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Innovation in Developing Countries pp 23–51Cite as

Product and Process Innovation of Micro, Small and Medium Manufacturing Enterprises in Vietnam

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Abstract

Innovation promotion is relatively new to the Vietnamese society. It took several decades to develop the science, technology and innovation system and to gradually shift the science and technology strategy towards innovation . This chapter examines the factors driving product and process innovation of manufacturing micro, small and medium enterprises (MSMEs) . We employ the SME surveys from 2005 to 2015—conducted every 2 years in ten cities and provinces—to create unbalanced panel data with 7399 observations and apply the probit model for the study. The findings suggest that firm experience in innovation and accumulated knowledge are crucial for future innovation ; human capital of both entrepreneurs and employees (upper secondary and higher level education) and social capital are important for innovation ; SMEs are apt to be more innovative given that they have higher capital intensity (production technology ) or face intense competition; uncertainty of public policies and insufficient policy implementation are hindrance to innovation . Consequently, there is a need for improving the education and training system, including reinforcement of higher education, enhancing the inter-firm linkages and firm-research institute-university cooperation, and providing effective innovation incentives and support for enterprises.

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Notes

  1. 1.

    ASEAN stands for ‘the Association of Southeast Asian Nations’ and includes ten member countries: Cambodia, Brunei Darussalam, Indonesia, Laos, Malaysia, Myanmar, Singapore, the Philippines, Thailand and Vietnam.

  2. 2.

    According to Brundenius et al. (2016, p. 41), Chris Freeman was Director and founder of the Science Policy and Research Unit, University of Sussex, and Bengt-Åke Lundvall was with Aalborg University in Denmark.

  3. 3.

    For more details, see CIEM et al. (2013, 2014).

  4. 4.

    The 2005 data are employed to generate lagged variables.

  5. 5.

    In this context, product innovation may be a product with a slightly different design.

  6. 6.

    Basic statistics of micro firms are not shown in the text. However, they are available upon request.

  7. 7.

    In Tables 2.3 and 2.4, this variable is called ‘percentage of professional employees’.

  8. 8.

    VSIC is the Vietnamese Standard Industry Classification.

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Author information

Authors and Affiliations

  1. National Centre for Socio-Economic Information and Forecast, Ministry of Planning and Investment, Hanoi, Vietnam

    Trang Thi Thu Pham

  2. Kobe University, Kobe, Japan

    Nobuaki Matsunaga

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  1. Trang Thi Thu Pham
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  2. Nobuaki Matsunaga
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Correspondence to Trang Thi Thu Pham .

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Editors and Affiliations

  1. Kobe University, Kobe, Japan

    Nobuaki Matsunaga

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Pham, T.T.T., Matsunaga, N. (2019). Product and Process Innovation of Micro, Small and Medium Manufacturing Enterprises in Vietnam. In: Matsunaga, N. (eds) Innovation in Developing Countries. Kobe University Monograph Series in Social Science Research. Springer, Singapore. https://doi.org/10.1007/978-981-13-3525-9_2

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  • DOI: https://doi.org/10.1007/978-981-13-3525-9_2

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