Abstract

This paper analyzes the capability of small and medium-sized enterprises (SMEs) in Vietnam’s manufacturing and processing industries to participate in industrial clusters and value chains through four dimensions: production capability, linkage and networking capability, innovation capability, and adaptive capability. Data were collected from a survey of 325 manufacturing SMEs located in major industrial provinces and cities of Vietnam (Hanoi, Vinh Phuc, Ho Chi Minh City, Vung Tau, Dong Nai, Binh Duong, Hai Duong, and Hung Yen) using a convenience sampling and analyzed through descriptive statistics. The results reveal that only 13.8% of firms possess sufficient capability to participate in clusters and value chains, 56% have potential for improvement, and 30.15% lack the necessary capability. Among the four dimensions, production capability is rated the highest, while linkage–networking and innovation capabilities are the weakest, particularly in association participation, R&D investment, and market research. Based on these findings, the paper proposes several strategic directions to enhance SMEs’ participation in industrial clusters and value chains, including: (i) improving the legal framework and support mechanisms; (ii) enhancing the investment and business environment; (iii) strengthening the leading role of large enterprises in supporting SMEs; (iv) promoting the roles of research institutes, universities, and business associations; and finally, (v) encouraging SMEs in the manufacturing and processing sector to transform their mindset and strategic orientation.