Dr. Bui Thanh Minh, deputy director of the Private Sector Development Research Board (Board IV) Office. Photo courtesy of Doanh nhan Saigon (Saigon Entrepreneurs) magazine.

Vietnam is entering a pivotal stage of development, where the requirement to sustain high growth must go hand in hand with improving growth quality, economic autonomy, and resilience. The goal of achieving double-digit growth over the coming decade is not merely a policy direction but an objective necessity to narrow the development gap, escape the middle-income trap, and lay the foundation for industrialization and modernization amid intensifying global competition.

However, traditional growth drivers - such as low-cost labor, natural resource extraction, capital expansion, and assembly-based manufacturing - are gradually losing their effectiveness. In this context, future growth must be driven by productivity, science-technology, innovation, digital transformation, and a strong domestic business sector. This places an urgent demand on the formation of enterprises and economic groups with large scale, modern technology, and global and regional competitiveness to lead strategic industries and generate spillover effects across the economy.

Leading economic groups, ultimately, are not merely large in terms of capital, assets, or revenue. More importantly, they must possess the capability to organize large-scale production, master or effectively absorb technology, expand markets, connect satellite firms, lead value chains, and establish new standards in governance, innovation, and productivity. An economy seeking to break through and reach high-income status cannot rely solely on a fragmented base of small enterprises with limited accumulation capacity; behind every successful takeoff phase lies the presence of strong domestic firms capable of playing a leading role.

In Vietnam, this orientation has been consistently reflected in major Party resolutions in recent years, notably Resolution No. 57-NQ/TW (December 22, 2024) on breakthroughs in science, technology, innovation, and national digital transformation; Resolution No. 68-NQ/TW (May 4, 2025) on private business sector development; and Resolution No. 79-NQ/TW (January 6, 2026) on state business sector development.

A common thread across these policies is the need to rapidly build a cohort of medium and large enterprises, develop economic groups with international competitiveness, and at the same time leverage the role of the state sector in strategic, foundational industries and critical technological domains related to national economic security. Resolution 68-NQ/TW targets at least 20 large private enterprises participating in global value chains by 2030, while Resolution 79-NQ/TW aims for 50 state-owned enterprises to rank among Southeast Asia’s top 500 and 1-3 to enter the global top 500 by 2030.

The core issue, therefore, is no longer whether to develop leading economic groups, but how to establish a development-oriented institutional framework and resource allocation mechanism capable of fostering truly competitive, technologically capable, and value-chain-leading enterprises that can compete on equal footing in regional and global markets. In other words, developing leading economic groups is not a standalone policy objective but a central component of transforming the growth model and enhancing national competitiveness in the new growth era.

East Asian experience in developing leading enterprises

South Korea, Japan, Singapore, Taiwan (China), and Hong Kong (China) are often referred to as the “Asian Tigers” - economies that achieved rapid industrialization, sustained high growth over decades, and gradually moved into the high-income group (World Bank, 1993; Harvard University, 2009; Page 1994; ADB, 2020). While their development paths differ, a common structural feature emerges: breakthroughs were driven not only by market liberalization or capital accumulation, but by a combination of export-oriented strategies, the rise of globally competitive domestic enterprises, and the State acting as a development enabler

First, these economies adopted export-oriented growth as the central engine of industrialization. Deep integration into international trade not only expanded market scale but also created competitive pressure, driving technological upgrading, productivity, quality, and governance capability. It was within this competitive environment that domestic firms matured, accumulated capabilities, and moved up the global value chain.

Second, behind East Asia’s rise lies the presence of large domestic enterprises capable of organizing large-scale production, leading technological innovation, expanding markets, and diffusing capabilities to the broader business sector. In South Korea, chaebols such as Samsung, Hyundai, LG, and SK became the core drivers of industrialization and national competitiveness. In Taiwan (China), despite a more balanced structure between large firms and SMEs, leading technology firms emerged that control key nodes in global supply chains. This experience underscores that no country has successfully advanced without building a strong domestic enterprise base capable of leading key industries.

Third, the role of the State in East Asian economies was not to replace markets but to enable development - through strategic prioritization, resource coordination, investment in infrastructure and human capital, targeted support, and the enforcement of market discipline. The State did not merely “open the way” institutionally but also imposed continuous upgrading pressures via competition, export discipline, technological standards, and efficiency requirements. A key lesson is that developing leading enterprises does not mean administrative favoritism or privilege; rather, it must involve selection, support, and filtering based on performance, innovation capacity, and international competitiveness.

