Developing textile industrial clusters in the northern delta economic focal region

In order to achieve that goal, the thesis has focused on the following tasks: INTRODUCTION Research rationale - To systemize and develop basic theoretical issues of industrial clusters It is an objective propensity of the industrial development towards modernization that several enterprises having mutual relationships with each other in economic and technical terms in one specific area/territory form industrial clusters - To introduce some experiences of developing industrial clusters of several countries, from which gaining precious lessons for Vietnam The textile industry plays a crucial role in the economy of our country Although this industry does not have a complex production, its enterprises’ production specialization is demonstrated comparatively clearly The formation and development of textile industrial clusters will facilitate the production chain; thereby increasing the productivity and competitiveness of textile products Being located in a certain territory of the industrial clusters, companies manufacturing products, raw and auxiliary materials will be able to minimize the transaction and transportation costs, and share information market at the same time Recognizing the essential role of industrial clusters in the development of the textile industry, the Government has spreaded out a policy to develop a bunch of textile industrial clusters in different localities The strategic development of Vietnamese textile industry driven from 2015 until 2020 has defined its mission as ‘Building specialized textile industrial clusters which are qualified for power and water supply, wastewater treatment in order to meet the environmental standards prescribed by the Government It is necessary to implement the residential relocation and construct new dyeing plants in these industrial clusters so as to upgrade the wastewater treatment conditions and solve the problem of environmental pollution, etc.’ Under this policy, the Northern economic focal region is potential for building some textile industrial clusters Nevertheless, due to some problems of cognition, policies and implementation so far, the textile industrial clusters in this area have not yet to be formed markedly In the coming years, the international integration will be of much more importance since the agreement on the Free Trade Agreement (FTA) and Trans-Pacific Partnership (TPP), which creates handsome opportunities and also poses severe challenges for Vietnam's garment sector Along with the companies’ restructuring in the industry, a full development of the textile supporting industry (SI) and the formation and development of textile industrial clusters has been becoming an urgent need For the reasons stated above, it could be confirmed that the research topic “Developing textile industrial clusters in the Northern delta economic focal region" is based on significant theoretical and practical reality Research objectives On the basis of clarifying the basic theoretical issues on industrial clusters and on characteristics of the textile industry, the thesis analyzes the necessity and conditions for development of textile industrial clusters in the Northern delta economic focal region; thereby contributing to effective and sustainable advancement of textile enterprises in the process of international integration - To analyze the situation of formation and development of textile industrial clusters in the Northern delta economic focal region; to identify favorable preconditions and difficulties hindering the formation and development of textile industrial clusters in the region - To propose measures and solutions to promote the formation and development of textile industrial clusters in the Northern delta economic focal region Research object and research scope Research object: industrial clusters and factors affecting the formation and development of textile industrial clusters, the needed conditions for the formation and development of textile industrial clusters in the Northern delta economic focal region Research scope: Research content: the general content of the nature and characteristics of industrial clusters, the factors affecting the formation and development of industrial clusters, this thesis evaluates the need, ability and precondition upon benefits and constraints impeding the formation of textile industrial clusters in the Northern delta economic focal region As a consequence, the thesis clarifies the scientific foundation involving in the orientation and development of industrial clusters in this economic region then the solutions for the orientation Geography and location: Textile enterprises and concerning organizations working in the Northern delta economic focal region Time scope: o The secondary data: will be collected mainly from 2011 to 2014 o The primary data: will be collected from in–depth interviews of some enterprises managers and experts in 2014 Research methodology Research approach In order to fit the specialized nature of Business Administration, the author decided to research on the textile industrial clusters formation and development in the Northern delta economic focal region from the angle of enterprises and their businesses To be more specific, the author does some more research on the formation and development of the textile industrial clusters in this region through the process of production agglomeration and concentration of companies in the territory so as to organize more effectively the affiliate relations in the value chain of textile products Some contents related to state agencies were studied so that some roles and responsibilities in ensuring conditions for the development of affiliate relations between enterprises in the textile industrial clusters would be clarified, from which requirements for the development of market economy and international integration could be met Research process Practiccal research Theoretical research Data collection and data analysis The thesis used a combination of data collection methods, both secondary and primary ones, atdesk research methods, survey using in-depth interviews with some leaders and experts of enterprises Secondary data were collected from the Statistical Yearbooks of the General Department of Statistics, Statistical Yearbooks of the provinces/cities in the Northern delta economic focal region, Reports of a number of textile enterprises in the region, websites of Vietnam Textile and Garment Group (VINATEX), Vietnam Textile and Apparel Association (VITAS), Textile Research Institute and a number of other textile corporations and companies Overview theories of the formation and development of textile industrial clusters Analyze and evaluate the current developing situation of textile industrial clusters in the Northern delta economic focal region Data collection on the development of textile industrial clusters in the Northern delta economic focal region Assess the needs, favorable conditions and difficulties in the formation and development of textile industrial clusters in the Northern delta economic focal region Primary data were collected from surveys, in-depth interviews with management staff of state agencies, 15 leaders of the textile enterprises in the region and the research on the current development of Ha Dong silk export industrial cluster and Pho Noi B textile industrial zone The content of the interview focused primarily on issues related to the needs, capabilities, advantages, disadvantages and conditions for formation and development of textile industrial clusters in the Northern delta economic focal region Recommendations and solutions for the development of textile industrial clusters in the Northern delta economic focal region Expected results Research theoretical framework Theoretical results Conditions: Accumulation of production; Affiliation; Support Industry; Infrastructure; Policies, etc Policy mechanisms… The needs for textile industrial clusters development: Relations in the value chain; Effectiveness; Competition; Innovations, etc The nature and characteristics of textile industrial clusters Based on the theoretical framework of business agglomeration and centralization in different territories and vertical and horizontal affiliate relations among the stages in the product value chain, the thesis clarifies the nature and basic characteristics of industrial clusters’ role in the sustainable and efficient development of enterprises in the product value chain The thesis also mentions five basic factors affecting directly the formation and development of industrial clusters: the agglomeration and centralization of territorial enterprises; the featured product value chain and the affiliate relations among businesses in the value chain; the development of supporting industry; the level of infrastructure development; concerning mechanisms and policies of the Government Solutions for the development of textile industrial clusters Practical results Current situation of textile industry in the Northern delta economic focal region Advantages Disadvantages Applying the basic theories on industrial clusters which matches the characteristics of the textile industry, the thesis first analyzes the current development of textile industry in the Northern delta economic focal region, then it digs deeper into the current situation of business agglomeration and centralization in different territories and vertical and horizontal affiliate relations among businesses and organizations in the value chain of textile products Therefore, the thesis has assessed the needs, favorable preconditions and difficulties hindering the development of textile industrial clusters in the Northern delta economic focal region