Many industries have high levels of labor productivity thanks to natural resouces

The energy industry has high level of productivity thanks to natural resources. Picture: internet.

In industry, 8 economic sectors include textiles, footwear, plastic, steel, chemicals, mechanical engineering, energy, electricity, electronics-informatics are the most important economic sectors contributing to the country’s economic development.

However, a recent report of the Vietnam National Productivity Institute shows that in the 8 economic sectors above, the energy industry has the highest value added, estimated at over 350 trillion vnd, the growth rate of the sector is about 6.4% per year.

Electricity, and electronic-informatic sectors have a high value added and growth rate of 38.6%. The value added and growth rate of the mechanical manufacturing industry is also quite good. The steel industry showed a low value added and growth rate in the recent period. The plastics and chemical industries have low value added, but the growth rate is relatively good.

In the two labor intensive industries, the textile industry has a higher value added but slower growth rate than the footwear industry.

Notably, among the industries compared, if labor productivity is calculated by the value added on the amount of the labor, the energy industry has a high level of labor productivity, about 1 billion vnd per worker in 2015. However, labor productivity of the sector is extremely high because its specification depends on natural resources.

The energy industry in the recent period has grown its capital quite fast, the value added growth is largely based on the increase of the capital intensity and partly based on labor increase. It means the increase of value added depends completely on the increasing inputs without an improvement in productivity.

Similarly, steel and chemical industries primarily based on the advantages of the natural resource exploitation, the productivity growth is thanks to the contribution of technological innovation but application of science and modern management is still limited.

Meanwhile textile and footwear industries – the two key groups of Vietnam in the group of low technology have a low level labor productivity, equivalent to 76 million vnd per worker and 74 million vnd per worker.

Agreeing with this evaluation, in the recent workshop “Boosting innovation, improving productivity and goods quality of Industry and Trade”, the Director of the Science and Technology Department (MOIT), Nguyen Phu Cuong, thinks that the weakness of Vietnam enterprises is in thinking errors, fragmentation in business and notably old-fashioned management, not catching up with the modern trends in the world.

Most enterprises in the sectors are lagging behind in technology compared to other countries in the region, depending on machinery and equipment from aboard. Meanwhile, the limited capital restricts the ability to invest and transfer new technologies.

According to experts, this is what makes our enterprises unable to improve the quality and value of products, then can not compete with foreign enterprises.