Employers working to adapt to modern tech trends

In a survey conducted by recruiters Navigos Group Vietnam with more than 200 domestic and foreign businesses and over 3,200 candidates, 81% of candidates and 86% of employers said their companies had implemented up to 70% of automated manufacturing processes.

On shifting to automation, both candidates and employers agreed that new technologies of the 4.0 era had made a positive impact. Common answers included “automation increases labour productivity” and “automation is inevitable for manufacturing firms.”

Around 65% of employers surveyed invest in machines, 44% have made changes in management and operations, 41% have invested in data systems, 39% equipped employees with new skills, and 21% have employed candidates with relevant knowledge.

Nguyen Tao Chuyen, director of NTC Vietnam JSC in Hanoi, told VIR that he recently spent US$100,000 on new software on corporate administration, and the same sum on installing a modern US-style production chain to package fruit and vegetables, the company’s key products. “Sooner or later we have to invest in these things if we want to succeed,” Chuyen said. “Investment will help us save about 30 per cent of working time and a great deal of production costs.”

Kobayashi Ryutaro, senior representative of the Vietnam Office of the Japan International Co-operation Agency (JICA), told VIR, “More investment into automation and skills will help improve competitiveness and productivity of Vietnamese businesses in particular and of the whole Vietnamese economy in general.”

According to the General Statistics Office, the economy’s labour productivity rose by 5.29% in 2016 and 6 per cent last year.

“As the recipient of foreign direct investment (FDI) from manufacturing nations such as Japan and the Republic of Korea, Vietnam has great opportunities to catch onto leading trends of the era including digitalisation and automation,” said Gaku Echizenya, chairman and CEO of Navigos Group Vietnam. “At the same time, 4.0 technologies present new obstacles for businesses to improve our manpower.”

According to Echizenya, manufacturing in Vietnam has remained one of the leading industries with highest potential for economic growth. However, unless action is taken to incorporate new tech, the country risks losing its attractive profile.

The Navigos survey revealed that blue-collar workers are most affected by automation. Some 70% of both candidates and employers believed automation would strongly affect these workers.

Two months ago, the World Economic Forum launched a survey of 64,000 citizens of the ASEAN, including 11,000 from Vietnam, on how tech will impact the youth.

The rate of Vietnamese youth believing that technology would increase the number of jobs is 51.5%, lower than the 54% in Indonesia and 60.3% in the Philippines (see chart).

About 1.6 million new people enter Vietnam’s ­domestic labour market each year, a big burden for the government to provide ­sufficient employment. This is ­expected to grow further when Industry 4.0 rises, with robots and hi-tech believed to replace a great deal of ­workers, especially manual labourers.

Ousmane Dione, the World Bank’s country director for Vietnam, said, “Over the past two decades, Vietnam has successfully inserted itself into select global value chains while achieving a remarkable reduction in poverty. In the years ahead, disruptive technologies will present both challenges and opportunities for remaining on this successful trajectory.”