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VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES - DO TRUNG HIEU DEVELOPMENT OF SUPPORTING INDUSTRIES IN SOME EAST ASIAN COUNTRIES AND LESSONS FOR VIETNAM Major: International Economics Major code: 31 01 06 SUMMARY OF DOCTORAL THESIS IN ECONOMICS Ha Noi – 2023 The research was completed at: VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES Scientific Advisors : Assoc Prof PhD, Le Ngoc Tong PhD, Le Thi Ai Lam Counterargument 1: Assoc Prof PhD, Lưu Ngoc Trinh Counterargument 2: Assoc Prof PhD, Nguyen Duy Dung Counterargument 3: Assoc Prof PhD, Phan Tran Trung Dung The thesis is defended at the Academy-level Thesis Judging Committee, meeting at the Graduate Academy of Social Sciences, Vietnam Academy of Social Sciences, 477 Nguyen Trai Street, Thanh Xuan District, Hanoi At ,2023 The thesis can be found at: - National Library of Vietnam - Graduate Academy of Social Sciences Library INTRODUCTION The urgency of the subject Supporting industry (Supporting Industry) is the industry that provides inputs for most other industries, so the development of Supporting Industry will make an important contribution to the development of the entire industry and, more broadly, the economy of the country each country The development of supporting industry helps the economy develop sustainably, limiting the impact of external economic crises For example, in the 2008 economic crisis, countries like China and Japan were less affected by the crisis crisis thanks to the development of supporting industry As for the industrialization process, supporting industry is the industry with the greatest need for using the most modern technology Therefore, developing supporting industry will promote the process of technology transfer and internalization of technology, creating a foundation to accelerate the process of industrialization and modernization of the economy In addition, the development of supporting industries contributes to the reform of supporting industries and is one step ahead to pave the way With such an effect, the supporting industry is considered an important link in the country's economic development After integrating into the ASEAN Economic Community and signing free trade agreements, Vietnam also set the goal of developing supporting industries as a common strategy for the entire society to promote economic development However, the current situation of Vietnam's supporting industry is considered to be underdeveloped, unable to meet the requirements of the manufacturing and assembly industry, especially providing components for businesses and corporations group with foreign investment capital Furthermore, the number of enterprises specializing in supporting industries is still small, their qualifications are only average, even low and backward compared to the region and many countries in the world This is a major obstacle to the stable and sustainable development of our country's economy in the process of deeper and deeper integration Current legal regulations also have many shortcomings and obstacles, so they not create strong mechanisms and policies to promote the development of supporting industry Due to limited facilities, supporting industries in Vietnam have not really met the requirements of partners and their competitiveness is still low Up to now, some of Vietnam's strong industries such as electronics, textiles, footwear, automobile and motorbike assembly have almost no accompanying supporting industries, so they must highly dependent on imported raw materials, causing production to remain fragmented, passive, and with high costs In fact, Vietnam's supporting industry has also received attention in recent years, but development has not been commensurate due to many obstacles in mechanisms, policies and even from businesses themselves Lessons about the development of supporting industry in countries such as Japan, China, Thailand will be valuable experience for domestic businesses to learn and apply Vietnam needs to take advantage of the fact that late-comer countries apply lessons and experiences in developing supporting industry of previous countries in a way that is appropriate to the actual situation of our country Therefore, it is necessary to have in-depth research on the current state of supporting industry development in East Asian countries to be able to draw experiences and lessons with the aim of building a set of solutions in the right direction to develop the supporting industry in accordance with the current conditions conditions and needs of the country With such awareness, the author chose and carried out the topic " Development of supporting industries in some East Asian countries and Lessons for Vietnam " for his doctoral thesis in international economics, hoping to From the experience drawn from researching supporting industry in East Asian countries and from the reality of Vietnam, it will help propose a number of appropriate directions and lessons to contribute to accelerating the development of the country's supporting industry, helping Vietnam The South soon became a modern industrialized country Purpose and research tasks of the thesis 2.1 Research purposes: On the basis of clarifying theoretical issues about supporting industry and supporting industry development, the thesis will analyze and evaluate the current situation of supporting industry