From East Asia’s experience, three key lessons can be drawn for Vietnam. First, to escape the middle-income trap, Vietnam must continue pursuing export-oriented growth but on a higher value-added, technology-intensive, and deeply localized basis. Second, Vietnam must build a cohort of domestic enterprises and economic groups with global and regional competitiveness, capable of leading in technology, markets, and value chains. Third, the State must act as a development enabler - designing institutions, coordinating resources, and fostering a competitive environment in which firms grow through real capability rather than privileged access.

In other words, the most important lesson is not simply the need for “large firms,” but the creation of a healthy development structure - one that is layered, complementary, and dynamic - where large, medium, and small enterprises, alongside public institutions, operate within a strategically guided, disciplined ecosystem capable of continuously upgrading national competitiveness.

Beyond East Asia, international experience also highlights the critical role of leading firms as hubs of research, development, and technological innovation. These firms enhance product quality, strengthen global competitiveness, reshape industrial and export structures, and generate strong spillover effects through knowledge transfer, supplier linkages, and labor mobility. During economic downturns, large firms tend to be more resilient, acting as stabilizers that mitigate unemployment and productivity losses. They also play a central role in boosting overall labor productivity, typically creating more jobs, paying higher wages, and contributing more significantly to productivity growth than smaller firms.

VinFast factory in Hai Phong city, northern Vietnam. VinFast is an EV manufacturer under Vingroup, Vietnam's largest private company by market cap Photo courtesy of Hai Phong's news portal.

Bottlenecks in forming leading enterprises in Vietnam

Despite notable achievements in growth, integration, and enterprise development, Vietnam has yet to build a sufficiently robust enterprise structure to generate globally and regionally competitive leading firms. The core bottleneck lies not only in the lack of large firms but in the absence of a dense, interconnected, and capable enterprise system that supports progression from small to medium, from medium to large, and from large to leading firms.

First, Vietnam’s enterprise structure remains fragmented, with micro and small firms dominating. As of December 31, 2023, according to the Vietnam Business White Paper 2025, micro and small enterprises accounted for 67.1% of all firms, while large enterprises made up only 2.7%. Although the number of active firms exceeds 940,000, those reaching regional or global competitiveness remain limited. This is reflected in Vietnam having only 76 firms in the 2025 Fortune Southeast Asia 500 and eight in the 2025 Forbes Global 2000.

More critically, Vietnam lacks a “missing middle” - a layer of medium-sized firms capable of scaling up and linking smaller firms to larger value chains. This results in a wide base but a thin middle, disrupting scale accumulation, capability upgrading, and the emergence of leading enterprises over time.

Second, the current pool of large enterprises is not aligned with the requirements of the new growth model. Many are concentrated in real estate, finance, and banking, or sectors reliant on domestic market advantages. Vietnam still lacks large enterprises with outstanding competitive capabilities in high-tech industries, advanced manufacturing, foundational industries, and high value-added sectors, limiting its ability to lead technological upgrading and value chain restructuring.

In the VN30 ETF portfolio for Q1/2026, the financial sector accounted for 40% of the portfolio weight and had 15 out of 30 companies in the basket, while the real estate sector accounted for 14% with three out of 30 companies; the remaining sectors were quite thinly distributed, with many sectors having only one or a few companies present.

Third, Vietnam’s export success reveals a structural paradox: while the country has a highly open economy with large export volumes, most exports and trade surpluses are driven by the foreign-invested sector. In 2025, exports reached $475.04 billion, with domestic firms accounting for only 22.7% ($107.95 billion), while FDI firms contributed 77.3% (including crude oil, $367.09 billion). Domestic firms recorded a trade deficit ($29.43 billion), while FDI firms generated a large surplus ($49.46 billion). This indicates that export performance does not fully reflect the strength of domestic enterprises, which remain concentrated in low value-added segments. In many processing and manufacturing industries, domestic enterprises still mainly participate in low value-added stages, while higher value-added links continue to be concentrated primarily in the FDI sector.

Fourth, Vietnam’s productivity and technological base remain below the requirements of a high-income economy. Labor productivity in 2025 reached approximately $9,809 per worker, comparable to Indonesia but significantly below Malaysia, Thailand, and especially Singapore. R&D spending remains low at around 0.4% of GDP, and Vietnam lacks globally leading innovation clusters, highlighting gaps in both technological capacity and enterprise structure.

Fifth, access to medium- and long-term financing remains a major constraint. According to the World Bank’s 2023 Enterprise Survey, 21% of firms identified access to finance as a major obstacle, higher than the average of the East Asia and Pacific. Beyond large or highly rated firms, most Vietnamese enterprises face difficulties in securing long-term capital for technology investment and expansion. Domestic capital markets remain underdeveloped, and funding instruments for innovation, high-tech industries, venture investment, and strategic industries are limited.

