While a niche market is vital for small and medium enterprises (SMEs), the shifting from mass production to the production of many diversified products assigns more meaning to design for SMEs.
The report of the ASEAN-CCI task force on SMEs in 1999 has shown that to “display greater originality” is the most important issue for all ASEAN countries in terms of current corporate strategies.
Since 1986, Vietnam has been promoting a “Policy of Renovation” or “Do Moi”, to implement a liberalised policy through the introduction of a market economy with a socialist orientation.
The development of SMEs is one of the most important themes of the policy. It is estimated that over 90% of Vietnamese enterprises are of small or medium size. They form an overwhelming part of the private sector in Vietnam.
In spite of the weaknesses of Vietnamese SMEs in terms of size, this sector has been greatly contributing to the social and economic development of the country, twenty-six percent of GDP and more than sixty percent of non-agricultural employment.
There is a growing recognition by the Vietnamese government and various economic agencies that the effective use of design is one of the indispensable factors for strengthening the competitiveness of SMEs.
Vietnam’s economy is now in a transition period. The industrial sector is focused merely on light industry with imported design, through offshore production.
The production of handicrafts, such as ceramic and furniture is the sector that fosters a boom in creative designs. Other areas, including textile, glass, metal ware, interior design and architecture; and especially industrial design are far from meeting marketing requirements.
The main reasons for this are the lack of design promotion activities, which can improve the integration of design into production processes. The survey of UNIDO in 1998 has shown that Vietnamese companies do not think it impossible to develop completely new products, but they do it with great difficulty.
The design capacities of SMEs are worse. They ‘copycat’ foreign designs or the designs of large enterprises. The demand for product design has now been increasing, as Vietnam joined AFTA, signed a bilateral trade agreement with the USA and is preparing for negotiations to join the World Trade Organisation.
Business development services
Due to size constraints, Vietnamese SMEs have to buy product design services. It is not rational for them to have specialised research and development or design departments inside the company.
A study on Business Development Services (BDS) in Vietnam carried out by GTZ and Swisscontact in 2001 has indicated a large market for product design services.
However, the market penetration rate was only six percent of SMEs, although Vietnamese SMEs rate product design services in third place of importance, after advertising and promotion services and Internet services.
The weakness of product design in the overall BDS lies in its limited supply capacity. Only eight percent of SMEs, eighty-five percent of which understand the benefits of product design, have tried it.
Vietnamese designers work outside of the industrial process. Some of them prefer to produce work that is mainly concerned with self-expression, as a means of conveying persuasive ideas.
However, design practice is shaped by innovative forms, material applications, technical means and industrial processes that add value to products. In this aspect, the skills of integrating design processes into the activities of SMEs in Vietnam are crucial.
As an organisation representing the national business community, the Vietnam Chamber of commerce and Industry is carrying out two tasks to promote design development for SMEs.
The first task is to propose to the Vietnamese government a complex program of strengthening the competitiveness of Vietnamese products through design promotion. The second task is to improve the capacites of SMEs in terms of product design by:
• expanding the use of design to different fields
• promoting the creative role of design in industry
• improving management skills for SMEs on product development
• helping to mobilise the design promotion of resources of a network of organisations and agencies
In all of these aspects, Vietnamese design promotion agencies need a tight cooperation with other countries to exchange experiences and experts.
This article was published in ICSID News 5/02, the newsletter
for the International Council of Societies of Industrial Design