development in some East Asian countries, including successful lessons and suggestions lessons of failure and the causes of that failure, and at the same time draw out similarities between Vietnam and East Asian countries, thereby building a set of lessons learned in the right direction of developing the supporting industry in accordance with the needs of the country conditions and needs of our country until 2030 2.2 Research mission The basic research tasks of the thesis are specifically as follows: - Clarifying theoretical issues related to supporting industry and supporting industry development - Research the current status of supporting industry development in some East Asian countries, specifically Japan, China, and Thailand, point out successful lessons and shortcomings along with their main causes, and draw conclusions from there out lessons for Vietnam - Analyze the current situation of Vietnam's supporting industry, evaluate the level of development of Vietnam, thereby pointing out the characteristics and problems that Vietnam's supporting industry is facing - Based on lessons learned from East Asian countries and the current status of Vietnam's supporting industry development, to propose proposed orientations and recommendations appropriate to the actual situation in our country in order to promote Strongly develop supporting industry Subject and scope of research of the thesis 3.1 Research subjects Research object of the thesis: Theoretical and practical basis for developing supporting industry in some specific countries: Japan, China, Thailand to serve main industries, increase competitiveness, develop sustainable economic development The author's choice of some specific countries, Japan, China, and Thailand, is because these countries are the countries with the fastest growth rate of supporting industries in the world, but they once had a starting point and had Many similarities with Vietnam These countries belong to the same geographical region in East Asia like Vietnam Thanks to good models, solutions, and practices in developing supporting industries, these countries have achieved today's achievements 3.2 Research scope - Regarding research content: The thesis researches the current status of supporting industry development, focusing mainly on issues of mechanisms and policies in some East Asian countries including Japan, China, Thailand and Vietnam in some industries such as electronics and information technology, automobiles, textiles, and footwear - Regarding research space and time: Research the current status of supporting industry development in Japan, Thailand, and China from 1990 to 2020 The author chose this time range because this is the period of time During the period when East Asian countries had the most obvious and outstanding changes and developments in the supporting industry, after the time of this study, the level of development of the countries became even more saturated and difficult to quantify As for the current state of Vietnam's supporting industry development, the author conducted research in the period from 2007 to 2022, in order to have the most up-to-date view of our country's situation and this period is also quite similar to the starting point of my research East Asian countries Because research time is limited, the author focuses on a number of typical industries such as: electronics-informatics, automobiles, textiles, footwear, etc The author chooses these industries because they are The professions in which the East Asian countries mentioned above have achieved many remarkable achievements At the same time, the Vietnamese Government also prioritizes the development of these industries through the issuance of Decree 111/2015/ND-CP on supporting industry development, effective from January 1, 2016 Accordingly, organizations and individuals research and develop the production of supporting industry products in the List of priority supporting industry products for development including textiles, footwear, electronics, automobile assembly, High-tech industry will be funded from the Supporting Industry Development Program, support from Funds and other funding sources for research, development and training Focusing on developing these professions is extremely necessary in accordance with world trends as well as Vietnam's economic development conditions - Research perspective: Macro perspective - State (Government) mechanisms and policies for supporting industry development Research method of the thesis Based on the methodology of dialectical materialism and historical materialism, combined with the application of viewpoints, guidelines and economic development policies of the Party and State, the thesis will use research methods mainly later: (i) Regarding data collection method: • Secondary data collection methods: Secondary data sources are taken from the database of the Ministry of Industry and Trade, SIDEC Center - Institute for Industrial Policy and Strategy Research - Ministry of Industry and Trade; The investment plan; General Statistics Office; General Department of Customs; Trademap.org, UNComtrade Specifically: Data on the current status of industries and supporting industries of those industries are taken from the General Statistics Office website; website of the General Department of Customs; Support Industry Enterprise Support Center (SIDEC) - Industrial Policy and Strategy