On the basis of SWOT matrix analysis, the thesis clarifies scientific orientation of the formation and development of textile industrial clusters in the Northern delta economic focal region This orientation starts from the leading companies of the regional industry which are capable of widely developing the affiliate relations in the textile value chain, at the same time utilizes the advantages of Pho Noi B Textile Industrial Complex and clusters of textile traditional craft villages in each locality The thesis also proposes five main solutions to implement the identified orientation They are: To build up the regional textile industrial clusters planning; To promote the development of affiliate relations among businesses and regional concerning organizations; To promote the investment into the regional textile supporting industry; To synchronously renovate, upgrade and construct modern infrastructure in the region; To promote the role of the State management agencies and the Vietnam Textile and Apparel Association The research results of the thesis will be a source of useful references for textile enterprise managers and policy makers to develop the textile industry in the study of the textile industrial clusters development, promoting the advancement of effective and sustainable development of textile enterprises and contributing positively to the socio-economic development of the Northern delta economic focal region General conclusion of the thesis Besides the introduction, conclusion, references and appendices, the content of the thesis is divided into four chapters: Chapter 1: Literature review Chapter 2: Theoretical and practical rationales of the industrial clusters development Chapter 3: The situation of formation and development of textile industrial clusters in the Northern delta economic focal region new trade theory and geography of P Krugman, etc Domestically, related studies mainly systemize the idea of industrial clusters of foreign scholars, introduce international experience and suggest application orientation for the formation and development of industrial clusters in several economic sectors of our country From the results of the review, the following similarities can be shown as: The overseas and domestic works raised the basic aspects of the nature of industrial clusters Despite the different wording, the general idea of these authors are referring to the most critical characteristics of an industrial cluster which is: the agglomeration of industrial enterprises and organizations involved in a certain region; vertical or horizontal affiliate relations among entities; aims to ensure the effectiveness of each entity and contribute to improving the overall efficiency of the sector and the region These works clearly state that the product value chain is the primary premise of the formation and development of industrial clusters When entities of the sector are located in the same region, the affiliate relations will be created and transportation as well as transaction costs will be reduced Along with this, the agglomeration of relevant entities in a region is also a significant factor affecting the formation and development of industrial clusters The studies also point out the role of structural factors and of the Government, especially the local authorities to the formation and development industrial clusters Internal studies have focused on introducing foreign experience of the formation and development of industrial clusters in various sectors From which the studies introduced some valuable referencing lessons to Vietnam The lessons learned aimed at reviewing the role of the government and local authorities in the strategic planning and development planning of industrial clusters, supporting policies to promote the formation and development of industrial clusters in different sectors and regions Chapter 4: Recommendations and solutions to the formation and development of textile industry in the Northern delta economic focal region These similarities in industrial clusters is the basis for the author to inherit and develop his research in clarifying issues of industrial clusters theory It also is the basis for the use in the process of formation and development of industrial clusters so that it could match the characteristics of textile industry and characteristics of the Northern delta economic focal region CHAPTER 1: LITERATURE REVIEW Research gap and directions Overseas research Similarities in the works related to the thesis There have been some studies of domestic authors and foreign experts referring to the recommendations and solutions to the formation and development of industrial clusters in some economic sectors in Vietnam The selected research sectors are electronics, textiles, footwear, wood processing, mechanical, seafood processing, etc However, the new studies offered solely general and overall suggestions It can be seen from the overview of the study that the research on industrial clusters has been conducted for quite a long time The study comes from the requirement of associated relationships among economic entities within each region, each country which has formed certain theories, such as theories of industrial clusters and and M Porter’s competitive strategies, There have been a number of studies directly focusing on the formation and development of Vietnam's textile industrial clusters Nevertheless, these studies have only outlined the general idea of the need and role of textile industrial clusters in enhancing the efficiency and competitiveness of each company and the textile industry These studies have not clarified how Domestic research Conlusions withdrawn from the literature review the textile industry affects the formation and development of industrial clusters They have not yet evaluated the preconditions and difficulties hindering the formation and development of textile industrial clusters either None of recommendations and practical solutions to the formation and development of the textile industrial clusters in specific areas have been proposed No study has been done on the development of textile industrial clusters in the Northern delta economic focal region That means no study has clarified the needs, favorable conditions and difficulties of the region and of the textile enterprises in the region along with the formation and development of textile industrial clusters Since then, no research has been able to clarify any scientific foundation to determine the direction of the solution to the formation and development of textile industrial clusters in the Northern delta economic focal region It can be seen from the conclusions above that the study on “Developing textile industrial clusters in the Northern delta economic focal region” is necessary which has its significant theoretical and practical rationales and it does not coincide with any previous study published in Vietnam gathered in a geographic area and are connected by similarities and interdependencies The geographic scope of an industrial cluster could be a city or a single state, or a national or even a network of neighboring countries An industrial cluster takes many forms depending on its depth and the complexity, but it mostly includes several companies creating the last products or services; and suppliers of specialized inputs, components, machinery and service; financial institutions and businesses in related industries An industrial cluster also includes enterprises in the downstream sector; manufacturers of supplementary products; suppliers of dedicated infrastructure; the government and other organizations providing specialized technical training, education, information, research and assistance In addtion, one part of an industrial cluster could be seen as the state agencies which have a great influence Finally, many industrial clusters also include trade associations and other collective organizations of the private sector to support members in the clusters" 2.1.2 Basic characteristics of industrial clusters The author has carried out the research to: - The agglomeration of industrial enterprises and related organizations in a certain territory Inherite selectively previous studies to systemize and develop the basic theoretical issues on industrial clusters which are mainly the nature, role and characteristics of industrial clusters and the factors affecting the formation, development of industrial clusters - Industrial enterprises and member organizations of industrial clusters having mutual relationship in terms of content and level to some extent Identify the the needs, favorable preconditions and difficulties hindering the formation and development of the textile industrial clusters this economic region after having studied the characteristics and location of the Northern delta economic focal region, characteristics and role of the textile industry, the current situation and development of the textile industry in the region - The impact of the Government in the process of forming the operation mechanism of industrial clusters Suggest some scientific foundations to determine the direction of the formation and development of textile industrial clusters in the Northern delta economic focal region, the solutions that the textile enterprises and relevant entities and the Government management agencies, textile associations should take to promote the formation and development of textile industrial clusters in the Northern delta economic focal region - The diversity of entities in the industrial clusters 2.1.3 Roles of industrial clusters - To create a favorable investment environment for enterprises and relevant organizations - To enhance the technology capacity of enterprises, their access to technology market and technology