The Real Situation of Industrial Cluster Infrastructure and Recommendations for Industrial Clusters Infrastructure in Hanoi, Vietnam

INTRODUCTION

Currently, there is a different understanding among Vietnamese and foreign scholars and organizations about industrial clusters.

The concept of "Geographical clusters" or "Industrial districts" appeared at the end of the 19th century by Alfred Marshall, stemming from his study of the concentration of industrial production in the North of England. According to Marshall, Industrial clusters have three basic advantages from centralization: The pervasiveness of information; The specialization and division of labor between establishments, and the development of a diversified skilled labor market. Later, the concept evolved into two different schools of industry approaches. French researchers such as Courlet et Pecqueur, Colletis ... called local production systems. The British and American researchers called the Industrial Cluster “Industrial Cluster” or “Industrial districts” with the approach of G. Becattini; Michael Porter...

The table below will show overview of industrial cluster development in Vietnam to 2010 we see that Average occupancy rate compared to the finished construction area in east and northwest region is 47%.

Table 1. Current status of industrial cluster development in Vietnam to 2010

Source: Department of Local Industry - Ministry of Industry and Trade

In that context, this study will address the issues for Building industrial clusters infrastructure in Hanoi, Vietnam.

Research Question

Question 1: What is the real situation of industrial cluster infrastructure in Hanoi?

Question 2: What are other recommendations for industrial clusters infrastructure in Hanoi, Vietnam?

Literature Review

Industrial Cluster Infrastructure

The Vietnamese dictionary defines "Infrastructure as the whole system of works such as roads, electricity supply roads, water supply, drainage, waste... concerning the constructions and houses being built in that area. In our understanding, "infrastructure" is specialized works for production and social life, and "infrastructure" is also a construction, but built in a certain area. As we say, the scope mentioned in "infrastructure" is narrower.

Thus, it can be understood that the infrastructure/infrastructure is a specific part of the material and technical infrastructure in the national economy whose basic function and task is to ensure the necessary general conditions for the development of the economy. The extended production and reproduction process is normal and continuous. Infrastructure/ infrastructure is also defined as the totality of physical, technical, and architectural facilities that play a fundamental role for socio-economic activities to take place normally.

Mr. Hank Tomlinson (President of the American Chamber of Commerce) said:

“There are two types of infrastructure; hard infrastructure such as roads, energy, electricity, and soft infrastructure, education and labor quality issues. With soft infrastructure, the Government needs to focus on promoting and improving the quality of labor to meet the needs of high-tech investors (Hammoodi et al., 2019). High-tech investors cannot invest in places with low-quality labor. In addition, soft infrastructure is also the economic management regulations of the Government, this is also an important factor that always needs to be improved to make it simple for production and business activities to be conducted safely and effectively”.

Then we summarize previous studies in Table 1 below:

Table 2. Related previous studies

(source: author synthesis)

Beside, studeis pointed Putting Porter into practice? Practices of regional cluster building with evidence (Lundequist & Power, 2002; Trinh, 2016; Le, 2020; Jankowiak, 2021).

MATERIALS AND METHODS

Authors mainly use experiences, observations, practical situations with cases studies of industrial clusters in Hanoi, Vietnam combined with qualitative analysis, synthesis, and explanatory methods.

This study also uses historical and dialectical materialism methods, with data and statistics in Hanoi, Vietnam.

Main Findings

Overview of the Development of Industrial Clusters in Hanoi 

The below Table 3 show us completion ration still low in some areas (Son Dong, Binh Minh, Dong Giai)

Table 3. List of industrial clusters under construction until 2010

*: The industrial cluster is deployed according to the specific mechanism of Ha Tay before (the investor builds the infrastructure by himself according to the approved detailed plan).

Source: Hanoi Department of Planning and Investment

- 5 CCNs (Table 4) and 7 FCNs are carrying out site clearance and preparing to build technical infrastructure.

Table 4. List of industrial clusters that are clearing land or building technical infrastructure

Source: Hanoi Department of Planning and Investment

- The remaining number of industrial clusters currently the city has no policy to deploy or prepare for investment (most of them just stop at the approval of detailed planning, projects, investor selection). or is adjusting the planning or suspending implementation pending the results of the planning review. Moreover, in below Table 5, we see that there are 11 industrial clusters waiting for changes.