Research Institute - Ministry of Industry and Trade In addition, the author referred to data and diagrams from research reports from state agencies, Scientific research of research countries and specifically cited Other data related to supporting industry and supporting industry products of countries, as well as supporting industry development policies are collected from the websites of the Ministry of Industry and Trade and the Ministry of Planning and Investment; Government, other sources of supporting industry organizations, Association of supporting industry enterprises, Center for Supporting Industry Enterprise Development Ministry of Industry and Trade, related research topics, thesis, articles, analysis articles, etc • Primary data collection methods: Expert interview method: The author will conduct interviews and investigate subjects who are organizations related to SI of East Asian countries and Vietnam The author also has interviews with research experts in Vietnam and Japan, China, and Thailand; Policy makers related to supporting industry in Vietnam All survey data were processed using SPSS statistical software (ii) About data analysis methods Basic data analysis methods in economic research used in the thesis research include: + Theoretical analysis and synthesis method: Systematize general theoretical issues on supporting industry development based on the inheritance of reference documents and domestic and foreign research works on supporting industry; Build a new theoretical system on the concept and content of supporting industry development, and sets of criteria for evaluating supporting industry development, applied to chapters 2,3,4 of the thesis + Descriptive statistical method: Used to arrange, classify and synthesize collected data, from which to build tables and graphs to analyze data to evaluate the current status of supporting industry development in different countries East Asian countries and Vietnam and from there draw the results of supporting industry development, influencing factors and lessons learned + Comparative statistical method: Using statistical data to analyze, compare, and evaluate directional policies, measures, and actions to proactively develop supporting industries in Eastern countries Asia has done it From there, compare the similarities between Vietnam and East Asian countries to draw lessons applicable to Vietnamese practice Applied to chapters 2,3,4 + Methods of collecting and systematizing data The thesis uses this method to analyze, evaluate, and summarize researched works, experiences, and practical data related to the thesis topic In particular, due to the new nature of the problem, the thesis uses the case study method, which is suitable for discovering new problems, as well as for proposing hypotheses for future research follow-up research on a larger scale Applies to chapters 2,3,4 + Analysis - synthesis and comparison methods are used to analyze, evaluate, identify problems, compare and correlate the development situation and determine appropriate lessons to apply into the practice of the supporting industry in Vietnam Applicable to chapters 2,3,4 of the thesis New scientific contributions of the thesis Firstly, comprehensively systematize a number of issues related to supporting industry, the content of supporting industry development and groups of evaluation criteria as well as factors affecting supporting industry to serve as a basis for analysis throughout the entire thesis Second, present, analyze and evaluate the current situation of supporting industry development in some East Asian countries through the content of supporting industry development, pointing out successes, limitations and shortcomings, and determining the causes of they Third, after summarizing and generalizing the characteristics and problems of supporting industry and developing supporting industry in Vietnam, and on the basis of lessons learned from East Asian countries, the thesis will propose a number of perspectives and appropriate lessons to promote the development of supporting industry in Vietnam in the context of extensive international economic integration until 2030 Theoretical and practical significance of the thesis - The thesis will be a document serving research and teaching in Economics in Vietnam in general and a theoretical research document on supporting industry development in particular - The thesis provides arguments and scientific basis for Vietnam in planning policies for supporting industry development; Drawing lessons from experiences in developing supporting industry from the three most developed economies in East Asia (Japan, Thailand, China) thereby suggesting a number of lessons to solve remaining problems in developing supporting industry In Vietnam Structure of the thesis The thesis includes the following parts: List of abbreviations, List of Tables, Figures, Introduction, Conclusion and List of References divided into chapters: Chapter 1: Overview of research on supporting industry development in East Asian countries and Vietnam Chapter 2: Theoretical basis for supporting industry development Chapter 3: Current status of supporting industry development in some East Asian countries Chapter 4: Orientation perspectives and lessons for supporting industry development applicable to Vietnam Chapter OVERVIEW OF RESEARCH ON DEVELOPMENT SUPPORTING INDUSTRY IN EAST ASIA COUNTRIES AND