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The role of the State, market and society in occupational restructuring toward modern industry

Institute of Sociology,
Vietnam Academy of Social Sciences

(PTOJ) - Based on secondary data sources, statistical data and the results of the national project titled "Research on the relationship between the state, market and society in social development management in Vietnam", a quantitative survey with 1,500 samples, 80 in-depth interviews with groups of officials working in departments, agencies, enterprises and some social organizations, representatives of households in 6 provinces and cities in 2020, this article analyzes a number of aspects reflecting the success and limitations of the State, the market and society in occupational restructuring, suggesting implications on policy in order to promote rapid and sustainable occupational structure for our country in the 2021-2030 period toward a modern industrial society which was outlined in the Documents of the 13th National Party Congress.

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The State, the market and the society have a crucial relationship in development management in modern societies. Each of these entities have a different position and role as they participate in all aspects of life in order to ensure the harmonious development of society in a healthy and progressive direction.

The appropriate combination and division of functions between these areas will promote the transformation of industries, stimulating production and business activities, creating more jobs for employees. The 5th Plenum of the Central Committee of the 12th term set the following requirement: “Fully defining and properly implementing the position, role, function and relationship of the State, the market and society so they shall be suitable for the market economy; ensuring our socialist orientation; strengthening and maintaining the leadership role of the Party”(1). This article focuses on clarifying the relationship between the State, the market and society in regard to occupational restructuring, which is a very important issue for social development management in Vietnam today.

After 35 years of renovation, the occupational structure has developed in a diversified manner. The structure was once the simpler “two classes, one stratum” has been transforming into a structure with many different classes and groups of occupations toward a modern industrial society. To form the current occupational structure, the State plays a significant role in advacing new laws and making new policies to promote social actors in expanding production and business activities; the market gradually operates in accordance with the rules, allowing for equal competitions among entities, contributes to the transformation of growth models, changes the structure of occupations, increasing incomes for employees and improving the quality of life for the people across the country.

However, the reality of occupational restructuring in the country also has limitations, inadequacies and faces new challenges, exerting negative impacts on the realization of the industrialization objectives set forth by the Party.

1. The situation of occupational restructuring in Vietnam over the recent years

The reform cause has changed the social structure in our country towards increasing development and the diversification of its composition. From a simple occupational structure, Vietnam has transformed into a new, more diverse socio-occupational structure with many different social classes and groups of occupations present in social life. The process of occupational restructuring impacts the scale, quality, position, etc. within and outside the industries, creating a vivid picture in the context of extensive international integration.

Employment transformation in all sectors has been slow. This not only impacts economic growth and comprehensive social development, but also creates inadequacies in the employment restructuring in different occupations, in different localities and regions. A very common phenomenon in rural areas is that laborers do not fully change their job to new occupations or focus on developing a career only. Rather they do their main job, combined with a side job. The low-paced occupational restructuring in the fields of agriculture, forestry, and fishery results in a large surplus of employment in agriculture, with about 35% of employees across the country working in agriculture, forestry, and fishery. Meanwhile, some industries such as manufacturing-related services, which are considered to be rapidly growing sectors in the context of market economic development and international integration, only account for 18.9% of the [national] labor structure. Surplus labor in agriculture and the individual economic sector still account for a massive proportion, while laborers in agriculture still accounted for 49.5% in 2010 and 41.6% in 2016(3).

Inadequacies related to issues of gender in the process of occupational restructuring such as the phenomenon of feminization or aging in agricultural labors in rural areas are quite common. Workforce pendulum migration and seasonality take place. There is a phenomenon that many workers must migrate back to their hometown due to unsustainable jobs in urban areas and industrial zones, reflecting the difficulties and challenges that the process of occupational restructuring is facing, requiring the subjects to look for models to adapt to new contexts. In which, the State, market and social actors shall play a crucial role such as completing policies, stimulating renovation and creativity, developing science and technology, ensuring proper operation of enterprises and markets, promoting the role of businesses, dynamism, and the social responsibility of actors in the community.

