The repositioning of supporting industries

Vietnam's rise as a global manufacturing hub has been impressive, driven by strong export growth, competitive labour, and sustained inflows of foreign investment.

- By Chu Viet Cuong Director of Supporting Industry Centre, Industry Agency, Ministry of Industry and Trade and Nguyen Canh Cuong Expert lecturer, University of Economics and Business Vietnam National University, Hanoi

Yet beneath this success lies a structural limitation: the underdevelopment of domestic supporting industries.As global supply chains become more complex and uncertain, Vietnam must move beyond an assembly-based model. A critical step forward is to reposition supporting industries not as auxiliary sectors, but as a form of industrial infrastructure central to national competitiveness and long-term growth.

Supporting industries comprising producers of components, materials, and intermediate goods are the backbone of any modern manufacturing ecosystem. Without them, production remains fragmented, value addition is limited, and dependence on imports persists. In Vietnam, many key industries such as electronics, automotive, and machinery still rely heavily on imported inputs, constraining domestic participation in higher-value segments of the supply chain.

Reframing supporting industries as infrastructure marks an important shift in policy thinking. Just as transport and energy systems enable economic activity, a strong domestic supplier base enables efficient, resilient, and competitive manufacturing. Weak supporting industries increase production costs, extend lead times, and reduce Vietnam's attractiveness to high-quality investment.

By contrast, a robust local supply chain enhances productivity, improves localisation rates, and strengthens the country's position in global value chains.