VIETNAM 1.1 Related foreign projects 1.1.1 Group of projects researching the theoretical basis of supporting industries - Book: “White paper on Industry and Trade” of the Japanese Ministry of International Trade and Industry, 1985, where the term supporting industry (SI) is used to refer to “Small and medium enterprises” (SMEs), businesses that contribute to strengthening industrial infrastructure in Asian countries - Research work: “Production Networks and Industrial Clusters: Integrating Economies in Southeast Asia” (Production Networks and Industrial Clusters: Emerging Economies in East Asia), 2008, Ikuo Kuroiwa and Toh Mun Heng, - Research project: “Green Practices in Supply Chain Management: Case Studies” (Research: Practices in green supply chain management), 2020, Mehmet Sıtkı Saygili, , Ziynet Karabacak , Green Supply Chain Management (GSCM) ) has emerged over the past few years as an important management model - Research work: "The Competitive Advantage Of Nations", Harvard Business Review published as a book by author M.E Porter, published in 1990, Publishing House Harvard University - New York USA - Research project: “Investigation report for industrial development: supporting industry sector” (Investigation report for industrial development: supporting industry sector) – Japan International Cooperation Agency (JICA), (2005) , Tokyo - Research project "Supporting Industries: A Review of Concepts and Development" (Supporting Industries: A Review of Concepts and Development) - Nguyen Thi Xuan Thuy, 2006 - Research project: "Promotion of supporting industries - The key for attracting FDI in developing countries" (Promoting supporting industries - The key to attracting FDI in developing countries), Do Manh Hong, 2008 1.1.2 Research group on supporting industry development - Research work: "Strengthening of Supporting Industries: Asian Experience" (Strengthening supporting industries: Asian Experience), by Asian Productivity Organization, published in 2002 - Research project “Multinational Enterprises and Technological Effort by Local Firms: A Case Study of the Malaysian Electronics and Electrical Industry” - Book: “Japanese - Affiliated Manufactures in Asia” (Japanese Manufacturers in Asia), produced by the Japan External Trade Promotion Organization (JETRO), 2003 - Research project "Survey on comparison of background, policy measures and outcomes for delelopment of supporting industries in ASEAN" support in ASEAN), 2011 by Goodwill Consulting JSC and Vietnam Development Forum 1.1.3 Group of research projects on policies and lessons for developing supporting industries - Research project: "Effects of the Crisis on the Automotive Industry in Developing Countries A Global Value Chain Perspective" (Effects of the crisis on the automotive industry in developing countries Value chain perspective global) by author T.J Sturgeon and J.V Biesebroeck - Research project: “Survey report on overseas business operations by Japanese manufacturing companies” (Survey report on overseas departments of Japanese assembly companies) by Japan Bank for International Cooperation (JBIC) announced in 2004 - Research project: "Development of Supporting Industries for Vietnam's Industrialization increasing positive vertical externalities through collaborative training" (Developing supporting industries for Vietnam's industrialization, increasing positive externalities by industry) vertically through cooperative training), Junichi Mori, Master of Arts in Law and Diplomacy Thesis, 2005 1.2 Research projects in Vietnam 1.2.1 Research group on theoretical basis of supporting industry - National scientific research project: "Scientific basis for building a strategy for developing Vietnamese human resources to meet the requirements of socio-economic development in the context of the 4th development conditions, development criteria, factors affecting the development of supporting industry, However, the theoretical basis system for supporting industry development still has some limitations as follows: Regarding the concept and scope of supporting industry: in each research project there is a different approach and definition of supporting industry with different wide and narrow scopes, this has led to difficulties in accessing data analyze the current state of supporting industry development, and at the same time the difficulties in the process of identifying supporting industry enterprises to build and implement support and incentive policies Therefore, the first issue the author needs to focus on is determining the concept and scope of supporting industry of the thesis topic in accordance with Vietnam's conditions in the current context Regarding development assessment criteria, in previous research works, the approach to development assessment criteria is still quite general, leading to weak data analyzing the current state of supporting industry development; In particular, the criteria given not closely follow the concept and basic issues of Supporting Industry Development (2) Regarding the current situation: Regarding foreign research, topics related to the development of supporting industry are mainly concentrated in Asian countries such as Japan, Thailand, China, with a period of at least more than 20 years ago providing provide some experience in the process of developing supporting industry in other countries Regarding domestic research, the topics have