Today we headed a little bit outside of the city to Vietnam Singapore Industrial Park (VSIP). This is a joint venture between the governments of Vietnam and Singapore. When it was formed, Singapore had lots of money but not enough land, and Vietnam had the opposite, so the pairing worked well. The company is an integrated township developer that provides customizable space for manufacturers to use along with housing for the workers. There are already a few industrial parks open throughout Vietnam, but VSIP plans to build more. Many of the companies that use this land are attracted to Vietnam because of the cheap labor and tax incentives that make it more affordable than other areas. The venture has been extremely successful; it is very competitive to get manufacturing space and all of the completed factories are filled. Because of the success of this, as Vietnam and other developing countries become more integrated into the global economy, I predict that we will see many more joint ventures between governments like this. As we looked at the model of the area and drove through the industrial park, I tried to relate the area to anything I have seen before in the United States, but I was having trouble thinking of anything similar. The difference in the forms of government is likely a reason for this. US citizens would probably not like the government having so much control of a company that houses so many others. The setup is efficient and convenient, but there isn’t really a demand for something like this because foreign companies do not choose to manufacture in the United States because of high labor costs.
After lunch (udon noodles, yum!), we went to II-VI. The company is based in the United States, but its manufacturing is located inside of VSIP. II-VI specializes in optical equipment. Their clients often request a small pice of a larger product from II-VI. Because each client’s needs and products are slightly different, the product that II-VI creates is specialized to each client, although they all are related, usually involving lenses or semiconductors.
At nearly all the site visits that we have been to, the cheap labor force of Vietnam has been mentioned as a reason for its attractiveness to global businesses. However, today was the first time we saw products being manufactured. Seeing the people actually working was interesting because it put a face to this labor we have been talking about. Conditions in the factory seemed relatively safe and clean, but we were told that each employee is only trained on one small step of the process, so I wondered if the company ever has to deal with boredom or lack of motivation in the employees. I also wondered about what freedom these employees have to leave or find another job if they want, or if this is the only thing they are skilled enough for.