Nguyen Hong Long Regional coordinator 1

Economy Society Environment Vietnam LaosCambodia 2

Current situation Economy: – Strength Physical position Advantages of posterior country Advantages of developing country – Threat: Low competitiveness Lack of skillful labor Dependence on exported materials Being vulnerable: No brand, being dependent on intermediaries … 3

Current situation Society: – Strength: Stability Rather high human development index – Threat: Creating jobs for increasing labor force Inequality in income and increasing economic gaps between urban and rural areas Low awareness about customer’s rights and product quality commitment 4

Environment: – Being stressed by economic growth, urbanization and population increase – Environmental sustainability is being threatened 5 Current situation

Vietnamese enterprises have the highest optimistic level about business expectation in 2010 (Business Week) Should Vietnamese enterprises be optimistic? 6 Current situation

Sector specific problems Furniture: – Raw materials: import 80%, – rocessing: quality, working conditions, chemicals overuse – Huge potential: handy, hardworkingness, materials and products, abandon domestic market 7

Sector specific problems Handicraft: – Raw materials: harvest, pretreatment, transportation – Processing: quality, working conditions, chemicals overuse – Low commitment and short-sighted vision – Huge potential: craftsmanship, hardworkingness, unique technique, materials and products 8

Sector specific problems Food processing: – Raw materials: good quality, good productivity, but overuse of chemical fertiliser and pesticides: coffee, cacao, pepper, rice, tea, cashew nut – Processing: quality, working conditions, chemicals overuse – Products: Very marginal profit – Huge potential: biggest potential for Vietnam, competitive edge for Cambodia 9

Sector specific problems Footwear and garment (fashion): – Raw materials: 80 – 99% import – Processing: working conditions, big social problem: a lot of job created, together with highest abortion, etc – Products: Very marginal profit – Considerable potential: domestic market, niche market 10

CP4BP Focusing on raising awareness Some achievements: -Participating experts: 28 -Pilot companies: 7 -Number of new/redesigned products: 74 11

Product innovation capability Enterprises: – Mostly satisfy with selling raw materials and processing according to international orders – Few enterprise owns product development capacity – Insufficient awareness about product innovation 12

Government and authorities: – Lack of strong and coherent policies – Lack of attention in product innovation Training system and human resources: No training program (both official and unofficial) on product innovation. No product innovation job. Product innovation capability 13

Pressure From consumers on Sustainable products From development demand: From width to depth From Government: From price support to directing Competition among companies Green Marketing Demand and motivation 14

Demand and motivation SPIN: Upscaling and promoting product innovation Current situation CapacityDemand 15