provided some assessments on the current state of development of Vietnam's supporting industry in general, and supporting industry in some industries in particular such as the consumer electronics industry, the footwear industry, the automobile industry, motorbikes, etc However, the analysis of the current state of supporting industry development is still quite general, not highlighting the current state of development, difficulties and limitations in the operation of supporting industry enterprises associated with each industry sector specific main (3) Regarding lessons and experiences: The above research projects all confirm the development of supporting industry has a great impact on economic growth, and is also a 11 direct driving force added value to the industry, helping to increase the competitiveness of industrial products, creating conditions to attract foreign investment, and accelerating the process of integration into the global industry However, the system of viewpoints, orientations, and specific solutions that are feasible and sustainable in the current context have not been deeply analyzed and clearly explained by the author (4) Some research gaps are drawn from the above studies: - Developing the manufacturing and processing industry is a longterm process, often lasting decades, requiring appropriate allocation of national resources; - The State plays a supporting role, supporting and accompanying industrial production enterprises, focusing on small and medium enterprises in the development process; - Focus on support solutions to improve the level of technology, human resources, and capital for potential businesses in priority industries to be on par with the region and the world to lead the industry ; - Ensure a favorable business environment and stable macroeconomics to create a productive spirit in society, and encourage the direction of social investment capital into the production sector - Developing supporting industry must go hand in hand with developing the country's economy in a green and sustainable direction, in parallel with promoting digital transformation to meet the requirements of globalization Make sure Vietnam is not left behind The results of the research projects have provided a number of current situations and solutions to develop supporting industry in some East Asian countries and draw lessons for future countries It can be seen that the limitation of these research projects is that they not clearly analyze and explain specific, feasible and sustainable solutions in the current context Lessons appropriate to the conditions of economic development as well as supporting industry in Vietnam have not yet been drawn based on practical connections as well as similarities between Vietnam and the development periods of East Asian countries Conclusion of chapter 12 Chapter THEORETICAL BASIS OF SUPPORTING INDUSTRY DEVELOPMENT 2.1 Some theoretical issues about supporting industries 2.1.1 Some concepts related to supporting industry development a) Theory of comparative advantage The theory of comparative advantage was introduced by David Ricardo in 1897 in his book "Principles of Political Economy and Taxation" Regarding national and industry competitive advantage, according to Porter (1990), national competitiveness will help improve the most optimal efficiency of productivity of labor and capital That is "The value of goods produced by a unit of labor or capital" [102- page 48] Thus, improving the competitiveness of an industry or a country means increasing the labor productivity of that industry or that country Diagram 2.1: Competitive advantage model by M Porter a) Value chain The phrase "Value Chain" fully refers to all the activities necessary to create a product or service from its conceptual state through production, delivery to customers and post-use disposal use; Specifically on a global scale, the value chain includes activities: design, production, marketing, distribution and after-sales service of businesses on a global scale Accordingly, a value chain exists when all components in the chain operate and coordinate to create maximum value throughout the chain 13 2.1.2 Concept of supporting industry in some countries and Vietnam “Supporting industry is an industry that produces intermediate products, including industries that produce materials, spare parts, components, and semi-finished products to supply the manufacturing industry and assemble finished products as capital goods production or final consumer product” 2.1.3 Scope of supporting industries Up to now, the scope of industry has not had a unified conceptual explanation In particular, there are still many opinions in distinguishing the scope of supporting industries The figure below will illustrate the scope of supporting industry Diagram 2.2: Scopes of supporting industries Main scope: Industries whose main function is to produce components and accessories to serve the final product assembly stage of industries Expanded scope 1: Industries that not simply produce spare parts but also include services such as logistics, warehousing, and insurance distribution Expanded scope 2: "Industries that provide all input goods including spare parts, components, machine tools and raw materials such as 14 steel, chemicals, for the assembly industry"[ 28, pp 43-44] 2.1.4 Development stages of supporting industries In reality, in different