transfer and innovation - Industrial clusters help companies to enhance their business image, branding and promotion - Industrial clusters support businesses to optimize their value chain and supply chain 2.1.4 Development evaluation of industrial clusters CHAPTER 2: THEORETICAL AND PRACTICAL RATIONALE ON THE DEVELOPMENT OF INDUSTRIAL CLUSTERS 2.1 Concept, characteristics and roles of industrial cluster 2.1.1 Concept of industrial cluster After analyzing the concepts of industrial cluster of several overseas and domestic authors, the author stated that the concept of M Porter showed the most nature of the industrial cluster The concepts introduced by domestic authors were basically based on the concept of M Porter The analysis of the Location Quotient - LQ allows the author to evaluate the formation possibility of industrial clusters based on the level of an industry’s concentration in the area This method assumes that if the more the labor and production of an industry are concentrated, the higher the ability of industrial clusters formation and development will be The degree of regional labour similarity is calculated by using the following formula: Therefore, in this thesis, the author has applied the concept of M Porter which is: "An industrial cluster is a group of related companies and institutions supporting one another in a specific field, In which, ei is the number of workers in the industry i in the area; e is the number of workers in all industries in the area; Ei is the number of workers in the industry in the country; E is the number of workers in all industries in the country; LQLD is the degree of regional labour similarity The development of supporting industries in the region will provide the basis to develop affiliate relations among organizations In contrast, the development of industrial clusters is the favorable factors promoting the development of the supporting industry due to the advantages of the connection between the upstream areas to the downstream sector in the territory If LQLD > 1: the area has a higher level of labour concentration than the national average level, meaning that the region is capable of developing the industrial cluster I and vice versa 2.2.3 Level of territorial industrial production agglomeration Besides LQLD, the LQ is also calculated based on the production value (LQGTSX) The formula is: In which, oi is the industrial production value of industry i in the area; o is the industrial production value of the whole industry in the area; Oi is the industrial production value of the industry in the country; O is the industrial production value of the whole industry in the country; LQGTSX is the degree of the similarity on industrial production value in the area If LQGTSX > 1: the area having higher level of the industrial production value of the industry i than the national average level, meaning that the region is likely to develop its industrial cluster and vice versa 2.2 Factors affecting the formation and development of industrial clusters The study of factors affecting the formation and development of industrial clusters in fact is to identify the motivating factors and hindering factors the oinfluencing the formation and development of this form of territorial production Therefore, the author has identified five groups of the following factors that influences the formation and development of industrial clusters 2.2.1 The complexity of the industrial product value chain Product value chain is the set of values that are generated from the stages of the manufacturing process of a product or service, from the development research, design, input supply, production, marketing and distribution to the final consumers If the value chain of a product is made in many countries on a global scale, then it is called the global value chain Product value chain requires both vertical and horizontal affiliate relations among organizations If the subject is distributed in a limited geographical space, the the relationships among organizations will be established more effectively 2.2.2 Development strategies for supporting industry Following of the process of technology production, companies in the supporting industry of the upstream sector and companies using the products of supporting enterprises to continue processing or to get them assembled into the final products the downstream sector During the development process, countries are paying attention to the development of supporting industries in the country and to the participation in global production networks Agglomeration is the process of concentrating production activities in a certain geographical area The new geographical theory of P Krugman is regarded as the theoretical basis to explain the distribution of industrial activities, in which the transportation cost factors and economic benefits of scale play important roles The proper production management and production increase to optimal levels, etc help enterprises reduce costs, improve quality and improve competitiveness This effect is called the intrinsic economic benefits of scale (Internal Economies of Scale) At the same time, the development of the related external activities has and impact on enterprises and help them to operate smoothly and effectively This effect is called the peripheral economic benefits of scale (External Economies of Scale) The concentration of some businesses, including the leading ones, in a certain geographical area will attract companies and organizations to invest in this area due to the benefits from reducing shipping expenditure, from which ensuring the inputs is much more convenient, etc This will promote the formation and development of industrial clusters 2.2.4 The development level of territorial infrastructure The economic and technical infrastructure system including the transportation networks, power supply networks, water and sewage networks, communications networks, waste treatment networks, etc is considered the basic precondition for the development of each company, each region and each country It was an opportunity to connect the country's economy with the economies in the region and with the global economy as well In the formation and development of industrial clusters, the development of economic and technical infrastructure system will create favorable conditions for the connection between businesses within a region and among regions with at the lowest cost 2.2.5 Government policies on the development of industrial clusters In order to become consistent with the Government’s role in the market economy, many policies on the development industrial clusters are widely ranging, such as the development-oriented policies in the planning of territotial industrial development, mechanisms and policies on investment and development of economic and technical infrastructure, policies to attract investment incentives, policies to promote investment in developing industrial clusters 2.3 International experience in the development of industrial clusters and lesson learned for Vietnam After introducing the experience of Malaysia, South Korea and China in the formation and development of industrial clusters, the author has drawn some lessons referring to the following: 10 Firstly, the role of industrial clusters needs being understood correctly as one of the solutions to develop effectively and sustainably the country’s industry in each region, each locality With the promotion of inherent comparative advantages, the Northern delta economic focal region has made great contributions to the development of the entire national economy Secondly, the autonomy of enterprises needs improving in promoting the agglomeration and concentration of production, the establishment of mutual relationship The role of the Government is shown through: planning of industrial clusters network within the country and in each territory; promulgation of policie supporting the development of industrial clusters; encouragement and support to the establishment and development of affiliate relations among economic entities in each territory 3.2 Current situation of the formation and development of textile industrial clustes in the Northern delta economic focal region Thirdly, the role and creativity of local government should be actively promoted and so the regional affiliate relations in the development of industrial clusters and their connections Fourth, the development policies of industrial clusters is linked with the support industry development policy That is one of the effective measures to develop the supporting industry CHAPTER 3: THE SITUATION OF FORMATION AND DEVELOPMENT OF TEXTILE INDUSTRIAL CLUSTERS IN THE NORTHERN DELTA ECONOMIC FOCAL REGION Table 3.1 The main economic indicators of the Northern delta economic focal region Area Population Density GDP value By economic sectors - Government - Non-government - Areas enjoyging direct foreign investment By industries - Agriculture, Forestry and fishery - Construction industry - Service The structure of economic activities - Agriculture, Forestry and fishery - Construction industry - Service GDP/person/year Exim value Đơn vị Km2 1000 người Người/km2 Billion dong % Million VND Million USD The textile enterprises in the region from all the economic sectors, from the state-owned enterprise VINATEX to the domestic private enterprises and enterprises with foreign investment The number of textile companies in the region accounts for over 26% of the country's textile enterprises and is widely located in all provinces, especially Hanoi, Hai Duong and Hung Yen (table 3.2) Table 3.2 The number of textile enterprises in localities Province/City Hà Nội Bắc Ninh 3.1 Overview on the Northern delta economic focal region Critetia 3.2.1 Overview of