This is the largest business school for most entrepreneurs before establishing large business ones. Making up more than 97 percent of enterprises nationwide, small-and medium-sized enterprises are operating in less advantageous economic environments both micro and macro economically. They meet numerous difficulties in technology, management model and the skills of the contigent of leaders and workers, the marketing skills and limited ability to access information, financial services as well as investment capital.

According to the guidance of the government, the whole country will have 500,000 small-and medium-sized enterprises by the end of 2010 generating jobs for around 20 million employees.

To gain the results set by the government, these enterprises, however, have to overcome difficulties such as limited investment capital, technology and skilled workers to develop smoothly.

It is likely that almost all banking services such as capital mobilisation, borrowing services, investment, payment, guarantee, consultance and asset management have accessed to community of enterprises nationwide. However, the greatest difficulty of small-and medium-sized enterprises is lack of inherent capital; meanwhile, ability to access banking loan services is restrained. Reasons for the difficulty are that enterprises have little knowledge of credit mechanisms of trade banks and are afraid of the complex documents of banks. Most enterprises set loan documents that are not abided by regulations of banks.

Legal personal assets and personal assets of the enterprises, especially limited companies, are not separated and lack transparency so that it is difficult for banks to value real capacity of the customers. Moreover, accounts lack accuracy and transparency.

Some enterprises map out production and business plans or investment projects that are cursory and subjective. As a result, they can not ask banks for a loan. Furthermore, leaders are short of management skills and officials negotiating with banks are unconfident and uncapable of persuading them for a loan. Small-and medium-sized enterprises should pay more attention to the problems to overcome difficulties in capital.

In order to have success in a competitive economy, small-and medium-sized enterprises have to regularly change their production technology, machine and equipment. However, production technologies used in enterprises are backward. Leaders lack information, experience and knowledge of options, buying and transfering technology.

With some enterprises, technology is simply new machinery and equipment. Accordingly, they pay less attention to production methods and secrets. Enterprises have invested in technology in dribs and drabs due to shortages of capital and habits of small production. As a result, their technology is patchy and unsystematic, saod Vietnam Economy newspaper.

Modern technology helps enterprises raise their productivity with high-quality products meeting demands of consumption markets and reducing production costs. Thus enterprise’s competitiveness is raised. On the contrary, backward technology will limit productivity and make low-quality products, raise production costs and even affect surrounding environments. As a result, the competitiveness of small-and medium-sized enterprises has declined.

A few enterprises have not made an effort to change their production technology because they have not attached importance to technology and the urgent situation of technology transference.

Apart from that, enterprises are also short of skilled labourers to meet demands of intergation into the regional and international economies. The knowledge of employees and bosses in small-and medium-sized enterprises is quite low. Only 6 percent of workers have graduated from colleges and universities and 2 percent of leaders graduated from universities. The contingent of bosses has grown since 1990s, therefore, they still lack experience, management skills as well as knowledge of information, technology and market.

To recruit good workers, small-and medium-sized enterprises have to associate with colleges and universities. Enterprises provide necessary information for schools to help them train skilled employees.

Authorities and government should make specific activities to support mechanism, policies and information about market and price and technology to help small-and medium-sized enterprises operate better.

Source: www.cpv.org.vn