countries, the development process of the supporting industry is not the same Therefore, separating the stages is quite difficult, but according to the synthesis of experts, for developing countries, the development process of the supporting industry usually goes through stages (See Diagram 2.3 ) CNHT products are few, must be imported The number of CNHT products increased but the quality was not high The volume of CNHT products increased and the appearance of unique products, imports decreased Highly developed CNHT products have domestic competition The capacity of CNHT was developed, starting to appear CNHT products Diagram 2.3: Development stages of the supporting industry 2.1.5 Characteristics of supporting industries a) The development of supporting industry is inevitable through the process of division of labor b) The supporting industry is a complex and large industry with multi-level and interconnected properties, contributing to the value chain c) The supporting industry attracts a large number of businesses, especially small and medium-sized enterprises d) Diversity of technology and technological level e) The supporting industry is not a "side industry" but depends on the main industry 2.1.6 The role of supporting industries Firstly, "Increase the competitiveness of main industrial products and accelerate the process of industrialization and modernization in breadth and depth." [17, page 76] Second, Support the development of domestic industry, creating sufficient conditions to develop industry clusters Third, improve the competitiveness of exported industrial goods, promote the development of small and medium enterprises Fourth, receive technology transfer and attract foreign direct investment (FDI) Fifth, supporting industry also contributes to creating jobs and 15 developing human resources, contributing to the long-term growth of the economy 2.2 Basic content of supporting industry development 2.2.1 Concept of supporting industry development According to the author, the concept of Supporting Industry Development can be summarized as follows: Supporting industry development is a collection of contents, tasks, and activities such as policies of state management agencies, organizations, and individuals personnel in supporting industries, human resource training, research and development, support for technology transfer in manufacturing supporting industry products, international cooperation, market development; investing in projects to produce supporting industrial products; Providing supporting industry services with the aim of supporting the sustainable development of supporting technology products 2.2.2 Content of supporting industry development 2.2.2.1 Strategies and policies to promote the development of supporting industry 2.2.2.2 Development of small and medium enterprises 2.2.2.3 Attract reasonable foreign investment capital 2.2.2.4 Training and development of human resources 2.2.2.5 Strengthen links between businesses and industrial clusters 2.2.3 Criteria for evaluating the level of development of Vietnam's supporting industries 2.2.3.1 Scale and number of supporting industry enterprises 2.2.3.2 Technology level and human resources of supporting industry enterprises 2.2.3.3 Localization rate of supporting industry products 2.2.3.4 Competitiveness of supporting industry products 2.2.3.5 Qualification of human resources 2.2.2.6 Quality and price of supporting industrial products 2.2.4 Factors affecting the development of supporting industries 2.2.4.1 Macroeconomic environment and state policy mechanisms 2.2.4.2 Demand scale 2.2.4.3 Lack of information and differences in quality standards 2.2.4.4 Financial and human resources factors 2.2.4.5 Development of key industrial enterprises Summary of Chapter 16 Chapter CURRENT STATUS OF SUPPORTING INDUSTRY DEVELOPMENT OF SOME EAST ASIAN COUNTRIES 3.1 Overview of the current situation of supporting industry development in some East Asian countries (Japan, China, Thailand) 3.1.1 General situation of supporting industry development in East Asian countries Table 3.1: Current status of outstanding supporting industry development of some East Asian countries Stt Content of supporting industry development Nation outstanding Since the 1980s, Japan has been allowed to invest directly in Asian countries Japan holds the position of Japan leader in the flying swallow model for economic development China has achieved rapid economic development since the reform and opening-up policy in the early 1990s China Since 2000, China has been the "World's Factory" in the manufacturing sector exports such as electricity and automobiles Asian In response to Japanese direct investment in the 1980s, Countries which was growing rapidly; NIEs have developed as (Korea, Asia's economic leaders NIEs are developing as a Taiwan, global hub for high-tech industries Hong Kong, Singapore) ASEAN-4 Since the 1980s, ASEAN-4 grew rapidly in response to countries direct investment from Japan and Asian NIEs In (Thailand, addition, ASEAN-4 has become Asia's main bases in Malaysia, the fields of automobiles, electricity/electronics, food Indonesia, processing and textiles/garments Philippines) Vietnam has been catching up with advanced countries in ASEAN However, Vietnam is facing the challenge Vietnam of promoting supporting industries 17 Figure 3.1: Proportion of industrial goods in total export turnover of some East