10:45 (GMT +7) - Tuesday 27/06/2017

Business

No escape

Released at: 08:54, 17/05/2017

No escape

Photo: Viet Tuan

The fourth industrial revolution is coming and Vietnamese enterprises simply must give it due regard.

by Hong Nhung

The Global Industry 4.0 Survey, the largest research of its kind and conducted last year by PricewaterhouseCoopers (PwC) on over 2,000 companies in nine major industrial sectors from 26 leading countries, revealed that companies expect Industry 4.0 to reduce operational costs by 3.6 per cent per year while increasing efficiency by 4.1 per cent annually. Automation has already, in fact, been changing global manufacturing for some time and Vietnam has also been subject to its effects. The country’s major corporations have been looking at applying advanced technologies and replacing their human workforce with machinery and robots in certain industries, to raise productivity, reduce production time, and optimize labor costs.

Mr. Isara Burintramart, Managing Director of Reed Tradex, ASEAN’s leading exhibition organizer, underlined the increasing dynamism of Vietnam’s industry. “Vietnam’s manufacturing has been moving away from the traditional portfolio into higher value-added products,” he said. “We have seen growth and changes in industries we serve throughout the past ten years, and the changes and the growth will certainly continue, especially now that we are all living in the digital age and are moving towards the ‘Industry 4.0’ era.”

Much concern

The development of the fourth industrial revolution, or Industry 4.0, along with increasing perfection in robotics production driving global industry towards robotics and automation, is the future but also a concern for many enterprises. A survey conducted by VET recently on more than 2,000 SMEs that are members of the Vietnam Association of Small and Medium Enterprises, found that 85 per cent expressed concern with Industry 4.0. Of these, 55 per cent believed it would have a significant effect on Vietnam’s economy, 23 per cent believed its impact would be moderate, 11 per cent believed it would have no major influence, 10 per cent said it would have no impact, and the remaining 6 per cent had no idea.

In terms of strategy, it is notable that up to 79 per cent of respondents said they haven’t done anything to prepare for Industry 4.0. Fifty-five per cent said they have been seeking information or conducting research, while 19 per cent have set up plans and only 12 per cent have actually been implementing strategies. 

Sixty-seven per cent of respondents believed they would not be overly affected by Industry 4.0, 56 per cent believed their business sector would not be overly impacted, and 76 per cent said they didn’t understand the nature of Industry 4.0. More than a half (54 per cent), said they didn’t believe they needed to care about it. Nevertheless, another quick survey conducted at the CEO Forum held by VET last month revealed that 67 per cent of participants and enterprises present believe that Vietnam cannot catch up with this industrial revolution and only 33 per cent were optimistic about the prospects of keeping pace with it. 

According to Mr. Ngo Van Tuan, Deputy Head of the National Assembly’s Economic Committee, in terms of business manufacturing, Industry 4.0 allows enterprises a greater degree of freedom and flexibility in their production. The boundaries between traditional industries and between industrial and non-industrial appliances will fade. “Industry 4.0 will contribute to redefining the value chain in business models as a result of a complex and connected manufacturing network,” he said. “At the same time, the human workforce will require interdisciplinary thinking, social skills, and other technical skills.” 

Concern among interested smes about industry 4.0 

Source: VET survey 2017

Preparation needed

Industry 4.0 is considered a transformation, not an overnight change, so enterprises need to actively prepare their resources. South Korea’s Doosan Vina, one of the largest overseas manufacturing conglomerates, has been planning and preparing their human resources and production facilities for this revolution in recent years. In investing $300 million and employing 2,500 staff during its decade in Vietnam, the company has recruited and trained its staff and its equipment