(Photo: chinhphu.vn)

Labor productivity is one of the most important measurements of development level between countries, as well as between sectors and localities within a country.

Vietnam’s labor productivity has been steadily increasing

Since 2011, Vietnam's labor productivity has increased 2.7 fold, from approximately 3,000 USD per worker in 2011 to more than 8,000 USD in 2023. This improvement has narrowed the gap between Vietnam and other countries in the region.

According to the World Bank, based on Purchasing Power Parity (PPP), Vietnam's labor productivity increased an average of 4% per year in the 2021-2022 period, much higher than the world average of 2%, ranking 2nd in Southeast Asia (after Singapore's 5.8%).

Enhancing labor productivity has contributed to Vietnam's socio-economic development, increasing income, and improving the material life of the people. In the first quarter of this year, the average worker’s income was 322 USD per month, up 24 USD compared to the same period last year.

This achievement has been thanks to Vietnam’s strategy of prioritizing human resource development along with institutional reform and infrastructure development. The Resolution of the 13th National Party Congress in 2021 emphasized the need to align human resource development with science, technology, and innovation, as those are the factors that enable labor productivity to be increased quickly and sustainably.

Last November the Prime Minister approved the "National Program on Increasing Labor Productivity until 2030" with the goal of making labor productivity a driving force for rapid, sustainable growth, effectively taking advantage of the opportunities of Industry 4.0.

Focusing on spearheads to increase labor productivity

Despite improvements in absolute terms, Vietnam's labor productivity remains low compared to other countries in the region. In 2022 Vietnam's labor productivity was only 11.4% of Singapore's, 24.7% of the Republic of Korea's, and 26.3% of Japan's. The disparity in labor productivity and development levels between different regions within Vietnam is also significant. Key factors necessary for rapid, sustainable growth in labor productivity, including infrastructure development, transitioning labor from rural to urban areas, and shifting from the informal to the formal sector, have not seen substantial breakthroughs.

Amid intensifying competition, the Fourth Industrial Revolution, and the rapid development of science and technology, improving labor productivity has become crucial for all countries. Prime Minister Pham Minh Chinh has called upon the Vietnam General Confederation of Labor, workers, the business community, ministries, sectors, and localities to concentrate on key issues.

"We need to lead in digital transformation, green transformation, and the development of the circular economy, the sharing economy, the knowledge economy, and emerging industries and fields to create momentum for socio-economic development. We must spearhead international integration, capitalize on all opportunities, and leverage our potentials, opportunities, and competitive advantages to enhance production and business efficiency. We should also lead in emulation movements aimed at increasing labor productivity by promoting initiatives in management, production, business organization, and technical innovation,' said the PM.

Mr. Chinh emphasized the need for breakthroughs in human resource development, particularly in high-quality human resource training and vocational training, and stressed the importance of advancements in science, technology, and innovation, especially in emerging industries and fields, as well as improvements in the working environment to ensure the legal and legitimate rights and interests of workers.

Improving labor productivity is a crucial, urgent, strategic, and long-term task for the entire political system. It represents the most direct path for Vietnam to catch up with developed countries in the region and globally.