Asian countries Source: United Nations statistics on import and export of Asian countries, 2003 Figure 3.2: Statistics on FDI investment and East Asia compared to other regions of Asia Source: UNCTAD, World investment report 2014 (World investment report 2014) 3.1.2 Current status of supporting industry development in Japan - Strategies and policies to promote supporting industry development - Training and developing human resources - Developing small and medium enterprises 18 - Strengthen links between businesses and industrial clusters 3.1.3 Current status of supporting industry development in China - Supporting industry development strategies and policies - Attract reasonable foreign investment capital - Training and development of human resources and technology - Strengthen links between businesses and industrial clusters 3.1.4 Current status of supporting industry development in Thailand - Strategies and policies to promote supporting industry development - Strengthen links between businesses and industrial clusters - Attract reasonable foreign investment capital - Training and development of human and scientific resources 3.2 Factors affecting the supporting industry of some East Asian countries a) Factors affecting Japan's supporting industry - Macroeconomic conditions and state policies - Human resource factor - Demand scale factor - The development of key industrial enterprises b) Factors affecting Thailand's supporting industry - Policy mechanism factors - The development of key industrial enterprises - Lack of information and differences in quality standards - Human resource factor c) Factors affecting China's supporting industry - State policy mechanism - The development of key industrial enterprises - Macroeconomic environment - Human resource factor 3.3 Some achievements and limitations in the development supporting industry in East Asian countries 3.3.1 Some results achieved in the development of supporting industry Japan 3.3.2 Some results achieved in the development of supporting industry China 3.2.3 Some results achieved in the development of supporting industry 19 of in in in Thailand 3.4 Lessons learned in developing supporting industry of some East Asian countries 3.4.1 Lessons of success - Lessons on building strategies and promoting policies for supporting industry development - Lessons on developing SMEs (Small and Medium Enterprises) - Lessons on developing high-quality human resources and scientific technology - Lessons on linking business chains and business clusters - Lessons on attracting foreign investment (attracting FDI) 3.4.2 Lessons of failure - The current situation shows that in order to develop the supporting industry as it is now, the Governments of many countries have introduced many policies, some of which are successful, but some are also failed -Japan: Lesson one: Specifically, in the period before 2000, the Japanese Ministry of Trade and Industry (MITI) introduced a policy to organize the merger of a number of industries through the "Group Plan" to achieve economic scale and increasing competitiveness not only in the main industry but also in supporting industries, but for the automobile industry group, it is a failed policy Lesson two: In the chip manufacturing industry, there is still a huge difference in technology between Japan and the US To catch up with the US, in 1976, the Japanese Ministry of International Trade and Industry invested 72 billion yen in Hitachi, Mitsubishi, Fujitsu, Toshiba and NEC The Institute of Computer Science and Technology has established the VLSI high-density integrated circuit research and development organization This research and development plan was very successful as Japan imitated American technology - Thailand Policies to support small and medium-sized enterprises in these countries cause the supporting industry to have too many supporting industry manufacturers, resulting in investment resources for these industries being scattered, causing loss of economic efficiency - China: 20 The chip industry is one of the most important supporting industries in China, however the self-sufficiency ability for China's chip industry is currently only at 20% -30% Therefore, China is very interested in developing this supporting industry However, a real example is the Tsinghua Unigroup chip factory project, which failed even though the project was supported by the government The reason for this failure is that China does not conduct R&D activities Many Taiwanese engineers helped build the semiconductor industry in China as experts in important activities but they Lack of R&D experience to create value from scratch This is considered a lesson of failure for countries when planning strategies to develop their country's chip manufacturing industry Conclusion of chapter Chapter DIRECTIONS AND LESSONS FOR APPROPRIATE SUPPORT INDUSTRY DEVELOPMENT FOR VIETNAM 4.1 The current status of supporting industries in Vietnam is studied in a number of industries 4.1.1 Current status of supporting industries in the textile industry Figure 4.1: Vietnam's imports of textile and garment raw materials over the years 2013 - 2019 (Unit: million USD) 4.1.2 Supporting industries in the electronics industry 4.1.3 Supporting industries in the automobile industry 4.1.4 Supporting industries in the leather and footwear industry 4.2 Assessing the current status of supporting industry development