Solutions to improve labor productivity in processing and manufacturing industries

According to experts, it is necessary to have a strategy to develop more suitable processing and manufacturing industries to improve labor productivity of this sector.

According to the General Statistics Office, there has been a significant improvement in labor productivity over the years and being the country with a high rate of labor productivity growth in the ASEAN region, however, the labor productivity of Vietnam is still very low compared to many countries in the region.

Specifically, labor productivity of Vietnam is only 7% of Singapore’s labor productivity; equal to 17.6% of Malaysia; 36.5% of Thailand; 42.3% of Indonesia; 56.7% of the Philippines and 87.4% of the Lao’s labor productivity. Notably, the gap in labor productivity between Vietnam and other countries continues to increase.

Also according to the General Statistics Office, the labor productivity of the whole economy in Vietnam at prices in 2017 is estimated at 93.2 million VND/employee, equivalent to about 4,159 USD/labor. Calculated at comparative prices in 2010, the total labor productivity in 2017 increased by 6% compared to 2016, the average period of 2011-2017 increased by 4.7%/year.

In particular, processing and manufacturing industry saw a strong growth of 13.56% (the highest increase in the last 7 years), contributing significantly to GDP growth in the first quarter.

However, according to Dr. Luong Van Khoi, Deputy Director of the National Center for Socio-Economic Information and Forecasting (NCIF), it is necessary to promote domestic industrial enterprises in association with the development of industries based on specific calculation of labor productivity, especially processing and manufacturing industries.

 “Vietnam needs to have a strategy to develop more suitable processing and manufacturing industries. Particular attention should be paid to groups of industries with high labor productivity and high labor productivity growth rates as food processing and manufacturing industries; Production of tobacco products and metal production.

At the same time, it is necessary to have appropriate strategies to promote the industries with low labor productivity but with a high rate of labor productivity growth, such as the groups of manufacture of electronic products, computers and optical products; Production of beds, wardrobes, tables, chairs; Manufacture of other means of transport in the 2007 economic classification system.

In order to get the development strategy of manufacturing and processing industry, it is necessary to separate which sectors have high labor productivity, because the growth of the economy depends greatly on the general labor productivity of the economy and each industry.

In order to promote labor productivity of the manufacturing and processing industry in the previous periods, the growth rate was only 2.4%, but this group of industries contributed significantly due to the improvement of the scientific and technical intervention. However, the performance of enterprises in this group is low and there is a decline.

To further promote this field, it is necessary to improve the business environment more strongly. It is necessary to improve the operational efficiency of enterprises, especially internal intrinsic factors such as converting machinery and equipment as well as labor qualification and management level.

Productivity and Quality Office