In sum, while Vietnam’s enterprise sector has expanded rapidly in number, it has yet to form a sufficiently strong structure to nurture and select leading firms. Without addressing these bottlenecks, Vietnam will struggle to develop the enterprise base needed to drive industrialization and modernization, upgrading its position in the global value chain and realizing the goal of high and sustainable growth in the coming period.

Unlocking and mobilizing rresources for leading economic groups

Vietnam is entering the early phase of “Doi moi 2.0.” A series of major Politburo Resolutions issued in 2025 have set the national strategic direction, while 2026-2030 is designated as the implementation phase. In this context, policies for developing leading economic groups must be treated as a central pillar of the national development strategy in the new period. The issue is no longer about supporting a few businesses to expand, but about creating a class of businesses and corporations that are large enough, strong enough, and self-reliant enough.

First and foremost, breakthroughs must begin with institutional reform. A healthy environment for leading enterprises cannot be formed if property rights are not fully guaranteed, freedom of business is still restricted by administrative barriers, and compliance costs remain high due to the overlapping, fragmented, and inconsistent nature of the legal system.

Institutional reform must aim to establish a transparent, stable, and predictable framework in which enterprises grow through competitiveness, innovation, and efficiency - not through privileged access or administrative connections. Legal frameworks must also enable resource concentration through market mechanisms, which is essential for building firms in industries that require high capital, advanced technology, and a long-term investment vision.

At the same time, developing domestic capital markets must be a strategic priority to address resource constraints. A strong economy cannot rely solely on short-term financing; it requires a multi-layered financial system, including equity markets, corporate bonds, private equity, venture capital, and funds for science, technology, digital transformation, and strategic industries. For nationally significant breakthrough projects, the State should act as a “market maker,” designing risk-sharing mechanisms to attract private investment into high-impact but uncertain sectors.

Another key priority is to place science, technology, innovation, and digital transformation at the core of strategies to develop leading economic groups. In a knowledge-driven global economy, large firms without technological mastery, R&D capability, intellectual property, or control over high-value segments cannot play a leading role. Therefore, criteria for leading enterprises must shift from “large in asset, big in revenue” to “strong in technology, innovation, and ecosystem-building capability.” This is also a way to ensure that the development of key economic groups does not follow the old, outdated path of large-scale development, but actually becomes a driving force for upgrading the economy.

Furthermore, it is necessary to redefine the roles of the state and private sectors within a mutually supportive development structure. The state sector should focus its resources on key, strategic areas and foundational technologies or those of national economic security significance.

Meanwhile, the private sector needs to be given the conditions to become a pioneering force in innovation, technology commercialization, market expansion, and international integration. When properly positioned and connected by a rational institutional framework, these two sectors can create synergistic strength, forming a national business structure that is both broad and deep, possessing both defensive and breakthrough capabilities.

Equally important is the design of effective value chain linkages. Leading enterprises must not operate as isolated “islands” but as hubs connected to networks of SMEs, research institutions, universities, and innovation centers. This is essential for increasing localization rates, enhancing technology absorption, and retaining more value domestically. Public procurement can support this process but must be designed transparently and competitively.

Ultimately, the development of key economic groups can only be effective when coupled with a strategic selection of priority sectors and fields. Vietnam cannot spread its resources thinly across all sectors, but needs to focus on a few strategically important areas for long-term growth, technological upgrading, and increasing the self-reliance of the economy. This selection must be based on dynamic comparative advantages, market potential, technological absorption capacity, spillover effects, and strategic significance for national competitiveness.

Finally, the development of leading economic groups must be aligned with strategic sector selection. Vietnam cannot spread resources across all industries but must focus on sectors with high long-term growth potential, technological upgrading capacity, and strategic importance. In this sense, leading enterprises are not an end in themselves but a tool to restructure the economy toward greater modernization, innovation, autonomy, and global competitiveness in the new growth era.

In an increasingly volatile global environment - where traditional globalization is slowing and strategic competition intensifies - strengthening domestic capacity is more urgent than ever. Alongside fostering leading enterprises, policies must also nurture the SME ecosystem. In other words, it is necessary not only to “build nests for eagles” but also to ensure wide and open fields for “sparrows.” Only with such a structure - where large firms lead, SMEs diffuse growth, and the State enables development - can Vietnam build a sufficiently strong enterprise foundation for a new growth model.