In the New Era, Being Large Alone Is Not Enough: The Leading Role of Private Conglomerates in Value Chains

In the new era, scale and growth rate have long been the main yardsticks of a company's success. However, as the economy enters a new development phase, the question is no longer how large a company can get, but how to grow and what value it creates for the entire supply chain and the economy. Competition, therefore, is no longer between individual firms alone; it has moved to ecosystems—the strength of a group is measured by its ability to connect and upgrade the entire value chain. In this new race, where competition occurs not between single firms but across ecosystems, being 'big' alone is not enough. The power of a conglomerate is no longer measured by revenue or size; it is measured by its ability to pull the entire value chain to grow together—from farmers, suppliers to logistics and distribution. And this is something not every company can achieve. At the conference, many opinions asserted that growth models based on cheap labor and foreign direct investment used to help Vietnam break through in the previous period, but are hitting a limit. In a global economy with fluctuations, the requirement is not just to maintain growth, but to shift to a development model based on internal strength and the ability to upgrade the value chain. Thus, forming strong enough conglomerates to lead the economy becomes an important requirement, not only in terms of scale but also in the ability to build ecosystems and connect market actors. The reality shows that the FDI sector, while playing a large role in exports and production, diffusion to domestic firms remains limited. This creates a need for domestic conglomerates to emerge as a 'nucleus', connecting domestic firms and gradually upgrading Vietnam’s enterprise ecosystem. At the conference, Mr. Dau Anh Tuan, Deputy Secretary General of VCCI, emphasized that Vietnam is entering a pivotal transition. The goal of becoming a high-income country by 2045 requires a new growth model based on productivity, quality, efficiency, with science, technology, innovation and digital transformation as the main drivers. In that transformation, private economic groups must play a leading role, not merely as participants in growth. One important task for large conglomerates is, instead of operating in isolation, to take on a leading role and support, create domestic supply chains, transfer technology and management knowledge to satellite enterprises. There is no modern industry that lacks tight linkages between different levels of firms in the value chain. Experts also stressed that in the next period, competition will not occur between individual firms but between supply chains and ecosystems. Therefore, if Vietnamese enterprises do not participate more deeply in the value chain, especially in high value-added stages, it will be difficult to raise national competitiveness. Moreover, institutional factors continue to be emphasized as a fundamental foundation. The policy environment needs to be stable, transparent, predictable, ensuring property rights and contract enforcement—core conditions to build market trust and promote long-term linkages. From a long-term perspective, the story of building large economic conglomerates is not just a corporate issue, but a systemic economic issue. A conglomerate can achieve large scale, but if it does not create diffusion and pull satellite enterprises along, its role in the economy remains limited. Conversely, conglomerates that know how to share value, build trust and develop ecosystems will become major growth drivers, contributing to raising national competitiveness. As development enters a new phase, where the aim is not only growth but also to elevate the country’s international standing, the demands on Vietnamese businesses have changed. It is no longer about chasing 'big fast,' but about 'growing sustainably and responsibly.' In that context, as shared by Mr. Nguyen Duy Hung, a member of the Board of Tan Hung Phat (Tan Hiep Phat), the power of a conglomerate is not measured by revenue, size or tax contribution, but by its ability to create a value chain so that the entire ecosystem grows together. A conglomerate is truly meaningful when it is closely tied to national interests and has the ability to diffuse value across the entire value chain—from raw materials regions, suppliers to the distribution system. In Tan Hiep Phat’s practice, the development model is not limited to expanding production or markets but is built through the entire chain—from farmers growing tea, procurement units, suppliers, logistics partners to the distribution system. 60–70% of the company’s revenue is spent domestically, thus creating stable employment for nearly 4,000 direct workers and tens of thousands of indirect workers. This not only yields business results but also helps retain value in the economy and strengthen national internal power. However, to build a sustainable supply chain, the core factor is not technology or scale, but the way value is shared. To keep farmers engaged, to keep suppliers, logistics or distributors on board for the long term, the company must ensure win-win principles and loyalty to partners. In other words, a large conglomerate is not measured by its own scale, but by the scale of the ecosystem it creates. "There is no other way than sharing added value well enough so that the parties want to go the long road," he stressed. Nevertheless, current practice shows most relationships are short-term, often yearly or by shipment, making it difficult for firms to formulate long-term strategies for the entire chain. The reason is not only market volatility, but also trust between parties that is not strong enough. When trust is not fortified, long-term commitments are hard to form, thus the supply chain cannot achieve the required resilience. From the private sector perspective, Mr. Nguyen Duy Hung says the important thing is not being told what to do, but not being constrained and having enough confidence for long-term investment. For years, Tan Hiep Phat has pursued a strategy of continuous reinvestment from retained earnings to upgrade production capacity and boost competitiveness. According to Hung, what the business most needs is a stable, predictable environment to dare to reinvest, upgrade the value chain and expand internationally. This aligns with the views of many experts at the conference, who say that government’s role in the new era should shift from "doing for" to "leading," by designing clear rules of the game, ensuring consistency in implementation, and enabling enterprises to unleash their maximum potential. In particular, ensuring contract enforcement and property rights are viewed as the foundation for building market trust. Only when commitments are respected and rigorously enforced can enterprises establish long-term cooperative relationships and develop strong supply chains to compete globally. Looking at the long term, building large economic conglomerates is not simply a corporate problem but a systemic economy problem. A conglomerate can reach large scale, but if it cannot diffuse and pull other firms to grow, its role in the economy remains limited. Conversely, the conglomerates that know how to share value, build trust and develop ecosystems will become major growth drivers, contributing to raising national competitiveness. As development moves into a new phase, where the aim is not only growth but also to elevate the country’s position on the international stage, the demands on Vietnamese businesses have changed. It is no longer about "big fast" growth, but about "growing sustainably and responsibly." In that context, as Mr. Nguyen Duy Hung shared, the key is not capital or scale, but the ability to build trust, distribute benefits fairly and pull the entire supply chain along for growth. If forty years ago reform was a choice to survive, today the challenge is not only to develop, but to develop in a way that no one is left behind. And on that path, the power of a conglomerate will not be measured by how high it stands, but by how many people it can lift along with it.