Resolving the paradox to let private-sector conglomerates lead Vietnam's self-reliant economy.

Vietnam’s private-sector economy has expanded significantly, but it continues to face structural constraints, including sectoral imbalances, a large share of small and fragmented firms, lower productivity, limited technology accumulation, dependence on foreign direct investment, and the absence of clear internationalization strategies.

To date, the private economy accounts for about 50% of GDP and generates millions of jobs. Private firms have also directly carried out major national projects, helping build and elevate Vietnam’s manufacturing, services, and trade brands to international markets and strengthening the economy’s autonomy.

Growth momentum and rising scale

Du Anh Tuan, Deputy Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), highlighted major changes over nearly four decades of Renovation, saying the private sector now includes larger-scale, more visionary enterprises. He attributed this progress to the will, capability, and dedication of Vietnamese entrepreneurs rather than luck or special incentives.

Among the Top 500 largest Vietnamese companies, private enterprises increased from 263 in 2016 to 315 in 2023. Separately, Fortune Southeast Asia 500 data shows Vietnam has 76 companies in the Southeast Asia top 500.

Examples of private-sector capability

In manufacturing and related industries, THACO has built a car and mechanical ecosystem in Quang Nam. FPT has grown into one of the region’s largest information-technology companies, operating across dozens of countries and providing digital transformation services to many multinational groups. Vinamilk has developed a Vietnamese dairy brand present in over 50 nations, supported by internationally certified farms and plants. Masan has built a consumer ecosystem spanning food, beverages, and retail, serving tens of millions of consumers daily.

Mr. Tuan said these firms demonstrate that Vietnamese private enterprises can build national brands with regional competitiveness.

Key structural challenges

Despite the progress, the private sector remains “large but not yet strong or dynamic,” and its role in global value chains is still modest. The sector is dominated by small and micro firms: about 97% of private enterprises are small or very small, around 70% have fewer than ten employees, and there are also about 5 million household businesses.

Labor productivity in the private sector remains lower than in the state sector and in FDI, and the gap is widening. Investment in research and development in the private sector is also described as still modest.

Policy and institutional bottlenecks

On policy, there is a desire for large private conglomerates, but progress has been slow. The state procurement mechanisms used to assign national strategic tasks to private enterprises are still moving at a limited pace. To support double-digit growth, the policy and institutional framework—including procurement, benchmarking, and other measures—needs improvement to better unlock private resources.

There is also a need for stronger linkage among domestic private firms, particularly given the prevalence of micro and small businesses. The policy approach, the article notes, should shift toward supporting private enterprises’ science, technology, innovation, and digital transformation. It also points to open questions about which policies can foster an entrepreneurial ecosystem and how private-sector groups should participate alongside foreign direct investment.

Linking domestic sectors and building alliances

Mr. Hien emphasized that, to pursue self-reliant development, Vietnam should rely on domestic private enterprises and state-owned enterprises, and that strengthening connections between them is essential.

The article also states that forming leading private-sector conglomerates will require collaboration, including strong private-sector alliances. It concludes that more private-sector conglomerates are needed to better leverage Vietnam’s home-market advantage.