The slow transformation of the structure of employed labor in various occupational groups in Vietnam over the past decade has not only affected the labor transition towards modern industry, but also affected labor productivity in each industry and national economic growth. Because fields such as manufacturing, science and education are considered to bring high labor productivity; while the agriculture, forestry and fishery sectors still maintain low productivity despite the push to apply scientific and technical advances to production.

The value of manufacturing and processing industries in GDP accounted for about 16.5% in 2019. The industrial structure was still very poor (assembling is the mainstay, the supporting industries are poor, Vietnam still has a low position in the global value chain)(4). The industrial fields in Vietnam in recent years have been developing in quantity but not quality. That is also the cause affecting the professional development direction of Vietnam in the context of increasingly intense competition with other countries in the region and the world.

Vietnam’s export of industrial goods has increased rapidly, but the more we export, the more dependent we are on inter-mediate products imported from foreign countries, particularly China, Korea, and Japan. This reflects the process of industrial development in our country over the decades, but our dependence on foreign enterprises is still very heavy. Therefore, the industries have not really changed our structure of occupation and the position of the professions and created many more high-quality jobs for the redundant workforce, particularly highly qualified professionals who are trained in colleges and universities. Although in recent years, highly qualified human resources in our country have rapidly developed because of the development of our education and training system, particularly the colleges and universities network, but the training quality still has many shortcomings and does not meet the requirement of recruiters. This also indirectly affects the professionalism of human resources, the quality and trend of the changing labor structure - occupations in each field are becoming more and more specialized to compete with other countries in the region and the world. Inadequacies in using human resources, including the ineffective use of highly qualified individuals who are trained abroad, also contributes to the impact on the occupational restructuring in Vietnam.

2. Achievements and limitations of the State, the market and society in occupational restructuring in Vietnam

Occupational structure is a significant part of the social structure of each country. The current diversified occupational structure is the result of our implementation of renovation and international integration policies, creating more and more sensible relations between the State, the market and society in developing and managing the development of occupational structure. First, in regard to the role of the Party which has set the renovation policy since 1986, the new management mechanism has created opportunities for social actors to participate in developing production and business activities and promote our dynamism and creativity in the process of development. The State has been constantly improving the legal system, with many localities issuing new policies to attract, encourage and support social actors to expand their industries and fields of production and business to meet the demands of the economy and the society.

The market also gradually forms and operates following the rules, creating an increasingly equal competitive environment for subjects in production and business activities under the market mechanism. In fact, currently Vietnam has many economic sectors such as state-owned enterprises, private enterprises, foreign enterprises, etc., which are equally participating in the market. These businesses not only contribute to the transformation of the occupational structure but also change the growth model, providing more jobs and income, improving the quality of life for people across the country.

From the “two classes, one stratum” socio-professional structure, up to today, the socio-professional structure has diversified with 9 social strata/groups: (1) Social leaders and managers; (2) Businessmen; (3) Highly-qualified professionals/experts; (4) Employees; (5) Workers (craftsmen); (6) Traders - service providers; (7) Handicraft manufacturers; (8) unskilled workers - freelancers; (9) Farmers.

After 35 years of renovation, the occupational structure in the country has generally undergone many changes in a direction that it is more and more appropriate to the rule of social development, promoting the participation, position, and role of the social actors in the process of industrialization and modernization in the country. However, the process of occupational restructuring has happened at a slow pace. Our current occupational structure model is still pyramid-shaped with the majority being farmers. This model of occupational structure covers and interweaves many classes of traditional and modern society (traders - service providers, handicraft manufacturers and farmers). The classes/groups represent the slowly developing industrial society (businessmen, professionals, employees, and workers), intellectuals. This is the model of a society in its transition to an industrial one, which is the early stages of an industrial society. However, in localities with strong urbanization and industrialization such as Hanoi, Ho Chi Minh City, etc., the occupational restructuring has been stronger, with the traditional occupation groups (agriculture, fishery) decreasing and occupations in the industrial, commercial, and service sectors rapidly increasing.

