Hai Duong socio-economic picture in the first 6 months of 2024. Last article: Business development faces difficulties

Total number of businesses decreased

According to the Department of Planning and Investment, in the first half of 2024, the province had 827 newly established enterprises with a total registered capital of VND 6,928 billion, an increase of 4.2% in quantity and 1.3% in capital over the same period last year. Meanwhile, during the same period, the province had 1,071 dissolved and inactive enterprises, an increase of 14.3%, but only 362 enterprises registered to resume operations, a decrease of 37.1% over the same period in 2023.

In 2023, Hai Duong recorded positive business development with more than 1,800 newly established enterprises with a total registered capital of about 15,000 billion VND and 1,000 enterprises resuming operations, exceeding the set target.

In the first 4 months of 2024, newly established enterprises in Hai Duong also increased in both quantity and registered capital. According to the Department of Planning and Investment, in the first 4 months of 2024, the whole province had 650 newly established enterprises with a total registered capital of VND 5,817 billion, an increase of 6.9% in the number of enterprises and 9.3% in registered capital compared to the same period last year. During this period, enterprises in the province developed 226 more branches and representative offices and 279 enterprises resumed operations.

However, in May and June, the province's business development slowed down. In 2024, Hai Duong continues to set a target of increasing the number of newly established businesses by 15%. However, comparing data shows that in the first 6 months of 2023, Hai Duong had 20,820 operating businesses, while in the same period of 2024, the number decreased to 20,586. This shows that the number of businesses established and returning to the market is lower than the number of businesses ceasing operations and dissolving. This is a worrying reality, affecting the province's business development target in 2024.

In addition, the potential for new business development from business households in Hai Duong is huge, but in recent years the province has not effectively exploited this advantage. In 2024, Hai Duong only set a modest target of having 50 business households convert into enterprises. But in the first half of the year, only 16 business households converted into enterprises. Business households are "afraid to grow" due to many objective and subjective reasons. In addition to vague knowledge about business administration, the support of all levels and sectors is still vague. On the other hand, when converting to an enterprise model, business households are forced to be professional in matters of procedures, invoices, production, business, labor, taxes, etc. Therefore, many households are "afraid" to develop into enterprises.

Solution

Hai Duong is assessed by the Vietnam Federation of Commerce and Industry (VCCI) as one of the localities that facilitates business entry into the market. In two consecutive years 2022 and 2023, the province ranked fourth in the country and first in the Red River Delta in terms of market entry index. This is an important index among the 10 component indexes of the Provincial Competitiveness Index (PCI). However, this is only a necessary but not sufficient condition for stable and sustainable business development.

In recent times, Hai Duong has had many mechanisms and policies to support newly established enterprises and brought initial results. However, these policies are still not strong enough to promote the development of newly established enterprises. Most of the new policies only focus on supporting procedures and documents, so few enterprises register to benefit. There are support regimes that have to follow complicated procedures, thus not encouraging enterprises.

According to the Department of Planning and Investment, the number of newly established enterprises depends largely on external factors such as the investment environment, consumer market, regional economic situation, etc. On the other hand, most enterprises need support in the production and business process because of difficulties and problems that will arise during this period. Therefore, "input" support will not be effective, especially when administrative procedures in the field of business registration are increasingly simplified. Therefore, departments and branches need to have the right and accurate support mechanisms to encourage the spirit of entrepreneurship. Thereby creating favorable conditions for business development in the area.

Another big issue is building a multi-industry development ecosystem, focusing on specific fields and strengths so that businesses can rely on each other and exploit the advantages of other businesses to develop together.

The number of newly registered enterprises is one of the 15 socio-economic development targets set by Hai Duong in 2024. This is also an issue that has a decisive impact on the province's long-term and sustainable economic development. Based on the current state of enterprise development in the first 6 months of the year, in the coming time, the province needs to have a synchronous and comprehensive solution to remove this bottleneck. Not only should the province pay attention to assessing the number of newly established enterprises, but specialized agencies and local authorities must also analyze the number of dissolved and re-operated enterprises to have appropriate development orientations.

Hai Duong is building a new business development support mechanism to replace the old policy that is no longer suitable. To ensure the feasibility and effectiveness of the policy, in addition to the legal basis, the advisory agency has consulted the development support mechanism in a number of other localities for flexible application. From there, a satisfactory policy is built to meet the needs and aspirations of newly established businesses. In particular, attention is paid to support in corporate governance, human resource development, digital transformation, etc. to help young businesses gain more "resistance" and adapt quickly to the market. At the same time, it limits the situation of businesses dissolving and suspending operations.