Communist Review - In the context of the Fourth Industrial Revolution (Industry 4.0) and active international integration, an independent and self-reliant economy is required to have a multi-layered and responsive structure which reflects the advanced and diversified development level of the production force as well as the appropriate and progressive production relations. The multi-layered structure is manifested via the objective role of various types of Vietnamese enterprises, including state-owned enterprises. In order to promote the role of state-owned enterprises in building an independent and self-reliant Vietnamese economy, it is compulsory to continue to perfect the modern and adaptive institutional ecosystem, creating a premise for them to operate effectively and sustainably in the coming time.

With the structural economic approach, along with the requirements for independence, autonomy in policy, the ability to adapt to internal and external shocks, an independent and autonomous economy must necessarily be a multi-layered one in terms of development level, division of labor, with high adaptability to technological changes.

Firstly, the subject layer guides and has a spillover effect on the entire production and service industry. This is a particularly important part, the backbone of an independent and autonomous economy. This sector requires advanced and modern technology and management, strong endogenous capacity, capability of generating means and resources for extended reproduction for itself and the whole economy. In the context of strong integration, with the emergence of global value chains, this leading structural layer will be the driving force for the economy’s participation in regional and international value chains. It is clearly shown in the recent economic development history that in order for an economy to be independent and self-reliant, it is necessary that the leading and pervasive structural layer is strong enough to create motivation and resources to strengthen endogenous capacity when absorbing exogenous impulses from the external institutional environment.

The actual manifestation of the above-mentioned leading and pervasive structural layer is enterprises with strong endogenous capacity in technology and modern management. They are capable of participating in value chains and generating benefits at the high end of the manufacturing or service value chain. It has been obviously proved that in order to spread the development momentum to the entire economy, this leading part must be able to create a driving force for constant innovation within itself; as a result, facilitating an attraction force to encourage other production and business entities to join the already-created value chains. Without joining these chains, other subject structures will operate less efficiently. The cohesion on interests serves as the strongest binding energy for the spillover effects of the leading and pervasive structural layer of the economy. When such a natural interest-based lead and market relations are realized, there is a strong possibility that a powerful premise for an independent and autonomous economy is created.

In terms of operation, the leading and pervasive structural layer must include both the production sector and the service sector. In other words, the structural layer should not focus on either the manufacturing or the service sector. However, for an independent and self-reliant economy, in order to build a backbone of a strong economy with high endogenous capacity, the production platform of the production area for modern means of production cannot be underestimated. In order to expand reproduction with an ever-changing division of labor and technology, the leading and pervasive layer must be in the production area for ​​means of production in the new context.

The production area for means of production in the mechanical age is a fundamental part of the industry. Currently, in the digital economy, this area should include a sector that creates digital resources and intellectual resources. Therefore, the leadership and influence in the context of today's new production force are only reflected via physical industry but also digital industry. This also means that there will be no evident proof of success when a country builds an independent and self-reliant economy merely basing on its digital production force. In fact, it is necessary to have both hard productive force and digital (soft) productive force. To put it another way, it is a structure that includes both the production area for physical means of production and the production area for digital means of production; consequently, self-generating the expanded reproductive capacity for the leading structural layer itself, and at the same time creating a spillover to the entire economy. The new leadership and pervasive structural layer can contribute to gradually establishing capacities for an independent and autonomous economy.

Regarding participants, the leading and pervasive structural layer of an independent and autonomous economy in the most perfect new condition includes the participation of all types of businesses based on different ownership forms. However, as the matter of fact, in order to create such influence, an economy is required to have strong endogenous capacity, large supply capacity as well as adaptability to large and professional markets. Accordingly, for an economy with a low starting level like Viet Nam, enterprises that possess an unstable endogenous technological capacity and are unable to create momentum for the economy are incapable of taking on a pioneer role in the leading and pervasive structural layer of an independent and autonomous economy. The actual situation necessitates the presence of numerous strong types of Vietnamese enterprises, including state-owned enterprises (SOEs) in the leading and pervasive structural layer of the economy. Given Viet Nam's current level of development, a number of strong private enterprises also need to become part of such a structure.

In terms of quantity in the entire economic structure, for a modern economy, despite its importance, the leading and influencing part accounts for the smallest proportion and is the most quintessential sector of the economy.

Thus, when studying the independent and autonomous economy in particular with the aforementioned approach, the indispensable and objective role of SOEs is proved. The key question is how SOEs play a role in the leading and pervasive structural layer to achieve a particular degree of success. The answer lies in implementation. Affirming this is to foresee what SOEs should and will need to be, rather than modifying and fixing the present.

