intelligence.

Domestic Business Environment
While Vietnam has made significant improvements in the business environment, a World Bank (WB) report highlights the need for further administrative reforms, reductions in unnecessary business conditions, and the establishment of a fair playing field between state-owned enterprises, FDI enterprises, and private businesses.

Changes in Government Policies and Development Directions
Given the new economic landscape, the Vietnamese government is shifting its policies toward enhancing administrative efficiency, improving market access, and supporting digital transformation for businesses. These policy adjustments are expected to create better opportunities for private enterprises to expand and strengthen their competitiveness.

Strategic Directions and Solutions

To ensure sustainable development in the new context, the private economy needs a comprehensive strategy focusing on the following areas:

Enhancing the Legal Framework and Business Environment
The government must continue institutional reforms to create a transparent, fair, and business-friendly environment for private enterprises. This includes simplifying administrative procedures, strengthening legal protections for businesses, and ensuring fair competition.

Improving Access to Capital and Financial Resources
Financial policies should support private enterprises—especially SMEs—through initiatives such as credit guarantee funds, preferential loan programs, and the development of capital markets. Encouraging private enterprises to access non-bank financial instruments, including the stock market, will diversify funding options.

Accelerating Digital Transformation and Enhancing Labor Productivity
Digital transformation is no longer optional—it is essential for survival and growth. The government should introduce technology adoption programs, invest in digital infrastructure, and promote digital workforce training to help businesses increase efficiency and compete globally.

Additionally, private enterprises must actively invest in research and development (R&D), innovation, and modern business models to enhance productivity and competitiveness.

Supporting Private Enterprises in Global Value Chains
Another critical strategy is integrating Vietnamese private enterprises into global value chains. This can be achieved by strengthening partnerships with foreign companies, improving product quality, and meeting international standards. Such efforts will not only expand markets but also provide access to advanced technology and global best practices.

Conclusion

With strong policy support from the government and proactive efforts from the business community, Vietnam’s private economy can become a pillar of economic growth, contributing to sustainable development and deeper international integration.