- IMPLICATIONS FOR SUSTAINABLE ENTREPRENEURSHIP IN VIETNAM SERVICE SECTOR IN THE CONTEXT OF 4 th INDUSTRIAL. - With the booming of technology led by the era of 4 th Industrial Revolution, the establishment of entrepreneurial businesses has been on the rise. - On the other hand, rapid increases in the number of businesses without proper control mechanisms may result in damaging impacts which threaten the development prospect of nations. - Through analyzing Vietnamese firms’ figures extracted from reliable materials, this paper provides some insights into the the current status of enterprise development in Vietnam and makes a discussion on the failures of Vietnamese service firms.. - Subsequently, the authors give some implications for sustainable entrepreneurship in Vietnam service sector, which hopefully can boost firms’. - awareness and actions towards sustainability in the years to come.. - Key words: sustainable entrepreneurship, the service sector, the 4 th industrial revolution.. - These are the consequences of the old concept of development, which focuses on accelerating economic growth without sufficient attention to social and environmental issues. - Being aware of the current situation, nations are forced to come up with a more sustained concept of development, which shifts the traditional focus solely on economic issues to three pillars of development and emphasizes the early education of sustainability for not only firms but also potential future entrepreneurs. - Following the general movement of the world, sustainable entrepreneurship has also been started paying attention in Vietnam.. - It can be seen that the development of Vietnam economy recently is accompanied by a noticeable increase in the number of businesses. - The optimal solution perhaps are to educate firms, from the grass-root level, about the reciprocal relationship of economic, social and environmental factors and direct them to the idea of sustainability. - Sustainable entrepreneurship, therefore, is the expected outcome of the education efforts.. - This article will first clarify the concept of sustainable entrepreneurship, then provide some firm figures in Vietnam relating to business registration, suspension and dissolution as well as firm profitability to give out some thoughts on the economic pillar mentioned in the concept of sustainable development.. - After that, some suggestions for sustainable entrepreneurship are provided based on the firm data analysis and current needs of the economy.. - Overview of sustainable entrepreneurship. - Sustainable entrepreneurship has been lately developed as a branch of sustainable development theory. - “meets the needs and aspirations of the present generation without destroying the resources needed for future generations to meet their needs”. - From the definition, sustainable development also refers to exploring, innovating and exploiting business opportunities and creating social and environmental benefits for other actors in the society (Pacheco et al., 2010. - This concept emphasizes the effective use of natural resources and the maintenance of environmental condition in the development process.. - A framework for sustainable development referring to “three pillars of sustainable development” has been developed in the World Summit on Social Development since 2005. - Sustainable development based on these three pillars aims to achieve the development goals discussed by the United Nations Conference on Sustainable Development discussed in 2012, which are:. - So far, the concept of sustainable development on an international level has been unified and the goal of achieving sustainable development has become the millennium goal.. - While sustainability is closely related to preserving existing resources for future generations, entrepreneurship aims to develop new business solutions in the long run. - (2010), is “discovery, creation, evaluation, and exploitation of opportunities to create future goods and services consistent with the sustainable development goals”.. - Jong (2017), for entrepreneurship, the long-lasting goods and services, as a reflection of longevity concept, is not feasible because of the continual changes in demand that biasing the demand predictions. - Jong (2017) argue that the true goal of sustainable entrepreneurship is to create a positive impact, which is built on alertness, innovative thinking, risk-taking attitude and other ethical standards.. - While the concept of sustainable development has existed for long, sustainable entrepreneurship is a relatively new concept that has not received much attention due to the difficulty of meeting the sustainability requirements of entrepreneurial businesses. - Current status of firms in Vietnam. - 3.1 Newly established, suspended and dissolved enterprises. - Regarding the number of newly registered firms, according to the Vietnam Business Annual Report (VBAR by the Vietnam Chamber of Commerce and Industry (VCCI) and the statistics of the Agency for Business Registration, the numbers of newly registered firms rise sharply from 2015.. - The number of registered/suspended and dissolved enterprises in the period 2007-2017. - Unit: Number of firms. - The year of 2016 is the first year the number of newly registered firms surpassed the threshold of 100,000 firms before reaching its high in firms). - Newly registered firms Suspended and dissolved firms. - It can be seen that the industries with the highest firm growth are mostly in the service sector. - On the other hand, negative firm growth was recorded in the field of Transportation and storage.. - Increase in the number of enterprises in 2017 compared to 2016. - In parallel to the increase of newly registered firms, the numbers of suspended and dissolved firms have been decreasing in the last 3 years. - 2015, the number of suspended and dissolved firms equaled to 85.3% of newly registered firms, by 2016 and 2017, this ratio respectively decreased to 66.4%. - On the other hand, while Agriculture, forestry and fishery sector and Industry-Commerce sector 1 show decreasing tendency, it can be seen that the number of suspended and dissolved firms in the service sector slightly increased.. - The number of suspended and dissolved firms was largest in the industries of wholesale and retail trade. - repair of motor vehicles and motorcycles industry, which accounted for firms) of the total number of suspended and dissolved firms in the service sector. - This is also the industry with the largest number of firms registered in recent years.. - The number of suspended and dissolved firms in by sectors, compared to the number of newly registered firms. - The number of suspended and dissolved firms. - Compared to the number of newly registered firms. - It can be seen that although the service sector observed the most impressive growth in number of registered firms in 2017, only the service sector had increasing number of suspended and dissolved firms and it accounted for roughly 71% of suspended and dissolved firms of all three sectors. - 1 According to VCCI (2017): Agriculture, forestry and fishery sector includes the 1 st industry in Table 1 Industry-construction sector includes 4 industries, from the 2 nd industry to the 5 th industry in Table 1 Service sector includes 12 industries, from the 6 th industry to the 17 th industry in Table 1. - the survivability of Vietnamese service firms, orientation towards the direction of sustainable