Table 5. List of industrial clusters waiting for planning changes

Source: Hanoi Department of Construction

The Main Occupations Operating at the Industrial Clusters in the City at Present are Mainly

• Producing building materials and interior decoration: ceramic tiles, ceramics, ...
• Producing and processing food: beer, wine, beverage, instant noodles, vermicelli, confectionery, animal feed, .....
• Mechanical production and processing: assembling cars, manufacturing mechanical products, rolling and pulling steel, manufacturing and processing mechanical products for agriculture, mechanical engineering, assembling traffic equipment, ...
• Producing consumer goods, chemicals, and agricultural materials: export garments, export shoes, construction glass, preliminary processing of rubber, recycled plastic, fertilizer production, ...
• Processing forest products: Producing household wood products for export, plywood, bamboo, and rattan handicrafts.
• Producing electrical appliances, assembling electronics and electrical equipment.

The authors’ comments on the recent development of industrial clusters in Hanoi are as follows:

First, Industrial clusters in Hanoi has increased rapidly in both quantity and scale, contributing to meeting a part of the demand for production space of enterprises, especially small and medium enterprises; serving the purpose of relocating polluting production facilities or interspersed in residential areas; partially solving the problem of environmental pollution in residential areas. In many localities, the development of industrial zones has played an active role in the consumption of agricultural, forestry, and fishery products, goods (developed by the processing industry), creating jobs and increasing incomes for local workers. improve farmers' lives and modernize rural areas.

Second, the industrial clusters located in the inner city tend to change the purpose from industrial production to commercial services (for example Hoang Mai, Cau Giay, Yen Nghia...). Although slow, most of the industrial clusters have started to build and complete according to the plan. However, the implementation situation of the forestry clusters is very slow, even as Phu Xuyen District has not yet implemented any forestry programs. The result shows that: the more urban centers are planned in a locality, the higher the proportion of industrial parks that have not yet been implemented.

Recommendations for Industrial Clusters 

Focus on building infrastructure associated with environmental protection requirements of industrial clusters

The environment is a living condition for the survival and development of production and business. Environmental pollution is a condition in which the environment is polluted by chemical and biological substances that affect human health, living organisms and cause damage and difficulties to production and business. Environment and environmental pollution are major concerns in the development of industrial clusters, it is one of the goals of the establishment and development of industrial clusters. Industrial clusters still have not made any progress in solving environmental pollution. Through some preliminary surveys in some craft villages, industrial clusters showed that “The quality of wastewater from craft villages in recent years has shown that the pollution level has not decreased but tended to increase. In craft villages processing agricultural products and food, surface water in many places has COD, BOD5, NH4, Coliform concentrations exceeding tens to hundreds of times the Vietnamese standards; Surface water in weaving and dyeing villages is also heavily polluted; COD is 2-3 times higher than Vietnamese standards, BOD5 is 1.5 - 2.5 times higher, Coliform content is also quite high. In bamboo and rattan craft villages, in many places, the COD content in surface water has exceeded Vietnam's standards, because bamboo and rattan must be soaked in water and the processing and treatment process generates wastewater containing a lot of lignin and organic matter. The main reason for the surface water here is that COD, BOD5, NH4, Coliform content exceeds QCVN many times, the water has a rotten smell and is cloudy. According to air quality monitoring data in several craft villages by the Center for Urban Environmental Engineering and Industrial Park recently, most of the craft villages have dust content exceeding the allowable standards. The concentration of SO2 gas in bamboo and rattan craft villages in Giang and processing agricultural products and food is higher than permitted standards”. Therefore, it is necessary to have the right perspective and full awareness of environmental issues. According to the author, the point of view on the environment for industrial development and industrial infrastructure construction should be emphasized by:

Through a survey in a microbial fertilizer manufacturing company in Duong Lieu Industrial Park (Box 1), the author also found that there is a pretty good model of waste treatment of this industrial park, this is also a new model for industrial clusters to study and consider. its feasibility when applied to its industrial clusters.   

Source: Survey at Duong Lieu Industrial Park

+ Encourage production and business establishments to apply clean technology and environmentally friendly technology.

The city should have policies to encourage and give priority support to production and business establishments that apply clean and environmentally friendly technologies such as gas instead of coal, firewood in ceramic production, and charcoal production. Bees make use of the residues of buckwheat. High technology is a progressive and inevitable trend to solve environmental pollution in craft villages and industrial zones. Besides, it also promotes research and production of industrial clusters' environmental treatment technologies and equipment with reasonable prices to equip and apply in industrial clusters to actively contribute to the environmental protection of industrial clusters.