textile organizations in the Northern delta economic focal region 2011 15.599 14.501 929 439.799 2012 15.599 14.707 943 584.957 2013 15.599 14.910 956 686.851 2014 15.599 15.089 967 809.648 154.440 186.481 203.348 242.105 240.816 284.720 274.422 327.046 83.843 120.265 142.009 188.242 Vĩnh Phúc Hải Dương Hưng Yên Quảng Ninh Hải Phòng Tổng Enterprises Textile Apparel production Textile Apparel production Textile Apparel production Textile Apparel production Textile Apparel production Textile Apparel production Textile Apparel production Textile Apparel production 2011 262 420 25 33 21 12 27 85 18 61 7 16 72 376 690 2012 298 540 26 54 27 22 34 112 25 90 11 24 86 445 912 2013 353 565 28 52 25 26 28 115 28 99 11 28 87 498 955 35.850 201.436 191.535 46.321 276.283 248.069 50.259 318.648 305.314 52.875 384.779 335.855 Source: Collected from Statistical Yearbook 100,00 8,15 45,80 46,05 100,00 7,92 47,23 44,85 100,00 7,32 46,39 46,29 100,00 6,53 47,52 45,95 Table 3.3: The number of workers in the regional textile industry (person) 30,33 39,77 40,06 53,65 16.885,43 25.056,50 32.859,79 44.996,47 2014 364 635 28 49 28 27 34 128 32 107 10 31 89 527 1.044 The development of the industry has helped create more jobs for laborers The number of employees in the textile industry continued to increase (Table 3.3) Total Textile Apparel production 2011 197.282 30.866 166.416 2012 219.649 32.808 186.841 2013 230.020 30.918 199.102 2014 257.924 37.771 220.153 Source: Collected from Statistical Yearbook Textile industry has been identified as one of the key industries of the region with a high level of contribution in the total GDP of the region In 2011, the total production value of textile industry reached 33,683 billion VND, including textile production value reached 16,446 billion VND, Source: Collected from Statistical Yearbook 11 12 garment production value reached 17,237 billion VND; In 2014, the textile production value reached 56,150 billion, increasing 1.67 times, of which the textile one reached 23,243 billion VND, increasing 1.41 times, reaching 32,907 billion VND of garments, increasing by 1.91 times Products of the textile industry is one of the main export items of the region Currently, this item is ranking the second on the export value, followed by the phone items Table 3.5 Situation of textiles exports in the region (US $ million, %) Criteria The total value of regional exports (US $ million) Textile export value (US $ million) The proportion of textile exports (%) 2011 16.885 2.533 15,01 2012 25.056 2.994 11,95 2013 32.859 3.122 9,51 2014 44.996 3.654 8,12 The actual research shows that, textile industrial clusters have not yet built up in the Northern delta economic focal region, but there are only signs only which show the possibility of this kind of regional production Therefore, in this section, the author will focus on great contents: potential formation and development of regional textile industrial clusters; current relationship among textile entities On that basis, favorable preconditions and difficulties hindering the formation and development of textile industrial clusters in the Northern delta economic focal region will be shown 3.2.2.1 Assessing the potential formation and development of textile cluster in the Northern delta economic focal region Coming from the characteristics of the textile industry and basing on the factors affecting the formation and development of industrial clusters mentioned in Chapter 2, in this section the author will focus on presenting two fundamental elements showing potential development of industrial clusters at the local textiles in this area: (1) the agglomeration degree of local businesses in the territory through LQ criteria analysis; (2) The relationship among textile enterprises, the concerning regional organizations by analyzing the relationship among relevant entities in the implementation of the textile value chain The location quotient indicator (LQ) LQLĐ indicators: Based on labor figures of industrial enterprises of textile and industrial labor, LQLĐ indicators calculation results are summarized in the table 3.6 Table 3.6 LQLĐ index of provinces and cities in the region in 2012 Provinces Bắc Ninh Hà Nội Hải Dương Hải Phòng Provinces Hưng Yên Quảng Ninh Vĩnh Phúc LQLĐ 1,79 0,05 0,85 Source: Calculations were based on data from the statistics of provinces or cities LQGTSX indicators: Using the same basis as shown in the calculation of the LQLĐ indicator, the LQGTSX indicators calculation results for the textile industry of the city in the Northern delta economic focal region demonstrated in table 3.7 Table 3.7 LQGTSX index of provinces and cities in the region in 2012 3.2.1 Current situation of the formation and development of textile industrial clusters in the Northern delta economic focal region No No LQLĐ 0,59 0,73 1,65 - No Provinces Bắc Ninh Hà Nội Hải Dương Hải Phòng Hưng Yên Quảng Ninh Vĩnh Phúc LQGTSX 0,08 0,68 0,87 0,78 0,92 0,16 0,21 Source: Calculations were based on data from the statistics of provinces or cities It can be shown from the two indicators of LQLĐ and LQGTSX that the textile industry in the Northern delta economic focal region has achieved the certain level of agglomeration It is an important prerequisite for the establishment and development of the textile industrial clusters in the upcoming time Especially the high concentration of textile industry in the two provinces of Hung Yen and Hai Duong has created the basis of the formation and development of textile industrial clusters in these two provinces for the time ahead In comparison with Hanoi, the number of textile enterprisese of the two provinces is lower, though there are more favorable conditions to ensure the production sites and the distance to the port of Haiphong which is the commodities export gateway of the province in the North Moreover, in the future, Hanoi has advocated focusing on developing high-tech industries and shift the textile enterprises to neighboring provinces Consequently, the textile industry of this province will be growing stronger in the future It could be assumed that the formation of textile industrial clusters in the Northern delta economic focal region has had supportive premise due to the increasingly powerful process of production agglomeration and concentration However, the increase in the level of textile production agglomeration and concentration and other related activities is just the required prerequisite The more important thing is how to organize collaborative relationship and connection between the textile enterprises and concerning organisations 3.2.2.2 The affiliate relations among textile busineses in the Northern delta economic focal region 13 14 In the Northern delta economic focal region, various stages of textile value chain are performed by different industrial enterprises and other entities The thesis presents the essential level of the links among other entities in the textile value chain Product design, product manufaturing technology and of labour resources training Product design and product manufaturing technology is the starting point/stage which plays the most important role in the textile value chain Its mission is designing styles and appearance for the new product and new materials in order to meet the changing tastes of different customer types in different markets In fact, due to the limited capacity of the Textile Institute (directly under VINATEX) and other big textile enterprises, they are unable to take care of the product design product manufaturing technology Moreover, since the main method applied is the outward processing due to mainly perform export machining methods (Cut-Make-Trim and Freight-on-board), then the design of the products and technology deployed are mainly externally imported Materials production The rapid development of the textile industry in the Northern delta economic focal region posed a huge demand for raw materials and textile accessories Although the Government has promulgated some mechanisms and policies to encourage the development of textile supporting industries, however their performance has been still unsound The local textile enterprises still mainly rely on raw and auxiliary materials imported, the majority of which are from China Chart 3.4: Total textile exports and fabrics imports in the Northern delta economic focal region (Billion USD) Currently, a lot of garment enterprises of different various economic sectors are developing rigorously in the Northern delta economic focal region currently Large garment enterprises in the region under VINATEX are equitized and transformed into joint stock companies under the Government which possess 50% of charter capital and have been operating as affiliate companies of VINATEX The local textile enterprises in the region have completely been equitized Many domestic and overseas private investors are attracted into the apparel industry, however unfortunately the majority of them are still small and medium-scale ones With the implementation of CMT and FOB methods, the affiliate relations among garment enterprises in the region are not only horizontal but also even more competitive in order to win orders from abroad The vertical affiliate relations among enterprises producing raw materials are also very limited due to orders coming or designated from foreign firms Product commercialization In recent years, textile companies have paid more attention to the domestic market The consumption of these products are made according to main channels: 1/ Direct sales to consumers through showrooms and product consumption in enterprises and in big cities; 2/ Indirect sales to consumers through the dealers and networks with supermarkets and commercial centers Over the past few years, May 10 