As regards potentials, SOEs have the premise to create good endogenous capacity. State-owned enterprises are present in almost every economy in the world. In fact, it is impossible to find an economy that is completely devoid of SOEs. The differences between economies lie only in quantity, quality, and field of operation. With their dominant potentials, SOEs around the world have well performed their leading and pervasive role, creating the independent and self-reliant capacity of their respective economies. Accordingly, the need for the presence of SOEs in building an independent and autonomous economy in Viet Nam is absolutely evident. However, the number of SOEs does not correlate with the level of independence and autonomy of the economy. What matters is the management and leadership quality, which is mirrored via the operational efficiency and the ability to dominate technological spearheads.

Secondly, the subject layer connects and minimizes shock effects on the economy. The profound international division of labor, the domination of multinational and transnational corporations, and the emergence of different and unprecedented modes of production and business are enabling the shift in how material and service production is organized to occur fast and fiercely. Such situation combined with unexpected shocks (speculation, manipulation, epidemics, etc.) gives rise to subjects which are involved in connecting and minimizing shock effects on the entire economy. The ability to withstand shocks in both scale and intensity is now also seen as a criterion of an economy's ability to be independent and autonomous. An independent and self-reliant economy should have the ability to get over shocks and create a link between the leading structural layer and the rest of the economy.

The subject layer connecting and minimizing shock effects on the economy is reflected through the diversified system of production and service enterprises of all entities and all economic sectors. For economies participated by foreign direct investment enterprises (FDI), this layer also includes enterprises that perform the function of creating linkage in production and supply chains both domestically and internationally by participating in the world market. In fact, this subject layer performs two functions: First of all, forming links and establishing a production network in its own structural system; Second of all, facilitating the leading and pervasive subject to connect in terms of production, service and benefit with other multi-layered structures of the economy.

The role of this connecting structural layer is depicted via the process of popularizing technology, production and services of the leading structural layer to the entire economy. If the leading and pervasive subject layer is known as the backbone determining modern pillars of the economy, the connecting structural layer is a full, living body of the economy. While the leading layer determines the development trend of the economy, the connecting layer determines its social labor productivity. Therefore, it is a part that is large in number, diverse, lively, flexible, and unlimited in size, level of labor division and ownership expression. This part tends to account for the majority of living subjects of an independent and self-reliant economy.

Thanks to the production and service activities of the connecting, the economy's capacity to withstand internal and external shocks is heightened. This is also the layer that creates jobs and generate the largest income for the whole society. Therefore, when taking on the function of connecting and minimizing shocks for the entire economy, this layer also contributes to increasing the capacity of maintain continuous production. This layer, if participated by capable domestic producers, will help generate higher independence and autonomy of the modern economy.

Thirdly, the base layer is closely associated with the system of free division of labor. Along with the two above-mentioned structural layers, there is always a part of the basic hierarchical structure associated with the free division of labor in any economy. Manifestations of this layer are micro enterprises, small households, traditional individual agricultural households, and small service establishments associated with residential areas that create jobs for themselves. In general, in a modern economy, subjects belonging to this layer will gradually transform in terms of scale and level of production organization towards highly qualified ones. Therefore, when the starting point of the economy is still at a low level, this base layer accounts for a large proportion. Over time, this layer will gradually transform and become smaller in size. Slow transformation speed means low social labor productivity. In other words, the independent and autonomous capacity of the economy is not high.

In relation to connecting and leading ones, the base layer plays an important role in absorbing spillover effects, enjoying the leading effects, and connecting with other subject of the economy. Given such nature, the base layer often performs free division of labor, based on production and service’s nature and type. Within the economy, this layer, despite its low-levelled production force, is particularly of great social significance. It contributes to creating jobs and livelihoods for households and workers in rural, remote and isolated areas. Therefore, this grassroots layer has a direct and regular role in contributing to social stability. With that in mind, this base layer of the Vietnamese economy is also actively contributing to building an independent and self-reliant economy in the new context.

Thus, the approach to multi-layered structure allows better visualization of the role of different types of enterprises towards the promotion of productive forces and social labor productivity. In addition, observing an independent and autonomous economy via this prism of a multi-layered structure, one can see the particularly important role of various types of enterprises, including SOEs. It should be noted that observing an economy from a multi-layered structure approach does not mean separating the relations of production from the production forces. On the contrary, this multi-layered approach highlights the unity and appropriateness of production relations with the level of production forces expressed through various types of enterprises and their corresponding development levels.