Survey results show that in the survey sample, the percentage of respondents that completely agree with the opinion that the State, the market, and society have successfully played their role in contributing to the process of occupational restructuring is 25.6%, 64.9% of respondents partially agree, and only 9.5% respondents do not agree. This data reflects that the State, the market, and society have not fully performed their role of managing and creating an occupational-job structure suitable to the local economic situation that meets the expectations of the Party and the people in the provinces where the surveys were performed. This problem sets a requirement that the role of the State, the market, and the society, in each locality shall be further promoted in the current phase of socio-economic development.

The synthesis of in-depth opinions of the interviewees also shows that the respondents in the survey sample share the opinion that the State, the market, and society have not successfully played their role in contributing to the process of occupational restructuring in each locality.

The following examples and analysis reflect the differences between provinces and cities and the assessment of the relationship between the State, the market, and the local society over the years.

The survey results (Figure 2) show that the majority of surveyed officials expressed their agreement with the highest percentage. It is interesting that the percentage of those in the provinces that answering that they fully-agree is very low.

Figure 3 shows that the number of respondents in the survey sample who fully agree with the role of the State makes up the highest percentage of 30.4%, followed by the percentage of respondents who fully agree with the role of the market at 17.3% and the lowest is the percentage of respondents who fully agree with the role of the society at 6.7%. It is necessary to note that in the option for partial agreement, the social role is 92.2%, the market role is 81.8% and the State role is 57%.

These facts are evidence that all three subjects still have limitations. This requires them to further promote their role in creating an occupational structure that is suitable to the local conditions.

Evidence from the in-depth interviews also shows that many existing inadequacies are being raise relating to the creation of an occupational-job structure that is suitable to the local situation. The general trend of social classes is to change shift their jobs out of their households (except entrepreneurs) and for state-managed sector to work with the private sector and other sectors. In which some classes of modern society (such as businessmen, professionals, employees) work in association with the state economic sector, while classes of traditional society (such as traders – service providers, handicraft manufacturer and farmers) work in association with the household economic sector. The point shown here is that this economic sector requires low level of production, operating in small scale and providing low-quality products.

Another shortcoming is that the type of occupation, the main job of employees particularly in the state sector, the problem of work efficiency and compensation are not commensurate with the workload and responsibilities. As a result, many personnels are not satisfied with their job or do not fulfill their responsibilities for their tasks, not meeting society’s expectations, leading to many other social consequences.

The social classes mentioned above, including leaders, managers, and highly qualified employees such as doctors, teachers, accountants, engineers, etc., have a high percentage of people who have side jobs or work overtime compared to other social strata and groups such as farmers or workers. This reflects that the productivity, efficiency, and result allocation of labors in the main work of groups is not reasonable, leading to employees being distracted at work and looking for other jobs to earn their livelihood. These phenomena reflect the inadequacy of the State’s resource management policies and mechanisms that need to be promptly adjusted.

On the position of occupation and occupational mobility mechanism for individuals and social groups; over the years, the State and local authorities have developed a strategy for socio-economic development; implementing many policies on education and training, vocational training programs, loans; developing industrial parks, etc. in order to rapidly transform the occupational structure for the localities. Policies and regulations on human resource recruitment are promulgated to create equal opportunities for individuals and social groups to gain an occupational position appropriate to their talents, and to make horizontal or vertical career moves so that they have a job suitable with their competence.

However, the actual development and in the surveyed localities shows that there is an inadequacy in the assessment of occupational position and prestige in society, leading to an inaccurate reflection of professional values, distorting and generating many negative effects in the process of occupational mobility of individuals. There are also signs of unfairness related to prestige and occupational position, trained people with a degree are still underrated in comparison to those holding positions of power. Most occupations with high social status are related to power, while professional occupations are underrated. In addition, the mechanism and form of competition for occupational mobility in our country in the past time has been shown to be unhealthy and unfair. Many individuals get promoted in their career not based on their competence or talent competition, but mainly based on their relationships and money.

The current situation of recruitment and use of human resources of many small and medium-sized enterprises shows inequality, prioritizing close relationships with people holding key and important positions in the enterprise. The work of providing training to improve employees’ skills and expertise as well as ensuring the welfare regime are not paid due attention. This leads to the situation in which many employees are not dedicated, only coping with their work, having little initiative and feeling unsure about a long-term commitment to their enterprises.