Corporation, Duc Giang Corporation and Dap Cau Garment Joint Stock Company, etc are units which achieved the most positive results in the consumption of products in the domestic market The export market of the regional textile enterprises is primarily EU, USA and Japan However, most of these enterprises are still mainly applying the CMT method to export and are gradually converting to FOB level and level Due to the limitations on the international marketing ability, they have not yet built up strong brands themselves, therefore the proportion of garments export using the ODM method of these companies is lower than of other enterprises in the Northern delta economic focal region Thus, in the product commercialization in the domestic market, the affiliate relations between garment enterprises and trade organizations in the country are also sluggish; In the international market, the relations between these organizations and large distribution companies has almost not established yet Source: General Statistics Office of Vietnam Generally, affiliate relations among enterprises producing garments materials are still unsteady There are three basic causes leading to this situation: (1) The domestic scale of fabrics manufacturing and other garment accessories production is lower than the demand of garment enterprises; (2) Domestic raw materials’ types, quality and production costs can not meet the needs of garment enterprises; (3) The majority of garment export enterprises deploy the processing method for foreign firms The analyzed content above on the affliliate relations between businesses and concerning organizations in the implementation of the various stages of value chain in the textile industry in the Northern delta economic focal region is summarized in the diagram 3.6 According to the diagram, the textile companies and other concerning organizations in the Northern delta economic focal region are likely to establish their affiliate relations in the product value chain However, due to the unequal and heterogeneous capacity of value chain and the processing method, the level of association among the stages are divided unequally 3.3 General assessment of favorable preconditions and limitations in the formation and development of textile industrial clusters in the Northern delta economic focal region Cutting and sewing 15 16 3.3.1 Favorable preconditions Firstly, the technology process of textile production requires entities to be formed to develop towards specialization, following by the need of their affiliate relations development Despite the simple structure of the textile product and simple technology process, they include several stages in which each stage has its own complex and multiple manufacturing processes Textile businesses in this industry are often organization in the form of specialized technology, which means each company will implement one or several stages of the garment production technology process (a chain or some chains of product value chain will be made) Vertical or horizontal affiliation relations are indispensable requirements of every business Therefore, the formation and development of regional textile industrial clusters will create favorable conditions for the establishment of affiliate relational between textile enterprises and concerning entities Chart 3.6: Relations between businesses and organizations in the textile value chain of the Northern delta economic focal region Materials production (Supporting enterprises) Spinning, weaving - Accessories - Packaging Research and training (Institute/ University) Technology and product research - Human resources training tailoring has the strongest capacity and units being responsible for product design and technology manufacturing has the weakest capacity Moreover, the agglomeration of units in the region reached a comparatively high level, especially in Hanoi, Hai Duong and Hung Yen These are favorable preconditions for the formation of textile industrial clusters, promoting the development of vertical and horizontal affiliate relations among these economic entities Thirdly, the Northern delta economic focal region possesses a synchronized infrastructure systems which is being developed in the modernization direction Despite its low level of development compared to the general requirements, the infrastructure system in the Northern delta economic focal region is considered more developed than other economic regions The system of roads, railways, deep-sea ports, international airports is being renovated and upgraded towards modernization in the area The electricity supply networks, telecommunication infrastructure and irrigation as well as water supply system are also invested in order to meet the requirements of the production development and people’s living standards raising The development of infrastructure system create positive conditions for the development of affiliate relational among economic enterprises in the textile industry of the region, which is an indispensable premise for the establishment and development of textile industrial clusters Fourthly, the sprout of establishment of territorial production organization is the nature of the textile industrial clusters Product commercialization Domestic market (direct, indirect) - Exporting market (CMT, FOB, ODM, OBM) Product commercialization -Consumers Sewing (garments companies) Clothes - Jackets - Vests - Knitted garments, etc In addition to the small industrial clusters in the traditional textile craft villages, typically the industrial complex of Van Phuc Silk (Ha Dong district, Hanoi), and the most obvious example of the "infancy" of textile industrial clusters in this economic region is Pho Noi B textile industrial zone Having a synchronous infrastructure system, this industrial zone have attracted a series of textile enterprises and supporting enterprises of textile industry internally and externally Initially, these businesses have established affiliate relations with the textile enterprises in the region It might be seen that this industrial zone is the fundamental nucleus for the formation of textile industrial clusters in the near future Lastly, guidelines and policies of the Government on the formation and development of industrial clusters in general and textile industrial clusters are being determined more clearly Source: Designed by the author Secondly, almost entities (units) in the textile value chain are formed synchronously in the Northern delta economic focal region That includes the product designing and technology manufacturing units; materials producing units (cotton, woven fabrics, zipper, thread, mex and packaging, etc.), garment units, scientific research and specialized human resources training units In this system, the units taking care of 17 Following the general guidelines outlined in the document which was stated in the Eleventh Party Congress (2011) about the strategy and planning development of textile industry dated 01.13.2015, the Prime Minister issued Decision No 32/QD-TTg approving "The program of synchronously developing and upgrading industrial clusters and value chains of products with competitive advantages such as electronics and information technology, textiles, food processing, agricultural machinery, tourism and related services." The decision has precisely stated the objectives, tasks and solutions of the program In summary, the Northern delta economic focal region had experienced the predisposing factors contributing to the formation and development of textile industrial clusters However, those 18 factors have not really been comprehensive and synchronous as the development process should be a continuing process which complements for this premise so as to meet the utmost requirements for establishing and developing textile industrial clusters 3.3.2 Limitations and main reasons Firstly, there is no unity in people’s awareness of industrial clusters in general and textile industrial clusters in particular In our country, the study of new industrial clusters has only really began in the early 2000s and in the actual implementation is still in the pilot stage of research In such conditions, the absence of unity in cognition, even without understanding, about industrial clusters is inevitable There have been different explanations from many experts of research institutions and policymaking bodies about the nature, characteristics, impacting factors and conditions for the formation of industrial clusters At the micro level, the form of industrial clusters is completely considered new for the majority of enterprise management However even without a full knowledge or incomplete understanding about industrial clusters, administrators of businesses are still aware of the connection in the value chain and the selection of partners in the same territorial space will be more favorable and more effective Nevertheless, due to some objective and subjective reasons, the affiliate relations between businesses and organizations have not been established Secondly, the partnerships and affiliate relations among textile enterprises and between them with relevant organizations are still fragmented and ineffective The vertical affiliate relations between the units of the downstream sector (garment companies) with units of the upstream sector (Supporting companies) are underdeveloped due to the weakness of the upstream sector in meeting requirements of the downstream region on types, quantity, quality, price and time supplying all kinds of materials The horizontal affiliate relations between the businesses operating in the same field, mainly cutting and sewing, have almost not been established, because these enterprises primarily implement processing methods for foreign firms (using CMT, FOB