The global investment realignment is bringing Vietnam a golden opportunity. In the post-pandemic era, the “China + 1” strategy has prompted multinational corporations to seek new destinations to diversify their supply chains. Vietnam has emerged as a strong contender—thanks to its strategic location, competitive costs, young workforce, and a broad network of free trade agreements.
However, opportunity does not automatically translate into advantage. Many Vietnamese enterprises remain outside FDI value chains because they lack production standards, management systems, and data transparency—the essential conditions to become “preferred partners.”
Today’s foreign investors are not merely looking for factory sites—they are seeking “co-development partners”: local suppliers capable of sharing value within global supply chains. To attract high-quality FDI, Vietnam must develop domestic firms that meet international supply-chain standards. That is why the concepts of “Factory-Ready” and “Supplier-Ready” are becoming critical—not just slogans, but operational benchmarks.
Current Landscape: Huge Potential, Low Linkage Rates
Vietnam currently hosts more than 400 industrial parks, 40 high-tech zones, and thousands of medium-sized factories. Yet, according to JETRO (Japan, 2024), only 14% of FDI enterprises in Vietnam purchase components or materials from local suppliers—compared to nearly 60% in Thailand.
The main reason: domestic firms often lack technical standards, quality management systems, and ESG compliance (environmental, social, and governance). In many provinces, local companies remain low-tier subcontractors, with little access to major corporations’ procurement systems. Some were invited to bid as suppliers but failed due to missing ISO/IATF certifications, traceability systems, or occupational safety and energy management protocols.
This issue is not new—but it is increasingly urgent. Next-generation FDI, particularly in electronics, semiconductors, clean energy, and EV manufacturing, demands far higher standards: transparent data governance, green production, and ESG certification. Without proactive preparation, Vietnamese firms risk missing out on the incoming wave of high-quality FDI.
Thailand’s Lesson: From Factories to Supplier Ecosystems
Thailand offers a model example of how a country can upgrade domestic capacity to capture FDI. As early as the 2000s, the Thai government established the Board of Investment (BOI) and the Supplier Development Center, serving as bridges between FDI corporations and local businesses.
The BOI launched a “Local Content Development Program”, providing technical, financial, and consulting support to help Thai suppliers achieve international certifications (ISO, IATF, GMP). The Ministry of Industry also partnered with Toyota, Honda, and Western Digital to create the “Lean Academy,” training thousands of SMEs in Kaizen, 5S, and supply chain management.
The results were clear: within a decade, the localization rate in Thailand’s automotive sector surpassed 60%, spawning hundreds of Tier 1 and Tier 2 suppliers competitive across ASEAN. Similar supplier ecosystems flourished in electronics, machinery, and industrial plastics—turning Thailand into the “Detroit of Southeast Asia.”
The key takeaway: Thailand did not wait for FDI to arrive—it prepared domestic firms in advance. The country made “preparing to receive FDI” a national strategy, complete with standardized criteria, support mechanisms, and structured training programs.
What Vietnamese Enterprises Need to Be “Supplier-Ready”
Drawing from regional experience, a Vietnamese enterprise aiming to become “Supplier-Ready” should meet at least four core groups of criteria:
- Quality & Process Management:
Attain certifications such as ISO 9001, ISO 14001, or IATF 16949 (for automotive). Implement quality control (QC), production risk management, and continuous improvement (Kaizen/Lean). - Safety, Environment, & ESG:
Maintain occupational safety systems, waste control, efficient energy use, and periodic emissions reporting. - Data & Traceability:
Digitally store production records, material documentation, and provide real-time data sharing with FDI partners. - Human Capital & Governance:
Develop technical and managerial teams familiar with international standards, export–import procedures, information security, and foreign language communication.
In short, being “FDI-ready” means not just having a modern factory—but possessing a mindset, system, and culture aligned with global production standards.
VAPEDCO and the “Factory-Ready / Supplier-Ready” Framework for Vietnam
To help bridge this gap, VAPEDCO could take the lead in designing, standardizing, and implementing a national-level “Factory-Ready” and “Supplier-Ready” framework.
This framework could comprise 60–80 indicators across three levels: Basic – Advanced – Strategic Partner.
- Basic: Compliance with safety and environmental regulations; internal quality control procedures.
- Advanced: International certifications achieved; digitalized management systems; full traceability.
- Strategic Partner: ESG reporting, automation adoption, and joint R&D capability with FDI partners.
Implementation roadmap:
- Self-Assessment:
Enterprises use an online platform to score themselves against the criteria and receive a readiness report. - Readiness Upgrade:
VAPEDCO experts guide a 6–12 month improvement plan, providing training, certification support, and partner connections. - Certification & Matchmaking:
Qualified firms receive a “Supplier-Ready ID” and are listed in VAPEDCO’s supplier database—ready to connect with international investors.
VAPEDCO could also collaborate with industrial zones, industry associations, and investment funds to establish a “Supplier Academy”—training SMEs in quality management, ESG, and Lean Manufacturing—similar to successful models in Penang (Malaysia) and BOI (Thailand).
In parallel, VAPEDCO could host annual “Supplier Showcase” events, gathering certified Vietnamese suppliers and global investors. More than an exhibition, this would be a practical matchmaking forum, enabling businesses to present capabilities, secure OEM/ODM contracts, and enter global value chains.
Acting Today for the Next Decade
In an era of intense regional competition, Vietnam must quickly build a Factory-Ready and Supplier-Ready enterprise base, or risk losing FDI opportunities to its neighbors. Domestic supplier capability is the “soft infrastructure” of FDI—it determines whether value creation stays within the country.
This is the moment for Vietnam to shift from a mindset of “attracting FDI” to “preparing to absorb FDI.” The process must begin with private enterprises—through incremental improvements: process manuals, quality certificates, data systems, and professional workplace culture. When thousands of Vietnamese firms meet these standards, Vietnam will not just be an investment destination—it will be a trusted partner in global value chains.
VAPEDCO’s role is pivotal—not only as a connector but as the architect of national capability. Once the “Factory-Ready” and “Supplier-Ready” frameworks are in place, Vietnam will have a national capability map of private enterprises—helping FDI investors find the right partner, in the right place, at the right standard.
When every Vietnamese enterprise is prepared in process, standards, and mindset, we will no longer seek opportunities—we will be chosen for them.
Because in the new era of next-generation FDI, preparation itself is the greatest competitive advantage.