in 21 Vietnam 4.2.1 Results achieved in supporting industry development in Vietnam 4.2.2 Limited and causes 4.2.2.1 Limitations 4.2.2.2 Some main reasons 4.3 Perspectives and orientations on Vietnam's supporting industry development until 2030 4.3.1 Perspectives on supporting industry development in Vietnam until 2030 4.3.2 Orientation for supporting industry development in Vietnam until 2030 4.4 Some relevant lessons for developing supporting industries in Vietnam from East Asian countries 4.4.1 General lessons for developing the supporting industry in Vietnam 4.4.1.1 Build the legal system and perfect supporting industry development policies 4.4.1.2 Develop development planning for supporting industries 4.4.1.3 Developing SMEs in the supporting industry 4.4.1.4 Complete and supplement policies to attract FDI investment in supporting industry development 4.4.1.5 Focus on improving scientific and technological capacity for supporting industry enterprises 4.4.1.6.Promoting industrial linkages 4.4.1.7 Policy on localization rate 4.4.1.8 Improve the quality of human resources 4.4.1.9 Build a database of supporting businesses and supporting products and disseminate business information 4.4.2 Group of lessons learned to develop supporting industries in the automobile, textile, electronics, and footwear industries 4.4.2.1 Solutions for developing supporting industries in the automobile industry 4.4.2.2.Solutions to develop supporting industry in the textile, garment, and footwear industries 4.4.2.3 Solutions for developing supporting industries in the electronics industry 22 CONCLUDE The thesis has systematized the basic theoretical basis of supporting industry and drawn some lessons for developing supporting industry of East Asian countries (Japan, China, Thailand); From there, we offer some suggestions for lessons suitable to the current situation of Vietnam's supporting industry In the context of increasingly deep economic integration and under the impact of increasingly fierce international competition, many limitations in the quality of the economy are gradually appearing The issue of restructuring the economy, choosing new growth models, and restructuring industries is becoming urgent in order to maximize Vietnam's advantages, towards sustainable development, improving competitiveness, narrowing the gap with countries in the region In particular, the role of industries and especially supporting industry is identified as the most important pillars However, developing the supporting industry requires a long-term process of accumulating management and production skills, and cannot make a leap without strong support from the State From the lessons of East Asian countries and studying the relevance to Vietnam's practice, the author draws overall lessons to help develop Vietnam's supporting industry in the current period as follows: (1) The State needs to have a consistent, long-term policy and allocate resources large enough to support supporting industry enterprises to reach regional and international levels In addition, introduce a separate set of laws and market development policies for supporting industry such as promoting the development of downstream industries, material industries as well as attracting investment in manufacturing supporting industry products (2) In addition to financial support solutions, science and technology development as well as human resources, it is also necessary to promote links between the Vietnamese business community and multinational enterprises and manufacturing companies foreign export and assembly (3) The Government needs to have appropriate policies to protect the domestic market, create a healthy business environment to promote the development of supporting industry production for key industries such as the automobile and electricity industries electronics, textiles, footwear; 23 Develop flexible and appropriate policies on import taxes, interest rates, etc for imported components and spare parts to help businesses producing finished products cut product costs and improve competitiveness compared to imported goods (4) As for businesses, they cannot only rely on the State's support but must be proactive in technological innovation, improving management and production capacity to gradually gain a foothold in the current context Market competition is increasingly fierce today These are the fundamental lessons and solutions to ensure the stable development of the supporting industry, thereby creating an important foundation to help the economy grow sustainably in the long term, consolidate internal resources, and strengthen the country's self-reliance water 24 RELATED AUTHORS' PUBLISHED WORKS GO TO THESIS TOPIC Do Trung Hieu (2021), "Vietnam's supporting industry in the context of the COVID-19 pandemic", Journal of Southeast Asian Studies No 12, December 2021 Do Trung Hieu (2021), "Enhancing the role of supporting industries in the value chain of Vietnam's electronics industry - current situation and solutions" Asia-Pacific Economic Journal No 593, July 2020 2021 Do Trung Hieu (2016),” Supporting industry development: Experience of some countries and territories in Asia”, Journal of Southeast Asian Studies No 11, November 2016 Do Trung Hieu (2016)," State management in the field of supporting industries - Experience of some Asian countries", Journal of Home Affairs Scientific Research No 13, July 2016