level and level 2) These companies even compete with one another to win overseas orders Currently, Vietnam's garment enterprises are carrying out the production stage with the lowest value added in the global textile value chain (Chart 3.8) Thirdly, the textile supporting industry has not yet developed The root causes of this weakness stems from the mechanism of the Government policy which has not offered enough motivation to attract both domestic and overseas investments Although the Government policies strongly advocate the development of supporting industries to develop effectively and sustainably the country’s industry, the relevant policies are not yet clearly expressed in the investment incentives, and difficulties are also found in securing for investors access to these incentives That not only prevents the development of textile supporting industry from commensurating with the requirements, but also leads to the development imbalance between the downstream sector enterprises (garment companies) and the upstream enterprises in the region (textile supporting industry) In current conditions, standing from the perspectives of investors, the investment in the garment field is more attractive than in the supporting industry sector: total investment, low investment, the complex in production technology and business risks are lower This situation has led to limited ability to establish textile industrial clusters as it lessens the ability to establish the vertical affiliate relations in the textile value chain Fourthly, there are no specific mechanisms and policies to encourage and support the development of textile industrial clusters The policy of forming industrial zones in some sectors and a number of economic areas is newly stated in Decision No 32/QD-TTg dated 13/01/2015 by the Prime Minister It is an important precondition for the formation and development of regional textile industrial clusters in the Northern delta economic focal region But, as mentioned above, from the promulgation of mechanisms and policies to their implementation in our country there is often quite a big gap Yet Decision stipulates the responsibilities of the Ministry of Industry and Trade in collaboration with the Ministry of Finance, Ministry of Planning and Investment and the People's Committees of provinces and cities, however from the provisions of this mechanism to the development of common policies implemented in each sector, each economic area and each locality is too much to and to coordinate between relevant agencies That's what can not be done in a short time CHAPTER 4: RECOMMENDATIONS AND SOLUTIONS TO THE FORMATION AND DEVELOPMENT OF TEXTILE INDUSTRY IN THE NORTHERN DELTA ECONOMIC FOCAL REGION 4.1 Recommendations for the development of textile industry and textile industrial clusters in the Northern delta economic focal region 4.1.1 Development context 4.1.1.1 International context - Tendency of the textile industries movement from industrialized countries to developing countries, including Vietnam Source: Designed by the author basing on the Smile Curve Theory of Stan Shih 19 20 - Textiles demand is constantly increasing in number, diversified in designs and styles demanding on the limit of time supplying to the market - Enterprises taking care of cloth spinning and weaving are developed in Dinh Vu Industrial Complex (Hai Phong) and Hai Ha Industrial Complex (Quang Ninh) - The establishment of the Free Trade Agreement (FTA) with the major economies, especially the Agreement on the Trans-Pacific Partnership (TPP) has created opportunities, however at the same time increased the fierceness in the global market competition - Enterprises manufacturing garment accessories (sewing thread, zippers, mex, packaging, etc.) are developed in Hung Yen and Hai Duong 4.1.1.2 Internal context 4.1.3 SWOT matrix for the formation and development of textile clusters in the Northern delta economic focal region - The textile industry has been identified as one of the key industries in the industrial development strategy to accelerate the period of industrialization and modernization - The signing of the new FTA generation and the recently, the negotiations on the TPP has brought tremendous opportunities and also posed severe challenges to our country's textile industry - The outstanding advantage of the Northern delta economic focal region on traditional productions, geographical location, quantity and quality of human resources, infrastructure and facilities - techniques available, etc creates favorable conditions for the growth of textile industry 4.1.2 Direction of development Direction of market development Regarding the domestic market: all garment enterprises throughout the country strives to improve their competitiveness, to diversify their products’ stylish design, to improve the quality and lower the product cost, to diversify the marketing channels in order to master the domestic market Regarding the foreign market: to strengthen and develop the current traditional export markets (US, EU, Japan), striving to penetrate the high-end market segment, to expand market of TPP member countries The development direction of different stages in the textile value chain - To develop garment enterprises towards modernization, equipping them the capacity to produce enough product categories to meet the needs of various market segments - To promote the development of textile supporting enterprises, firstly focusing on spinning, weaving, sewing production, zippers and packaging - To focus on the development of product design and prototyping, supporting services in investment for textile enterprises, especially logistics The development direction of technology Development towards a modern, efficient and sustainable direction The development direction basing on territorial space - Hanoi focuses on developing fashion trends 21 - The garment enterprises are now widely developed in all localities in the region On the basis of the content mentioned above, the author synthesized SWOT matrix for the formation and development of textile industrial clusters in the Northern delta economic focal region Table 4.1 SWOT matrix with the formation and development of textile industrial clusters in the Northern delta economic focal region STRENGTHS (S) (1) A long tradition of development; high agglomeration level of textile enterprises and related organizations (2) Textile enterprises, supporting industries and institutions of scientific research and technology, training facilities, etc are in different stages of the textile value chain, creating the premise establishing affiliate relations vertically and horizontally (3) Favorable geographical location; with synchronous infrastructure and investment priorities which are rehabilitated, upgraded and constructed in the new modern direction (4) The garment and textile supporting industry há been identified as the key industry of the region, enjoying more investment incentives and high attractiveness for investors at home and abroad (5) The Government has issued policy guidelines to develop the textile industrial clusters and garment industry was selected pilot to form the industrial clusterwith the assistance of international organizations OPPORTUNITIES (O) (1) The shift tendency of textile industry from industrialized countries creates WEAKNESSES (W) (1) People are not fully aware of the importance of industrial clusters, leading to difficulties in the research of issuing policies and implementation in practice (2) The vertical and horizontal affiliate relations among entities responsible for different stages of the textile value chain have not been widely established efficiently and sustainably (3) Tailoring is the strongest stage but having the lowest added value and economic efficiency which depends on foreign countries because it mainly performs the processing methods Product design, prototyping, production of textile materials and product commercialization are the most fragile stages in the textile value chain (4) The Government policies on industrial clusters are not clear; no specific plan was carried out as a basis for cooperation between authorities and the local government sector in the implementation THREATS (T) (1) The competitiveness of the textile sector is less advanced; the affiliate relations 22 handsome opportunities to promote the advantages of the region to develop robustly the textile industry (2) Demand for textiles in the market is constantly increasing while the local textile enterprises are step by step taking their positions in the market and gaining the confidence of consumers and overseas firms who give orders (3) The international economic integration is deeper with the signing of the FTA and TPP, creating tremendous opportunities for the garment industry of Vietnam on the market expansion, receiving foreign investment, transferring of technology and improving management skills (4) The sharing experience of organization establishment, industrial clusters developing and operating from successful countries in the application of models to organize production according to the territory While confirming the tremendous role of industrial clusters in the development of textile industry towards sustainability and enhancing business performance of the textile enterprises in the Northern delta economic focal region, it also should be clear that this is a very complicated problem The formation and development of textile industrial clusters requires careful steps with the preparation of the basic conditions needed to avoid impatience and subjective imposition between enterprises of textile and related organizations are very unstable, ineffective and unsustainable (2) Too much ependence on foreign countries, mainly due to the