In order to have a lively socialist-oriented market economy, it is necessary to generate vigorous development of different types and levels of enterprises. With SOEs, as has been pointed out, in terms of trends and roles, it is inevitable and urgent to have SOEs presence in the leading and pervasive layer to promote the development of the entire economy. SOEs have the roles of innovation, creation, leadership, which should not be localized or overwhelmingly involved in the connecting layer of the economy. This does not mean that the leading layer is exclusively localized and limited to SOEs. In building an independent and self-reliant Vietnamese economy in the new context, SOEs need to take on such jobs as follow:

Firstly, SOEs help determine key stages in technology and key areas that have a decisive influence on the overall stability and level of social labor productivity of the economy.

When implementing key stages in technology and key areas, it is not the number of SOEs that matters, but their real capabilities. They participate in technology leadership, set trends and regulate the development Viet Nam's economy. As is shown by classical theory and practice, technology is an important factor to social labor productivity. New technology requires production platform and in turn production platform promotes technological innovation. SOEs' leading role is best depicted through their ability to create technology to power other economic structural layers. In this sense, SOEs will not be able to promote their true role when their main functions are not practiced. Pursuing local interests, in the immediate future, is definitely not the role of SOEs in building an independent and self-reliant Vietnamese economy in the new context. SOEs’ leadership in technology and innovation through the supply of production materials to the entire economy contributes to improving social labor productivity instead of focusing only on the productivity of individual enterprises.

Along with the leading role in technology, it is necessary to have a small number of elite SOEs with the capability of taking on important stages that impact economic stability. These stages include securing energy and performing security - defense tasks. However, in some special fields, it is not necessary to maintain a monopoly position for enterprises for a long time. It is obligatory to have specific roadmaps to shift the role of taking charge of key stages and fields in order to catch up with the economic development trend. Over time, these key stages themselves will change; the subject and role of SOEs, consequently, will correspondingly differ. If this can be done, it will contribute to the establishment of an independent and self-reliant economy in Viet Nam.

In addition, it should be noted that positioning SOEs in the leading and pervasive structure in an independent and autonomous economy does not emphasize their monopoly. On the contrary, if other business entities are mobilized to participate in the layer, the independence and autonomy of the economy will soon be realized. However, due to the characteristics of immediate goals and requirements of special fields, non-state enterprises have not participated in or refused to undertake the responsibility in a long-term and stable manner. Therefore, it is compulsory that the socio-political responsibility is placed on the shoulders of SOEs, and that SOEs become one of the accountable business entities. SOEs failing to meet such requirement equals to failing to fulfil their duties well towards their owners, the people.

Secondly, SOEs actively contribute to the process of building a constantly innovating Vietnamese industry.

Like all economies in the world, in order to establish an independent and self-reliant capacity, an economy is required to rely on a strong and sustainable domestic industry and service foundation. Practical experience of various economies has shown that the level of production forces is often required in the early stages and the effective role of SOEs is maintained. With material forces, the concentration power and leading capacity enable the entire economy to take off. However, despite being aware of this logic, not all economies are always successful. The fundamental problem leading to success or failure in establishing a strong national industry lies in the organization and implementation stage. Therefore, there is no harmony between the goal and how they are implemented. As a result, there have been doubts about the role of SOEs in building the national industry. However, the unsuccessful operation of SOEs does not negate their important role in building the national industry.

Thirdly, SOEs are the leading subjects in digital transformation and innovation, dominating high-value-added fields in production and service value chains.

Despite being modest in number, SOEs, with their available scale and advantages, must inevitably become the leading entity in digital transformation of production, services and innovation. With existing capacity and resources, SOEs have numerous advantages to carry out the shift of production force levels associated with digital transformation. In Viet Nam, in order to gradually establish an independent and self-reliant economy, it is essential to implement a new revolution in production forces and labor division, which is the comprehensive, profound and urgent digital transformation. Along with all other enterprises, digital transformation in SOEs is a requirement that cannot be delayed.

Not only that, according to the requirements of the current world market, SOEs should not be positioned in the processing, assembly and raw production stages in the production and service value chain. Above all, SOEs need to be positioned towards participating in the design, branding, and consumption of refined products in the value chain because these are the stages with higher added value. This is such a difficult task that cannot be performed by small and medium enterprises. If SOEs are not active and proactive, the stages with high added value will be taken by foreign entities. Accordingly, it is unlikely for the Vietnamese economy to be independent and autonomous.

To sum up, in the new context, the role of SOEs in building an independent and autonomous Vietnamese economy is different in nature compared to the previous mechanical economy. Promoting such a role requires the state to continue to improve the modern institutional ecosystem for SOEs to operate sustainably.