The number of enterprises is constantly increasing. However, the phenomenon of enterprises shutting down or going bankrupt is also a significant number every year, thereby not creating sustainable jobs for employees.

Thus, the socio-professional structure in the localities has changed a lot in recent years. These achievements were gained thanks to adapting the Party’s renovation to our mindset and to reforms of the management mechanism; The State has constantly improved the legal system and applied new policies which are more suitable to the reality of development in order to create opportunities for the market/enterprises to play their role in the development process.

The law-ruled State in our country has been increasingly perfected and is playing a significant role in providing orientation and promulgating appropriate policies as well as management methods in the process of occupational restructuring.

The market and businesses also play a significant role in creating an increasingly equal competitive environment, promoting the occupational restructuring in urban and rural areas, creating more new jobs for labors, improving the incomes and quality of life for all classes of people in all parts of the country. The uninterrupted improvement of the renovation mechanism has stimulated the initiative and dynamism of society, namely households and social groups in searching for job opportunities and career moves in accordance with their needs, qualifications, and the effort of each individual.

The transition from a centrally planned economy in which the State plays the role of directly managing the economy, to an economy with increasing influence of market laws, has led to a shift and redistribution of the workforce and population. The elimination of subsidie mechanisms and the development of a multi-sector economy has created economic growth in the non-state sector,  creating opportunities to increase income and opportunities for employment. The movement of labor and population becomes easier and requiring lower costs and with the participation of many different sectors and social groups.

However, many inadequacies and limitations related to occupational restructuring such as the slow pace of occupational restructuring, the low improvement of the professional quality and other aspects including regional issues, age, gender etc., in the process of occupational restructuring are presenting many difficulties.

Due to the current economic and social challenges, climate change and complications due to the pandemic, our production and business activities face many difficulties, causing unsustainable and declining incomes, many pendulum and seasonal migration becomes the method chosen by many people in various localities, particularly in remote rural areas.

The migration model in which surplus agricultural workers leave their villages to find jobs but do not leave their hometown and land is called move-but-not-leave-the-homeland. Households in the countryside still keep their fields, perform their obligations and register their temporary absence as necessary. Most of do-not-leave-the-homeland workers, particularly workers and laborers in the informal economy sectors tend to return to their homeland in order to participate in seasonal agricultural activities, festivals, traditional Tet holidays or in the case of complicated pandemic. When returning to their hometown, they provide cash to support their family and relatives in the countryside. Many laborer continue to work in agriculture and provide services related to crop production and animal husbandry in the area to which they move. In this case, the Do-not-leave-the-homeland model is fully shown, etc. The situation is that there are still many obstacles ahead in the occupational restructuring process in Vietnam. In order to achieve the target set in the Resolution of the 13th National Party Congress that by the 100th anniversary of establishment of the Party in 2030, Vietnam becoms a developing country with modern industry and high average per capita income, Vietnam needs to pay further attention to the relationship of the State, market and society in occupational restructuring with the following policy implications:

Firstly, further perfecting on the law-ruled socialist State. The State’s functions shall increasingly meet the expectations of the market and society, promoting administrative reform towards digital technology, setting strategies and policies on socio-economic development suitable to the current new context, attracting and fully taking advantages of the investment capital and resources in the country and from the world for our occupational structuring.

Secondly, the market shall be increasingly perfected to ensure that production, business, distribution, and consumption activities operate in accordance with the law; particularly enterprises shall pay attention to renovation in their production and business activities, improving their product quality, competing equally in the market in accordance with the current new context. Enterprises should attach great importance to their implementation of legal regulations and constantly pay attention to improving the social welfare regime in order to create a safe and healthy working environment and sustainably developing businesses and localities.

Thirdly, families and social organizations need to further promote their available capital sources, being more proactive, actively participating in studying to improve their professional competence and skills to adapt to the labor market in the current new context; promoting their dynamism in searching for jobs suitable to their capacity and interests, taking responsibility, providing initiatives and creativity for their employment and the prosperity of society.


Received: March 18, 2022; Revised: December 11, 2022; Approved for publication: December 19, 2022.


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