development (for existing firms) and sustainable entrepreneurship (for new/about-to-establish firms).. - According to VCCI (2015), the service sector witnesses the highest number of loss-making firms. - Although the number of newly registered firms has been growing fast in the recent years, the issue of suspended and dissolved firms, especially in the service sector, is of great concern. - While the concentration of newly established firms in the the service sector is a common trend in the world, the managerial weakness and the limitation in access to external resources may lead to the exposure of young businesses to potential internal and external threats.. - Enterprises on the service sector and the 4 th Industrial Revolution. - Currently, the service sector contributes to national income and employment as well as becoming the center of policy-makers’ attention in both developed and developing countries. - In OECD countries, the service sector account for about 80% of employment and 75% of GDP. - Also, developing the service sector is the engine of growth for Asia (Noland et al., 2012) and Vietnam is unexceptional. - In Vietnam, the service sector is growing fast in both quantity and contribution to employment creation and GDP. - The fast- paced development of the service sector shows optimistic outlooks if the sector is well-regulated and directed.. - In the context of the 4 th Industrial Revolution, Vietnam with higher focus on technological advancement will experience better future of economy and society.. - One prominent characteristics of the 4 th Industrial Revolution is the replacement of human force by machinery due to the need of automation to save labor costs and elevate the precision of production process. - As a result, this replacement causes labor reallocation in transitional economies, from labor-intensive industries to the service sector. - This partly explains for the fact that the number of firms established in the service sector noticeably increased in the past years and so did the number of business fail in this sector. - A number of possible reasons can explain the failure of Vietnamese service firms, both from the outside and inside of the business. - capture the positive effects brought about by the 4 th Industrial Revolution. - If regulatory framework is incomplete and cannot catch up with the rapid development of the digital technology in particular and the 4 th Industrial Revolution in general, it will slow down the access of local firms to modern technologies and make them unable to compete with foreign firms, even in the Vietnam markets.. - Moreover, many Vietnamese firms either cannot grasp the useful information for them or cannot make use of provided information to enrich their firms due to the information ambiguity and confusing administration procedures. - These funds are undoubtedly helpful, nonetheless the publicity level of information and strict conditions of the funds hinder the borrowing intention of firms.. - From the business side, it can be easily seen that the number of people working in the service sector sharply increases in the past years. - The tendency of labor concentration to the service sector is actually not newly happened in Vietnam. - It is a necessary stage to transform Vietnam from a factor-driven economy to an efficiency-driven economy and it is also supported by the widespread of the 4 th Industrial Revolution. - Although the labor reallocation is essential, it also comes with negative consequences of business failures as shown in the data analysis. - In fact, despite the practicality of the ideas, the prerequisite for success of current entrepreneurial activities lies on careful preparation and especially, innovation-and-technology-based development. - The competitiveness of firms operating in the service sector very likely rests on customer satisfaction,. - which is hugely influenced by technology and innovation factors during the ongoing 4 th Industrial Revolution.. - The development of service sector may indicate increasing flow of migrants from countryside to urban areas. - This movement possibly causes shortage of personnel working in the primary sector (agriculture, forestry and fishery) and secondary sector (industry-construction), which in turn results in the decline in efficiency of these sectors. - Therefore, reasonable allocation of resources to remain balanced development of the three sectors is among the keys to achieve sustainable development.. - Unfortunately, the awareness of the business community about the Industrial Revolution 4.0 is limited. - According to Bui (2017), a recent survey conducted with a sample of 2,000 firms of the Hanoi Association of Small and Medium Enterprises revealed that 79% of respondents did not prepare for the 4 th Industrial Revolution. - For businesses which are not interested in the 4 th Industrial Revolution, the common reasons are (i) they did not feel the 4 th Industrial Revolution would affect their firms and their industries. - (ii) they do not understand the nature of the 4 th Industrial Revolution. - In an era when technology and innovation are gradually being seen as prominent development pillars of businesses, firms need to become more proactive in R&D in order to shape their competitive advantages against competitors in the market.. - Implications for sustainable entrepreneurship in Vietnam’s service sector in the 4 th Industrial Revolution. - In the service sector, the number of newly established firms is huge but the amount of suspended, dissolved and loss-making ones is not small. - In the light of the 4 th Industrial Revolution, some suggestions for sustainable entrepreneurship in the service sector are proposed as follows:. - Firstly, the awareness of the business community about the 4 th Industrial Revolution is limited as shown above. - Thus, enhancing the awareness of firms in the service sector on the Industrial Revolution 4.0 must be put in priority. - Secondly, equipping appropriate business management skills in the 4 th Industrial Revolution is necessarily. - Global development trend shows that entrepreneurial businesses need to be technology-integrated, especially during the 4 th Industrial Revolution. - An increasing number of businesses is using software tools, such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM), to improve management efficiency. - Two major shifts in Vietnam economy are witnessed in this transitional phase, which are the shift from the state-owned business sector to private business sector and the concentration of firms in service sector. - Using the statistical figures relating to entrepreneurship in the recent years, this paper is a reference for individuals who are having intention to engage in entrepreneurial activities and looking for sustainability approach to the business.. - Sustainable entrepreneurship: definitions, themes and research gaps. - Centre for Sustainable Entrepreneurship.. - Developing the Service Sector as Engine of Growth for Asia: An Overview, Retrieved June 8th, 2018, https://www.adb.org/sites/default/files/publication/30080/economics-wp320.pdf. - Entrepreneurship and the creation of opportunities for sustainable development.. - The new field of sustainable entrepreneurship:. - Vietnam Business Annual Report 2015 - Theme of the year: Business Development Services. - Vietnam Business Annual Report Theme of the year:
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