Business · Vietnam Bureau
Vietnamese SMEs embrace technology to escape low-cost trap
Vietnamese small and medium enterprises are increasingly turning to advanced manufacturing technologies to break free from unsustainable low-labor-cost competition. Industry leaders say strategic investments in automation and design capabilities are essential for maintaining profitability in today's competitive global markets.
LSN Vietnam ·
Pham Van Viet, Chairman of Viet Thang Jean Co., Ltd., highlighted the limitations of Vietnam's traditional competitive advantage, warning that over-reliance on low labour costs will inevitably compress profit margins toward unsustainable levels.
To counter this trend, VitaJean has invested in 3D design and laser-cutting technologies that fundamentally reshape production timelines. Certain manufacturing stages that previously required weeks to complete can now be finished in hours, substantially reducing overall production costs while improving flexibility.
The technological upgrade has enabled the company to respond more swiftly to rapidly evolving international market demands, a critical capability for competing in global supply chains. The case demonstrates how Vietnamese manufacturers are shifting away from labor-intensive production models toward technology-driven efficiency.
As Vietnam's SME sector faces mounting pressure from rising wages and global competition, industry observers note that similar investments in automation and innovation may become increasingly necessary for companies seeking to maintain competitive advantage and sustainable growth in international markets.