In the context of international integration and fierce competition, improving and promoting labor productivity is the decisive factor in […]
In the context of international integration and fierce competition, improving and promoting labor productivity is a decisive factor in the competitiveness of the economy and of each enterprise; is a matter of survival for developing countries like Vietnam
Increasing steadily but still very low compared to other countries in the region
According to the General Statistics Office, in Vietnam, social labor productivity is an indicator of the National Statistical Indicator System (stipulated in the Law on Statistics), calculated as average GDP per working worker during the year. This calculation is completely consistent with international practice.
In recent times, Vietnam's labor productivity has continued to improve significantly in the direction of increasing steadily over the years and is a country with a high labor productivity growth rate in the ASEAN region.
Specifically, with economic growth in 2018 reaching 7.08%, labor productivity of the entire economy at current prices in 2018 is estimated to reach 102.2 million VND/worker (equivalent to 4,521 USD/worker); calculated at comparative prices, an increase of 6% compared to 2017. On average in the period 2016-2018, labor productivity increased by 5.77%/year, higher than the average increase of 4.35%/year in the period 2011-2015. In the period 2011-2018, labor productivity increased on average by 4.88%/year.
It can be said that labor productivity increasingly plays an important role in economic growth. If in the period 2011-2015, average GDP growth reached 5.91%/year, of which labor increased by 1.5%/year; increased labor productivity reached 4.35%/year, then in the 3 years 2016-2018, although labor increased only 0.88%/year, labor productivity reached an average growth rate of 5.77%/year, 1.42 percentage points higher than the previous period, so GDP grew at an average rate of 6.7%/year.
According to purchasing power parity (PPP 2011), Vietnam's labor productivity in the period 2011-2018 increased on average by 4.8%/year, higher than the average growth rate of many countries in the region. Thanks to that, Vietnam has narrowed the relative gap with ASEAN countries with a higher level of development. However, Vietnam's current labor productivity level is still very low compared to other countries in the region, notably the absolute gap continues to increase. This shows that the Vietnamese economy will face huge challenges in the coming time to catch up with the labor productivity levels of other countries.
Agriculture, forestry, and fisheries: Lowest among the regions
Statistics show that the mining industry has the highest labor productivity because this is a unique industry, the value of mining products includes the value of natural resources; Next is the production and distribution of electricity, gas, hot water, and gas; real estate business activities; Finance, banking, insurance…
Construction industries; processing and manufacturing industry; transportation and warehousing; wholesale and retail; Accommodation and food services generally have low labor productivity. Agriculture, forestry and fisheries are the sectors with the lowest labor productivity among economic sectors.
Specifically, in recent years, Vietnam's agricultural, forestry and fishery production has made strong developments. This is the area with the highest average labor productivity growth rate of 5.2%/year in the period 2011-2018, higher than the average growth rate of the industrial and construction sector (3%/year) and the service sector (3.1%/year).
However, the agriculture, forestry and fishery sector has a very low level of labor productivity, the lowest among economic sectors, by 2018 at current prices it reached 39.8 million VND/worker, only equal to 38.9% of the labor productivity of the entire economy, equal to 30.4% of the labor productivity of the industrial and construction sector, equal to 33.7% of the service sector...
Industry, construction, services: Not as expected
The industrial and construction sector accounts for a large proportion of the economy in terms of scale, but the labor productivity of this sector has not clearly demonstrated its key role in promoting rapid growth.
In 2018, labor productivity of the industrial and construction sector at current prices reached 131 million VND/worker, 1.3 times higher than the general labor productivity, an increase of 47.4 million VND/worker compared to 2011, of which labor productivity in the industrial sector reached 154.1 million VND/worker, an increase of 55.4 million VND/worker; Construction industry reached 75.7 million VND/worker, an increase of 27.2 million VND/worker.
According to comparative prices, labor productivity of the industrial and construction sector in 2018 increased by 4% compared to the previous year, on average in the period 2011-2018 increased by 3%/year, of which labor productivity in the industrial sector alone in 2018 increased by 4.5%, the average in the period 2011-2018 increased by 3.1%, the average in the period 2016-2018 increased 1.83%/year.
Thus, without strong and breakthrough changes, the target of increasing industrial labor productivity by 5.5%/year in the 2016-2020 period will be difficult to achieve. While the construction industry currently has quite low labor productivity, in 2018 this industry's labor productivity only increased by 2.88%; The average in the period 2011-2018 increased by 2.63%, reaching only 75.7 million VND/worker, equal to 74.1% of the general labor productivity level.
The service sector's labor productivity at current prices in 2018 is estimated to reach 118.1 million VND/employee, 1.2 times higher than the general labor productivity. Calculated by comparative prices, labor productivity in the service sector in 2018 increased the lowest since 2013 with 1.47% compared to the previous year, the average growth rate of labor productivity in the period 2011-2018 reached 3.1%/year.
