Hanoi (VNA) - Domesticsmall and medium-sized enterprises (SMEs) should regard tech-driven innovationsand digitisation as a guiding development trend when integrating into theglobal production and value chain.

Nguyen Hoa Cuong, deputy director of the  EnterpriseDevelopment Department under the Ministry of Planning and Investment, made thisremark at a seminar themed “Digitising the Vietnamese Economy: Empowering SMEsfor the Global Market” held in Hanoi on April 18.

The event, organised by the US-ASEAN Business Council (US-ABC) andthe Vietnam Chamber of Commerce and Industry (VCCI), attracted 180 SMEsoperating in many business sectors. They heard experts from multinationalcompanies discussing new policies, experiences, tools and solutions to enhanceSMEs’ capacity in exploiting the potential of the growing digital economy, sothat they can participate more effectively in the global supply chain.

Sunil Singh, Chief Information Officer of the Coca-Cola CompanyBottling Investments Group, said businesses could not develop withoutinnovation, adding that Coca-Cola was devoting one-third of its capital totech-driven innovation, with a focus on automation, digitisation and artificialintelligence.

“If firms don’t apply automation, digitisation to their businessmodels, they will have a hard time competing with their rivals and will soon beeliminated from the market," said Singh, adding that digitaltransformation was a strategic priority.

Regarding supply chain management, Frank Weiand, General Directorof Supply Chain Services International, said the supply chain cost in Vietnamaccounted for 20 percent of GDP and may grow to 25 percent in the next comingyears, much higher compared to Laos, Thailand and China. “If businesses reduceabout 10 percent of the supply chain cost, they can save 1.5 to 2 percent ofGDP,” Weiand said.

He added that production costs of Vietnamese enterprises were 20 percenthigher than those of neighbouring countries, such as Thailand and China,because Vietnamese enterprises were not yet well integrated in theinternational supply chain in terms of procurement, operations and sales. Theywere also behind in the application of international standards to improvequality and production capability, and were disadvantaged due to the delayedimplementation of the ASEAN economic blueprint.

Improvement of quality management systems and manufacturingprocesses can increase efficiency by up to 40 percent and reduce costs.Optimisation of procurement processes offers cost reduction potentials of over20 percent, Weiand said.

During the seminar, representatives from Microsoft, MasterCard andother companies also shared their experiences in fields such as cloudtechnology, digital payment and business regulation.-VNA