implementation of the processing methods and supporting industry underdevelopment, the weak designing capacity and international marketing; Having joined the network of global textile production, yet the industrial clusters have not participated in the stage of commercialization and distribution of garments in the international market (3) It is compulsory to comply with strict constraints related to textiles in the FTA and TPP; existing large gap in development levels between our country and the partner countries (4) No specific policy mechanisms of the formation and development of textile industrial clusters; existing large distances from the policy to the implementation in practice With the above content combined, it it necessary to improve the establishment of the textile industrial clusters, taking Pho Noi B Textile Industrial Zone as the center surrounding by enterprises under VINATEX as nuclears in the upcoming future 4.2 Solutions to the formation and development of textile industrial clusters in the Northern delta economic focal region 4.2.1 Construction planning of the textile industrial clusters network in the region The construction and implementation of textile industrial clusters network planning in the Northern delta economic focal region should focus on the following principles: Firstly, textile industrial clusters network planning needs to be suitable to the regional development planning in the country's garment sector, the overall planning of socio-economic development and industrial development planning of this economic region Secondly, regional textile industrial clusters network planning needs to be suitable to the characteristics of textile value chain, promoting the agglomeration and centralization of production and affiliate relations among the concerning entities Source: Synthesized by the author Based on this matrix, recommendations for the establishment and development of textile industrial clusters in the Northern delta economic focal region should be kept in mind as follows: SO combination (pursuing opportunities in line with the strengths): taking advantages of the development opportunities (textile industry shift from developed countries, participation in the new FTAs generation, especially TPP, etc.) on the basis of maximize the strengths and favorable conditions (in terms of agglomeration and centralization of production of textile enterprises, the ability to establish favorable relations vertically and horizontally between businesses and organizations in the region; infrastructure development; asking for help from the Government authorities at all levels) Thirdly, the scope of the territorial space of each textile industrial cluster should be identified clearly in the overall textile industrial clusters network of the Northern delta economic focal region Fourthly, regional textile industrial clusters network planning also needs to take into account the neighboring provinces whose thriving textile industry, notably Nam Dinh and Thai Binh 4.2.2 Promotion of the development of affiliate relations among textiles enterprises in the region Vertical development of affiliate relations It is the relationship among the entities associated to different implementation stages of the textile value chain: product design, technology, prototyping, cutting – sewing, and product commercialization WO combination (taking advantage of opportunities to overcome weaknesses) and ST combination (using the advantages, strengths to reduce the risks caused by outsiders): bringing into a full play the positive impact of the FTA and TPP, promoting technological innovation, improving the level of production, developing supporting textile industry, shifting from outsourcing to direct exports; enacting and implementing policies and mechanisms to promote the formation and development of relations among enterprises in the textile value chain; specifying and implementing the policy mechanisms to encourage and support the formation and development of textile industrial clusters In order to develop this type of affiliate relations, the key issues to be addressed are: (1) To develop the supporting industry so that it could afford to meet the needs of tailoring businesses about the types, quantity, quality, cost and time; (2) To change the method of processing gradually from a low level to a higher level and eventually to a full-service export including product design; (3) To select and build up the "strategic partnership" with commercial firms whose prestigious market position is well-known internally and externally; (4) To actively participate in trade promotion activities in both domestic and overseas markets to promote the 23 24 brand and search for trading partners; (5) To increase investment for building and promoting the brand Ministry of Science and Technology, etc The Ministry of Industry and Trade appoints a Deputy Minister to be in charge of the supporting industry of key industries Horizontal development of affiliate relations At the local level, the local governments, directly as provincial and district level, apply preferential mechanisms and policies to encourage the development of supporting industries that the government issued in accordance with the specific conditions of the locality, along with investors to address in time difficulties arose in the process of investment licensing and implementation of investment activities With the current level of development and prospects for the future development, horizontral affiliate relations include: - To share foreign orders whose large quantities and short implementation period which go beyond the capacity of each individual enterprise - To collaborate and negotiate with foreign firms on the processing conditions, especially on unit prices and raw material supply order fulfillment - To exchange the market information with foreign partners, notably the experience of technological innovation and production management - To promote the ability and the role of large textile enterprises to support small and medium enterprises in the training and improving the quality of human resources - To coordinate with each other in making recommendations for the Government authorities to amend and supplement mechanisms and policies related to the development of the textile industry, then to remove difficulties for enterprises 4.2.3 Investment attraction for supporting textile industry development assistance in the region The key issues to be addressed are: Firstly, take the supporting textile industry is one of the key areas prioritized in the guideline of industrial development in the Northern delta economic focal region during the period of 2016 2020 Since then, it has been essential to develop a national target program on supporting industry development period 2016 - 2020, which clearly defined objectives to be achieved, progress and implementation solutions, responsibilities of the Government agencies concerned, the involvement of the industry associations and investors Secondly, complete the motivational policies for the development of textile supporting industry The general spirit is that we apply at the highest level of the mechanism of investment incentives stipulated in the 2015 Law on Investment: To encourage and support the development of the market; to encourage and support infrastructure; to encourage and support science and technology innovation, human resource training; to provide information about markets and partners, preferential policies and financial support 4.2.4 Renovation, upgrading and construction of new infrastructure in the region In order to contribute to the formation and development of textile industrial clusters, it is necessary to ensure favorable conditions for development and business investment, the rehabilitation, upgrading and construction of new infrastructure systems in the Northern delta economic focal region need to focus on the following key tasks: To promote the progress and ensure the quality of the work to renovate, upgrade and build new transport infrastructure (including roads, railways, waterways, ports and sea barriers of international aeronautical ports) To ensure the transportation system connection among localites in the region, among regions and between internal regions with external ones To tie the development of traffic infrastructure with the techniques and facilities development of logistics services In the infrastructure development of power supply, the general requirements to be achieved are: to ensure that the quality and reliability of electric power supply to be increasingly improved; to develop the transmission grid to be synchronous with the progress of power plants; to enhance the power grid to be consistent with the socio - economic development of regions and localities in the region The development of telecommunications infrastructure towards the modern trends will help the Northern delta economic focal region become the country's largest center of economy, finance and trade in the Southeast Asia which is the geographical bridge to integrate and economically cooperate more effectively with the regional countries The development of telecommunications infrastructure in the region take Hanoi capital to be the center of motivating and supporting the Northern Provinces 4.2.5 Promoting the role of the Government and Textile Association Promoting the role of the Government Thirdly, focus on the implementation mechanism of preferential policies to encourage investment in the development of textile supporting industriy - To identify and affirm consistently the policy on the formation and development of industrial clusters along with a number of key industries in the region, including the textile industry On a national scale, along with the construction