Nguyen Hoa Cuong, deputy director of the  Enterprise Development Department under the Ministry of Planning and Investment, made this remark at a seminar themed “Digitising the Vietnamese Economy: Empowering SMEs for the Global Market” held in Hanoi on April 18.

The event, organised by the US-ASEAN Business Council (US-ABC) and the Vietnam Chamber of Commerce and Industry (VCCI), attracted 180 SMEs operating in many business sectors. They heard experts from multinational companies discussing new policies, experiences, tools and solutions to enhance SMEs’ capacity in exploiting the potential of the growing digital economy, so that they can participate more effectively in the global supply chain.

Sunil Singh, Chief Information Officer of the Coca-Cola Company Bottling Investments Group, said businesses could not develop without innovation, adding that Coca-Cola was devoting one-third of its capital to tech-driven innovation, with a focus on automation, digitisation and artificial intelligence.

“If firms don’t apply automation, digitisation to their business models, they will have a hard time competing with their rivals and will soon be eliminated from the market," said Singh, adding that digital transformation was a strategic priority.

Regarding supply chain management, Frank Weiand, General Director of Supply Chain Services International, said the supply chain cost in Vietnam accounted for 20 percent of GDP and may grow to 25 percent in the next coming years, much higher compared to Laos, Thailand and China. “If businesses reduce about 10 percent of the supply chain cost, they can save 1.5 to 2 percent of GDP,” Weiand said.

He added that production costs of Vietnamese enterprises were 20 percent higher than those of neighbouring countries, such as Thailand and China, because Vietnamese enterprises were not yet well integrated in the international supply chain in terms of procurement, operations and sales. They were also behind in the application of international standards to improve quality and production capability, and were disadvantaged due to the delayed implementation of the ASEAN economic blueprint.

Improvement of quality management systems and manufacturing processes can increase efficiency by up to 40 percent and reduce costs. Optimisation of procurement processes offers cost reduction potentials of over 20 percent, Weiand said.

During the seminar, representatives from Microsoft, MasterCard and other companies also shared their experiences in fields such as cloud technology, digital payment and business regulation.