In the service sector, the wholesale and retail industry and the accommodation and food service industry are the industries that account for a large proportion in this area but have labor productivity levels of 82.3 million VND/worker and 76.1 million VND/worker, respectively, only equal to 80.5% and 74.4% of the overall labor productivity level of the economy and at a very low level compared to other countries in the region.
In general, the labor productivity of the industrial, construction and service sectors is many times larger than that of the agriculture, forestry and fisheries sector, but due to the lower growth rate of labor productivity, the gap in labor productivity between the agriculture, forestry and fisheries sector and these two sectors is increasingly narrowing. This also shows that the industrial and service sectors are not as expected as key economic sectors, the driving force for rapid growth in the economy.
The gap between non-state enterprises and FDI: Increasingly widening
According to the General Statistics Office, enterprises have a particularly important position in the economy, being the main part of generating GDP, so enterprise labor productivity is a decisive factor in the sustainable growth of the economy.
The general labor productivity of the entire enterprise sector in 2017 at current prices reached 298.7 million VND/employee, 3.2 times higher than the general labor productivity level of the country. Of which, State-owned enterprises reached 678.1 million VND/employee, 7.3 times higher than the national labor productivity level thanks to promoting the equitization of State-owned enterprises in recent times. However, the high level of labor productivity of state-owned enterprises is still mainly based on advantages in resource allocation, especially natural resources; Non-state enterprises reached 228.4 million VND/employee, 2.5 times higher than the general labor productivity level of the country; Enterprises with foreign direct investment (FDI) reached 330.8 million VND/employee, 3.5 times higher.
Compared to other types of enterprises, the labor productivity of non-state enterprises is the lowest; On the other hand, the gap in labor productivity between state-owned enterprises and foreign direct investment enterprises with non-state enterprises is increasingly widening. Accounting for 96.7% of the total number of enterprises in the country, the low labor productivity of non-state enterprises has greatly affected the overall labor productivity of the entire enterprise sector.
The main reason leading to low labor productivity of non-state enterprises compared to other types of enterprises is that non-state enterprises are mostly small-scale enterprises, so they face limitations in improving labor productivity due to difficulty in accessing and applying technology to production, limited access to official credit, lack of skilled labor, difficulty participating and learning from the value chain led by FDI enterprises, and not being able to exploit economic efficiency thanks to economic advantages. scale…
Foreign invested enterprises in the recent period have always had a positive impact on improving labor productivity through these enterprises bringing advanced production and management technology into domestic investment. However, according to the World Bank's 2017 Report, the proportion of foreign businesses using raw materials as domestic inputs in Vietnam reached 67.6%, much lower than some countries such as China (97.2%); Malaysia (99.9%) or Thailand (96.4%).
Labor productivity per working hour is quite low compared to some ASEAN countries
According to the results of the General Statistics Office's Labor and Employment Survey, the average weekly working hours of a worker working in Vietnam has gradually decreased from 45.6 hours in 2011 to 45.3 hours in 2018.
In particular, workers working in the field of agriculture, forestry and fisheries had the lowest average actual working hours per week in 2018 at 39.7 hours; While the average actual working hours of the industrial and construction sector is 50.3 hours and the service sector is 47.4 hours.
Vietnam's labor productivity per hour worked in 2018 at current prices reached 43.4 thousand VND, 3.5 thousand VND higher than in 2017. According to comparative prices, in 2018 hourly labor productivity increased by 5.3% compared to the previous year (lower than the 6% increase in labor productivity calculated per worker), the average increase in the period 2011-2018 was 4.8% (on average). The growth rate of labor productivity per worker in this period is 4.9%).
According to PPP 2011, Vietnam's labor productivity per working hour is quite low compared to some countries in the ASEAN region, in 2015 it was only 4.4 USD, while Malaysia reached 24.9 USD; Thailand reached 12.1 USD; Indonesia reached 12 USD; Philippines reached 8.4 USD. Singapore alone has a very high hourly labor productivity level of 54.9 USD, but because the average weekly working hours of a worker in Singapore is higher than in Vietnam, the gap between productivity per hour worked between Singapore and Vietnam (12.5 times) has decreased compared to the gap of 13.7 times when calculated by productivity per worker.
Improve labor productivity, increase economic competitiveness
In summary, according to the General Statistics Office, after more than 30 years of innovation and international integration, Vietnam's economy has achieved great achievements, escaped underdevelopment, become a middle-income country and is promoting industrialization and modernization.
However, up to now the economy is still facing many difficulties and challenges and is still quite far away from other countries in the region. To avoid the risk of falling behind and overcome the middle-income trap, Vietnam needs to focus on shifting to a growth model based on productivity, quality and efficiency, with the focus being on improving labor productivity to increase the competitiveness of the economy, helping the country develop rapidly and sustainably in the future./.
Source:chinhphu.vn
thongkehaiphong.gov.vn
Procedures