Set up an environmental monitoring system.

Industrial clusters need to build and invest in upgrading the operational capacity of the environmental monitoring system (Monitoring) in the cluster. Through this environmental monitoring system, it is possible to timely, accurately assess, and strictly control the status of environmental quality as well as the level of environmental pollution in the air, water, odor, noise, in the environment. area and its impact on the adjacent area. From there, there are timely and effective technical measures to ensure environmental quality in general.

+ Establishing an environmental service center.

Management boards of industrial clusters can organize and provide environmental services to achieve environmental goals, generate new income and improve attractiveness to investors. The services of industrial clusters provided to manufacturing facilities can include many areas such as:

• Wastewater collection and treatment services, solid waste treatment.
• Environmental monitoring service.
• Environmental education and training services.
• Service of providing information about the environment.

Management boards of industrial clusters can organize and support environmental services. These amounts can be compensated when collecting fees for wastewater treatment, solid waste recovery and treatment, inspection and assessment of the quality of input materials and output products according to environmental objectives, and environmental training. schools, technical consulting services. These services can be assigned to the environmental service center to perform as the management boards that are required to coordinate and monitor these activities.

Improving the Quality of Infrastructure Construction Works for Industrial Clusters

Products of the industrial infrastructure include tangible products (internal roads, electricity supply network, water supply, telecommunications services, wastewater treatment works...) and intangible products (training), public administrative services, security, culture...). These products are formed and developed through construction investment projects. Investment projects are implemented through a continuous process from investment policy to design, bidding, construction, handover and then putting into use (Figure 1).

The quality of construction works (internal roads, electricity networks, telecommunications facilities, wastewater treatment works...) is assessed by the degree of satisfaction of construction and use requirements.  

The work and steps of quality management can be modeled in the diagram.

To ensure and improve the quality of construction works of industrial infrastructure, it is necessary to implement several measures as follows:

First, Implementation of published construction standards and technical regulations that promulgate and develop some technical standards for industrial clusters technical infrastructure works

Construction standards are an effective tool to ensure and improve the quality of construction works of industrial clusters' infrastructure. The number of building standards is numerous and specific. Those are the standards for the processes: survey, design, construction, preservation, and maintenance of the works. In terms of objects, which are: material standards, construction product standards, environmental standards, process standards.

The works of industrial clusters infrastructure are relatively new construction products, so many new standards need to be developed.

Source: Vietnam Construction Code 01: 2008/BXD

(2). Strengthen the quality management of survey, design, and construction of industrial infrastructure.

Survey and design are important stages of the whole construction investment process. Over the years, these activities have had positive changes; contribute to improving the quality of the works and gradually improving the investment efficiency of the projects. However, in reality, there are still many construction works that are not suitable with reality when they are constructed, causing waste in investment. , which directly affects the exploitation and use process. The cause of the above situation, first of all, is due to the awareness of responsibility in managing the quality of construction survey and design works of the subjects involved in construction activities, including investors, private Project management consultants, construction consulting contractors, as well as some State management agencies in charge of construction, are still incomplete. The survey work has not been carried out following the survey process, the survey data is not suitable, there is not enough data to serve the design work. The design work has not yet implemented the regulations on checking capacity conditions for construction activities, formulating and approving tasks for design work; the design is not consistent with the approved construction planning; the application of standards and regulations is not uniform, there are still many limitations and shortcomings, or the regulations of the national technical regulations and the Vietnam Construction Regulations have not been applied or fully applied. The handling of violations on survey and design quality is not strict and timely, affecting the quality of construction works.

To overcome the above situation, to improve the quality of industrial infrastructure construction works, the survey and design of industrial infrastructure construction works should take the following measures:

• For state management agencies, it is necessary to: develop a plan to open training courses on standards and regulations related to survey, design and construction; Organizations to develop and guide the management process, inspection contents, and handling of violations for organizations and individuals whose acts of operation exceed the conditions for practice capacity, operate in contravention of the practicing certificate. , operating without a practicing certificate; Periodic inspection of owners of industrial infrastructure design survey and design works.
• Investors (or authorized project management units) investing in the construction of industrial infrastructure works have the responsibility to Properly and fully perform the rights and obligations of the owner of the surveying and designing consultancy contractor with the qualification. legal person, having the appropriate professional capacity and experience as prescribed. When appraising, approving, or accepting survey and design products, the capacity conditions of organizations and individuals performing survey and design work must be considered.

