Samsung in Vietnam: FDI, Business–Government Relations, Industrial Parks, and Skills Shortages

Abstract

AbstractSamsung has largely shifted its electronics manufacturing out of China, and mostly to Vietnam. In that process, it has, to date, avoided local labour market (LLM) difficulties faced by its subsidiaries in industrial parks in China: in particular, pervasive skill shortages among the electronics assembly workers on whom Samsung’s manufacturing depends. Labour retention problems in China had significantly challenged its commitment to invest in necessary employee training. By contrast, Samsung’s domination of foreign direct investment (FDI) within particular Vietnamese industrial parks has removed the inter-employer competition it experienced in China. A deeper explanation involves Samsung’s development – as Vietnam’s largest single source of FDI, and major producer of that country’s exports – of synergistic and symbiotic relationships with Vietnam’s national and subnational governments. These relationships have allowed Samsung to influence development strategies for industrial parks and their LLMs. Samsung has invests expansively in forms of education and training whose benefits extend beyond the areas in which its manufacturing facilities operate, to populations that the company does not employ. Providing benefits beyond typical success criteria for FDI in developing economies, Samsung has helped Vietnam’s party-state meet its own legitimacy needs with its internal constituencies, contributing to a broader practical consensus in favour of the party-state’s development policies. This article therefore widens the perspective of FDI to embed it in national and subnational business–government relations.