Continue to improve the institutional ecosystem to encourage state-owned enterprises to actively participate in building an independent and self-reliant Vietnamese economy

An independent and self-reliant economy, as noted in the Documents of the 13^th National Congress of the CPV, is defined as the economy being able to maintain independence and autonomy in determining sovereignty policies, guidelines and strategies for national economic development; to develop strong Vietnamese enterprises; to maintain major balances, to focus on ensuring economic security; to strengthen national economic potentials; to perform multilateralization and diversification in international economic relations, avoiding dependence on one market or one partner;  to improve the economy's resilience to external negative impacts; to proactively improve the defense system to protect the economy, enterprises and domestic market in line with international commitments; to implement various forms of integration with flexible roadmaps, suitable to the country's conditions and goals in each period⁽¹⁾.

In order for SOEs to be able to perform their new roles in building an independent, modern, and integrated economy as determined by the 13^th Party Congress, the following aspects of a new institutional ecosystem needs to be further refined:

Firstly, continuing to renew thinking about the roles and operation of SOEs.

In order to meet the new development requirements and to shape the modern SOEs of the Vietnamese economy, it is necessary to continue to renew thinking about defining the roles and operation methods of SOEs. It is compulsory to shift from the mindset of SOEs participating in various fields to the one of SOEs participating in key stages and points in the production chain, becoming the backbone of the economy, leading innovation and creativity, being the core force of promoting the development of productive forces and the best expression of the new production relations. Regarding the method of organizing and renovating SOEs, it is necessary to shift from strengthening to transforming SOEs so that SOEs can become part of the leading layer. Nevertheless, it is necessary to avoid denying the role of SOEs. As emphasized, it is not due to the recent inefficiency that the roles of SOEs in building an independent, self-reliant economy are negated. New thinking needs to be reflected in policy-making agencies as well as in SOEs themselves, especially in the senior management team of SOEs.

Secondly, reviewing and supplementing the institutions that identify the fields requiring the presence of SOEs with the level of modern productive forces.

Obviously, in the coming years, if SOEs fail to be present in the leading and pervasive layer, resources will be dispersed, and more most likely, waste will follow. Therefore, in the coming years, positioning and directing strong SOEs (may be small in number) in the field of providing modern means of production, providing digital transformation capacity for the layer and for the entire economy will be needed. It will not be effective if SOEs continue to operate on a large scale and produce in an outdated way, rely on incentives instead of relying on endogenous technological capabilities. In order to improve the level of production forces in SOEs, it is vital to have a clearer guideline, which coherently delineates SOEs’ new political and social tasks. With concentrated resources and capacity, the new political task of SOEs should involve themselves becoming the factor leading the economy. In order to will fulfil such task, it is essential to continue to develop modern institutions for the resolution of the relationship of interest in the operation and supervision of SOEs. Regulations defining rights, responsibilities and benefits need to be concretized soon. The institutions to protect breakthroughs for the common cause, but not yet effective due to market risks, should be promulgated soon so that the SOE management team can confidently promote their creativity. Obviously, it is necessary to both clarify responsibilities and avoid taking use of the institutions to intentionally cause harm to the economy.

Thirdly, continue to remove the "bottlenecks" left by history in the operation of SOE, making SOEs the most active actors in building an independent and self-reliant Vietnamese economy.

Due to diverse development requirements of each previous stage, many SOEs have performed their assigned tasks in a number of aspects, but lacked efficiency with a sub-standard supervisory institution. As a result, many large-scale projects have appeared but remained unfinished with limited efficiency. This is a historical consequence; it is necessary to have a serious view of the socio-economic, security and defense aspects as well as people's confidence in those projects. If the current stagnation continues, it will only cause more difficulties for SOEs and the whole economy. With that in mind, once again, the Government, supervisory agencies (auditing, inspectors, law enforcement agencies, etc.) are required to have closer direction and coordination to assess the ability to overcome obstacles and remove current bottlenecks in SOEs. It is also necessary to classify based on new criteria and mindset as mentioned above. In the absence of prospects for carrying out political tasks with new thinking and criteria, it is compulsory to implement a resolute solution by means of transformation according to market principles, accepting the damage at a low level so as not to suffer greater damage in the future. This is a task since it involves people, organizational apparatus and interest relationships; however, performing this task is a must. Viet Nam's independent and autonomous economy soon became a reality when such "bottlenecks" are removed.

In short, in order to build an independent and self-reliant Vietnamese economy in the current context, the presence of SOEs is indispensable. However, SOEs must be present with new levels and new capacities. To that end, in addition to renewing thinking about SOEs, it is necessary to continue to improve the institutional ecosystem for SOEs to operate, in which the key issue remains the beneficial relationship between SOEs and state management agencies in general.

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(1) See: Documents of the 13^th National Congress, Truth National Political Publishing House, Hanoi, 2021, Vol. I

This article was published in the Communist Review No. 973 (November 2021)