3. . Improve construction capacity and strengthen construction management including Construction progress management, construction volume management, work safety management on construction sites, management of construction environment.
4. . Develop and implement criteria and quality criteria for the construction of works of industrial infrastructure. The criteria and targets could be:

+ Investment rate for 1 hectare of land of industrial luster (CCN);

+ Design samples for each type of industrial luster;

+ Functional subdivision in 1 industrial luster.

The planning of functional subdivisions is carried out according to the specific conditions of each zone and cluster according to the motto of saving land fund, improving infrastructure investment efficiency, per current design and construction standards. . The following guidelines can be applied:

* Land for construction factory, factory: 55 - 65%

* Land for construction, technical works: 1.0 - 1.5%

* Land for construction, management, and administration center     1.0 - 1.5%

* Construction land transportation works 8 - 12%

* Land for supporting services and trees  12 - 20%

+ Each industrial luster must build at least 1 wastewater treatment station and 1 power supply transformer station.

+ The solid waste is concentrated in the technical treatment area and transported to the prescribed place for treatment according to the general planning of the City. Industrial waste and scrap yards must be fenced and not adversely affect the sanitary conditions of the surrounding production and business establishments and do not contaminate the environment. Dumpings of hazardous wastes (inflammable, explosive, epidemic…) must have measures to handle toxic substances and ensure isolation distances.

+ It is necessary to arrange a road for the fire truck outside to run along at least one side of the house, to ensure that the fire truck reaches the place where the fire fighting water is collected (fire hydrants, fire fighting water storage tanks, etc.)

Industrial cluster infrastructure is a combination of physical, technical, and social facilities that play a fundamental role in the development and operation of industrial clusters. Industrial clusters infrastructure is divided into 2 categories: technical infrastructure (hardware) and social infrastructure (software).

Soloveva et al. (2021) and Zohra and Mustapha (2019) pointed out regions and industries can increase (competitiveness) by cluster policy and for innovative potential as well. 

To build industrial infrastructure, it is necessary to understand: indicators reflecting industrial infrastructure; construction process, and factors affecting the construction of industrial infrastructure

CONCLUSION

The State's policies on building infrastructure for industrial zones include: i) The policy of acquiring land fund for the construction of industrial infrastructure; ii) policy on planning for industrial development and infrastructure construction planning; iii) Policy on investment and construction of industrial infrastructure; iv) Policy on management of construction investment projects; v) Policy on construction quality management.

Experience in industrial development and industrial infrastructure construction in some countries and provinces in the country has helped Hanoi City draw lessons that can be learned in the development of industrial infrastructure in Hanoi.

After describing and analyzing the following issues: i) Natural conditions and socio-economic characteristics affecting the construction of industrial infrastructure in Hanoi city; ii) Development situation of industrial zones; iii) Situation of policy formulation and implementation; iv) Industrial development planning and detailed planning of industrial infrastructure; v) Situation of construction of constituent elements of industrial infrastructure; vi) Case study on infrastructure construction of some industrial complexes in Hanoi city. The author has assessed the construction of industrial infrastructure in Hanoi city. The results and advantages of building industrial infrastructure are: Focusing on investment and planning; Through many years of construction and development, the city has built a relatively synchronous technical infrastructure system to meet the requirements of industrial development; Combine the development of industrial clusters and industrial infrastructures with the new rural construction program; Promoting the role of the State in the construction of industrial infrastructure.

Also risk management task in clusters need to be considered (Huy & Hien, 2010; Dat et al., 2020; Hang et al., 2020; Huong et al., 2021; Thi Ngu et al., 2021).

And also we need more researches in journals conducted (Yen & Huong, 2010; Hai et al., 2021; Hoa et al., 2021; Hoang & Huy, 2021; Huy & Thuy, 2021; Thi Hang et al., 2021; Tinh et al., 2021).

Research Limitation

Authors need to analyze comparisons for other countries and other markets.

ACKNOWLEDGMENTS: The author would like to thank the editors, friends, and all persons who assisted in this publication.

CONFLICT OF INTEREST: None

FINANCIAL SUPPORT: This research is funded by National Economics University (NEU), Hanoi Vietnam.

ETHICS STATEMENT: None