CHAPTER IINTRODUCTIONDue to the important role of small and medium-sized enterprises, many countries have focused on encouraging this type of enterprise development. Institutional support nature to encourage include: Support to create a favorable business environment (development and promulgati on of the law on small and medium enterprises, to facilitate licensing, supply information , etc.), the business support capacity building (training resources management, technology support , etc.), and the support of credit (bank established professional for small and medium enterprise loans, credit guarantees for enterprises, the establishment of venture capital companies , etc.), and other support (such as business premises). According to the Vietnam Association of Small and Medium Enterprises (VINASME), up to 96% of registered enterprises in Vietnam are SMEs. This unit generated 40% of gross domestic product, generating more than 1 million new jobs each year, mainly beneficial especially for untrained labor. For many years, the volume of SMEs is still the engine that runs the economy of Vietnam. But have to admit the fact, this volume is also thrive in areas with modest margin, low technology so there is no advantage in size (financial resources, area of operation, market share, etc.) that often focus on issues such as selection of business objectives consistent with the ability, stability and consolidation of market share or develop gradually and selectively market stage, the
sudden most favorable break. SMEs still have the motor and the link to business
cooperation that lack of clarity of the role of state policy.
1.1. Background of the study
Small Business Development Plan and medium period 2011 - 2015 has been
approved by the Prime Minister, in which the goal of bringing the number of newly
established small and medium -sized enterprises in 2011-2015 is expected to 350,000
enterprises. Target set by the time on 31.12.2015, there were 600,000 active enterprises.
(http://baodientu.chinhphu.vn/Home/Ke-hoach-phat-trien-doanh-nghiep-nho-va
vua/20129/148542.vgp).
Small and medium-sized enterprises play an important role in socio-economic
development and active support for the development of big business, but they have certain
restrictions on capital, production technology, production ground... So, requiring solutions,
long-term policies to support enterprises to overcome difficulties and improve
competitiveness towards the goal of sustainable development.
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According to a survey of the Department of Business Development (Ministry of
Planning and Investment), officially recognized in 2001, by the end of June / 2012, the
country has 658,645 SMEs registered establishment, of which 468,023 enterprises activity
(about 71.1%). The number of SMEs in terms of the labor force each year by an average of
22.11% / year (if in 2000 more than 38,000 companies, 2010 was over 283,000).
In 2010, Bac Ninh Province have been granted business registration certificates for
797 enterprises, including: 748 enterprises granted business registration certificates of the
Company Law, 100% new business was established in 2010 small and medium-sized
enterprises; 49 FDI investment certificates associated with the establishment of enterprises,
branches, representative offices under the Investment Law; as the end of 2010, Bac Ninh
province has a total of 4.293 enterprises, in including 5 state enterprises and private
business 4013, 275 FDI enterprises.
In general, businesses in the province to develop good business in accordance wi th
law, to be effective, has potential exploit local strengths such as capital, labor, skill, level
workers, especially is in the local traditional handicraft villages. Private sector was
contributing to production development, create jobs, increase budget revenues, improve
people's lives; contribute to poverty reduction, economic restructuring towards
industrialization of modernization and contribute significantly to the socio-economic
development of the province. Enterprises have increasingly conscious mouse than in the
observance of safety, occupational health and insurance.
Results of implementation plan for SME development in the province of Bac Ninh
2006-2010. Bac Ninh Province to encourage and create favorable conditions and support
people to establish enterprises; province has planned and established industrial parks, small
and medium-sized industrial clusters, industrial villages, to help people set up businesses
have leased premises conditions for investment in the business.
The province has implemented mechanisms, effective new policies to improve the
business environment. PCI index increasingly improved rankings year after more than year
ago: rated 22 (2006), No. 16 (2008); 2009, provincial competitiveness index of the North
increased security 6 Level No. 10 compared to nationally and internationally as one of
three leading provinces PCI index of the northern provinces; 2010, the provincial
competitiveness index of Bac Ninh increased to 4 Level stand 6 compared with nationally
and internationally as one of the top leading PCI of the northern provinces.
On the business side: The majority of SMEs have small capital, so the investment
in modern technology and equipment (mostly imported from abroad) is very difficult,
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while to the competitive foreign companies to continuously improve equipment, reduce
input costs. State policies to support credit loans but access to capital is impeded by the
small value mortgage, can not afford credit guarantee; SMEs often lack and difficulties
with most kinds of business are not given priority in terms of production, often using their
own homes, and hiring of private land lease prices high, there is still discrimination.
Low level of technology and quality of labor is limited, derived from small-scale
features which shoul d virtually restricted business investment in modern technology and
equipment.
Management level and low-skilled, the number of SMEs through training
percentage is very low and virtually untrained professional; while workers mostly manual
labor, only trained short-term job or the labor shift from agriculture to up the skill is still
limited. Therefore, the application of modern advanced technology is also difficult.
SMEs lack information and remain flat side of the relationship (the state, the
market, banking, science centers and training centers, etc.). Internet access and applications
in business for SMEs constrained by insufficient qualifications as well as the cost is quite
high compared to the size of the small business.
SME Development Goals 2011-2015: accelerate business growth and enhance the
competitiveness of SMEs, business investment environment and convenient, equitable,
transparent to the SME contribution increasing economic development and improve
national competitiveness.
Target SME Development 2011-2015: number of newly established enterprises
increased by 25% / year; each year about 500 new established enterprises and 20,000
employees supported technical training, and technical management in SMEs; meet the
basic business of the production business.
The story of a representative enterprise producing bamboo handicrafts in Y Yen
District, Nam Dinh said: Although the village is famous for its line of bamboo lacquer
products, but the products must through intermediate systems, inaccessible to direct
customers. There is time for the people of this village to busy racing competition, including
not healthy, so it's time for poor quality products. When the product is on the market,
customers see poor quality so next time do not buy anymore.
Notably, there are many large business companies do not get the goods of this
village that takes the product of another village, while other villages choose to buy
products that actually get the product from this village for sale rather than production. This
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situation led SMEs in this village that the deadlock, even feel the "injustice" in the
marketplace. However, according to Pham Chi Lan, this is something quite common in
villages in Vietnam.
Being aware of mentioned issues and with the support from small and medium
enterprises in traditional handicraft villages in Bac Ninh province and consultant from
supervisor, with the purpose of enhancing quality and quantity of not only products of
SMEs but also SMEs themselves, the researcher studied this thesis entitled “Developing
small and medium enterprises in traditional handicraft villages in Bac Ninh province”.
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