The non-state economic sector has the lowest labor productivity

	The development of private enterprise will improve their labor productivity
	The labor productivity of small, medium and micro enterprises plays an important role in the economy
	Many industries have high levels of labor productivity thanks to natural resouces

Non-state economic sector has the lowest labor productivity. Artwork: H. D

Productivity is limited in private enterprises

According to research by a group of experts of the National Economics University in the publication ‘Annual Vietnam Economic Review 2019: Improving labor productivity in the context of digital economy', in the period 2010-2019, Vietnam's labor productivity has increased by approximately 1.6 times, from VND 38.47 million per employee in 2010 to VND 60.68 million per employee in 2019.

Although the overall labor productivity has increased steadily over the years, according to experts, in general, labor productivity of the whole economy is still very low.

Part of the reason is that industries with low labor productivity account for a high proportion of labor (such as agriculture). In addition, the quality of labor that manifests itself firstly in the proportion of trained workers is very low. Vietnam is very short of skilled workers, with professional and technical qualifications and we are facing great challenges in the shortage of highly qualified labor.

The research also shows that if Vietnam maintains the growth rate of labor productivity at 5.88% as in the period of 2016-2019, it will take 19 years, meaning that by 2037, Vietnam will be able to reach average income per capita with the target of US$18,000 by 2035 (equivalent to Malaysia in 2010).

Comparing labor productivity of Vietnam and some countries in the region in 2019.

Further analysis of the situation of domestic labor productivity, according to Assoc. Prof. Dr. To Trung Thanh, National Economics University, co-editor of the publication, in general, the relatively high level of labor productivity is concentrated in a number of sectors in the economy, which is led by finance, banking, insurance and real estate business; followed by professional activities of science and technology. The third position belongs to other industries (including mining), and the fourth is information and communications.

In addition, according to these studies, in the three major areas of the economy, the foreign-invested economic sector always leads in terms of labor productivity and the state-owned economic sector ranks second and the non-state sector has the lowest labor productivity.

Especially, although it is considered the main driving force of the economy, Vietnam's private sector is still small and consists of micro enterprises, so it is limited in improving labor productivity. Because these enterprises find it difficult to access and apply technologies to production, lack of capital, lack of skilled labor, difficult to participate, learn from the value chain led by FDI enterprises.

Based on digital technology platform

To improve the situation, experts of the National Economics University said that creating an environment for businesses to grow on a larger scale is the core problem to improve labor productivity of the whole economy.

Moreover, in the context that the old growth engines are almost out of space, experts believe that a new dynamic is needed, and a digital economy is an option. Because technology will support from manufacturing to job management, creating major changes in production methods and labor productivity in economic sectors.

In early February, the Prime Minister issued Directive 07 / CT-TTg on measures to promote national labor productivity.

According to the Directive, Vietnam's labor productivity has improved significantly, but not commensurate with expectations. The labor productivity level equivalent to Vietnam's purchasing power is still modest compared to some countries in ASEAN.

The directive calls for the acceleration of labor restructuring from agriculture to industry and services, especially from low-value-added workers to higher-value added workers; reforming the state-owned enterprises sector, supporting the private sector, especially enhancing the spirit of entrepreneurship and creativity; promoting national digital transformation to increase labor productivity.