of the national target program on the development of key supporting sectors period 2016 - 2020, the Steering Committee held by a Deputy Prime Minister will include the Ministry of Industry and Trade, Ministry of Finance, - To construct the planning network of textile industrial clusters with scientific arguments so that it could be consistent with the country’s planning network in the textile industry and in the overall planning of socio-economic development of the region 25 26 - To issue and implement policies and mechanisms supporting the formation and development of industrial clusters which are integral parts of the industrial policy system The content of this policy mechanism can be incorporated in other directly relevant policies (for example, the industrial clusters development policies are integrated in the supporting industry policies, considering the industrial clusters development a way to promote the development of the supporting industry in a centralized way) This thesis is done with an attempt to solve one of the basic and urgent problems of developing the textile industry in the Northern economic focal region With this thesis, the author has completed the following major tasks: - To assign and coordinate smartly among agencies in the government management system at all levels in building and directing the implementation of development policies of industrial clusters Also, it is necessary to pay attention to the coordination among the local authorities because the territorial space of an industrial cluster is not normally confined within the administrative boundaries of each locality Secondly, to introduce some experiences of developing industrial clusters of several countries in the region (Malaysia, China and Korea) on the formation and development of industrial clusteres, including textile industrial clusters, from which gaining precious lessons for Vietnam - To perform the combination of unified management by sectors, localities and by territories in the whole country Specifically, the cooperation between the Ministry of Industry and Trade with the People's Committees of provinces under the Central in the development of the textile industry and the formation and development of textile industrial clusters Promoting the role of Vietnam Textile and Apparel Association (VITAS) To improve the effectiveness of dissemination and propagation of textile industrial clusters and benefits that each company and organization can gain from joining textile industrial clusters, as well as the mechanism of preferential incentives policy for firms and for the participating organizations in textile industrial clusters To collect opinions from members about the construction and implementation of mechanisms and policies supporting and encouraging the formation and development of industrial clusteres in order to make recommendations to the competent Government management agencies To be a bridge connecting members in setting up affiliate relations vertically and horizontally To provide types of business consulting services, trade promotion services, construction services and brand promotion, training services and fostering human resources, organizing fairs and exhibition internally and externally Firstly, to systemize and develop the theory of industrial clusters, which mainly clarifies the nature, characteristics, roles and the factors affecting the formation and development of industrial clusters Thirdly, to analyze comprehensively the situation of formation and development of textile industrial clusters in the Northern delta economic focal region; to identify favorable preconditions and difficulties hindering the formation and development of textile industrial clusters in the region Fourthly, to propose measures and solutions to promote the formation and development of textile industrial clusters in the Northern delta economic focal region The basic solution is to build the textile industrial clusters planning network in the region; to develop affiliate relations vertically and horizontally among the textile enterprises; to develop textile supporting industry; to invest in renovating, upgrading and building new infrastructure systems and modern synchronization; to promote the role of the Government and Textile Association The above research results have the referential value to the businesses and policy making organizations in the research one of the problems of the textile industry in general and the textile industry in the Northern economic focal region in particular However, as the research topic is quite new and more complicated, the study results could not avoid certain restrictions, which are: the main contents are presented in the form of qualitative data, no calculations and specific quantitative analysis is available; although the investigation interviews ensure the representativeness, the number of samples have not been ample and fully used in the analysis of the thesis CONCLUSION Textile is one of the key industries of the Northern economic focal region In recent years, the textile industry has contributed positively into the socio-economic development of the country and the region Under the new conditions, the international economic integration has given the textile industry tremendous opportunities and stiff challenges as well Textile industry restructuring is required and the urgent necessity to take advantage of opportunities and overcome challenges, contributing to the development of textile industry effectively and sustainablly In this process, the formation and development of textiles industrial clusters in the Northern economic focal region is one of the important tasks 27 28 [...]... combined, it it necessary to improve the establishment of the textile industrial clusters, taking Pho Noi B Textile Industrial Zone as the center surrounding by enterprises under VINATEX as nuclears in the upcoming future 4.2 Solutions to the formation and development of textile industrial clusters in the Northern delta economic focal region 4.2.1 Construction planning of the textile industrial clusters. .. network in the region The construction and implementation of textile industrial clusters network planning in the Northern delta economic focal region should focus on the following principles: Firstly, textile industrial clusters network planning needs to be suitable to the regional development planning in the country's garment sector, the overall planning of socio -economic development and industrial. .. comprehensively the situation of formation and development of textile industrial clusters in the Northern delta economic focal region; to identify favorable preconditions and difficulties hindering the formation and development of textile industrial clusters in the region Fourthly, to propose measures and solutions to promote the formation and development of textile industrial clusters in the Northern delta economic. .. to the development of the textile industry, then to remove difficulties for enterprises 4.2.3 Investment attraction for supporting textile industry development assistance in the region The key issues to be addressed are: Firstly, take the supporting textile industry is one of the key areas prioritized in the guideline of industrial development in the Northern delta economic focal region during the. .. content mentioned above, the author synthesized SWOT matrix for the formation and development of textile industrial clusters in the Northern delta economic focal region Table 4.1 SWOT matrix with the formation and development of textile industrial clusters in the Northern delta economic focal region STRENGTHS (S) (1) A long tradition of development; high agglomeration level of textile enterprises and... which are integral parts of the industrial policy system The content of this policy mechanism can be incorporated in other directly relevant policies (for example, the industrial clusters development policies are integrated in the supporting industry policies, considering the industrial clusters development a way to promote the development of the supporting industry in a centralized way) This thesis is... attention to the coordination among the local authorities because the territorial space of an industrial cluster is not normally confined within the administrative boundaries of each locality Secondly, to introduce some experiences of developing industrial clusters of several countries in the region (Malaysia, China and Korea) on the formation and development of industrial clusteres, including textile industrial. .. the Northern delta economic focal region Fourthly, regional textile industrial clusters network planning also needs to take into account the neighboring provinces whose thriving textile industry, notably Nam Dinh and Thai Binh 4.2.2 Promotion of the development of affiliate relations among textiles enterprises in the region Vertical development of affiliate relations It is the relationship among the. .. Association The above research results have the referential value to the businesses and policy making organizations in the research one of the problems of the textile industry in general and the textile industry in the Northern economic focal region in particular However, as the research topic is quite new and more complicated, the study results could not avoid certain restrictions, which are: the main contents... attempt to solve one of the basic and urgent problems of developing the textile industry in the Northern economic focal region With this thesis, the author has completed the following major tasks: - To assign and coordinate smartly among agencies in the government management system at all levels in building and directing the implementation of development policies of industrial clusters Also, it is necessary