Doctoral thesis summary Business administration Development of Non Nuoc traditional stone carving village

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THE UNIVERSITY OF DA
NANG UNIVERSITY OF
ECONOMICS
PHUNG VAN THANH
DEVELOPMENT OF NON NUOC TRADITIONAL
STONE CARVING VILLAGE
Major: Business Administration
Code: 62.34.01.02
DOCTORAL THESIS SUMMARY

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Da Nang – 2022

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THE UNIVERSITY OF DA NANG
The work was completed in
UNIVERSITY OF ECONOMICS
Supevisors:
1. Ass. Prof. Dr. Pham Thi Lan Huong
2. Dr. Le Thi Minh Hang
Objection 1: ………………………………………
Objection 2: ………………………………………
Objection 3: ………………………………………
The dissertation defended before the Board dots thesis the
University of Economics granted on …………………..
Can learn dissertation at:
- Materials Information Center – The University of Da Nang

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INTRODUCTION
1. The urgency of the thesis
Non Nuoc traditional Stone Carving village is a famous craft village
with a long history of formation and development. Craft villages play an
important role in the socio-economic development of the locality. Craft
villages are facing huge market opportunities, but there are still many
limitations that do not ensure sustainable development such as: Small scale
of production and business; low production - business results; the amount
of accumulated capital to invest in business development is not high, it is
difficult to raise capital to expand production and business; linkage
activities between production and business establishments with each other
and with related organizations are limited, product quality is uneven,
competitiveness is not high, innovation is still low, and low-educated
workers, inadequate mechanisms and policies, problems of environmental
pollution, infrastructure that is although invested but there are still many
shortcomings, problems with output markets for products are facing many
difficulties. The industry linking cluster theory is widely used in the world
as a theoretical basis for research to improve the competitiveness of
industry and service industries. Therefore, the author chooses the research
topic: “Development of Non Nuoc traditional Stone Carving Village”
According to the approach method of industry linking cluster, it will solve
the current problems of the locality, in line with the current development
trend in the region and in the world, helping craft villages to develop
sustainably.
2. Research questionnaire
What is an industry cluster? What are the characteristics of the industry
cluster and what role does it play in the effective and sustainable
development of traditional craft villages?
Explain the correlation between the cluster development model and the
characteristics of the craft village? (Identify traditional craft villages as
clusters of industry links)
Why do you think that the model of clustering can be used to develop
Non Nuoc stone craft village?

Criteria to evaluate the conditions for sustainable development of craft
villages in the direction of industry clusters?
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The development status of the Non Nuoc Stone Carving Village of in
recent years, analyzing the production and business situation of craft
village enterprises, the conditions for the development of traditional craft
villages in the direction of industry clusters, advantages and limitations of
those conditions?.
In the coming time, how does Non Nuoc Stone Carving Village
develop in the direction of industry clusters and what measures should be
taken to promote the formation and sustainable development of handicraft
villages in the direction of industry clusters?
3. Research objectives
3.1. General objectives
Provide a theoretical system on industry linking cluster, assess the
need and conditions for developing craft villages in the direction of
industry linking cluster
3.2. Specific objectives
- On the basis of clarifying the theoretical basis for the development of
traditional craft villages in the direction of industry linking cluster,
analyzing the current situation of craft villages and proposing some
solutions for sustainable development of Non Nuoc traditional Stone
Carving Village.
4. Research subjects and scope
4.1. Research subjects
The theoretical and practical issues on the development of Non Nuoc
traditional Stone Carving village in the direction of industry clusters
4.2. Research scope
Enterprises, production and business establishments in Non Nuoc
traditional Stone Carving village and related parties, the secondary data is
collected for many years in the period 2015-2020, primary data in the
period 2017-2020.
5. Research Methods
5.1. Research approach
The research will follow different approaches: participatory approach,
cluster-based approach to industry linkages through the craft village

product value chain, and socio-economic and environmental field-based
approach.
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In particular, special attention is paid to the approach to research and
development of Non Nuoc Stone Carving Village in the direction of
developing into an industry-linked cluster from different angles. In line
with the specialized nature of Business Administration, the author chooses
an approach to research on the formation and development of industry
clusters of Non Nuoc Stone Carving Village from the perspective of
businesses and linkages between enterprises in the production and business
process. That is, studying the conditions for the formation and development
of a cluster of associations of Non Nuoc Stone Carving Village through
studying the process of agglomeration and centralization of production by
enterprises in the craft village to effectively organize vertical and
horizontal linkages in the value chain of Non Nuoc Stone Carving Village.
In addition, the study of some contents related to state management
agencies is mainly to clarify the roles and responsibilities in ensuring the
conditions for the development of linkages between enterprises in the
cluster of craft village in line with the increasing development requirements
of the domestic and world markets.
5.2. Research Methods
On the basis of research approach with participatory and cluster-
industry linkages through the value chain of craft village products as well
as the socio-economic-environmental approach. The study was designed
and conducted based on the combined assessment of producers, enterprises,
and managers and combined information sources for analysis. Secondary
data sources were collected from the Statistical Yearbook of the General
Statistics Office, the Statistical Yearbook of the Danang Statistical Office,
the Ngu Hanh Son District Statistical Office, Da Nang Socio-Economic
Development Research Institute, reports of city departments and agencies
and Ngu Hanh Son district. Primary data sources were collected from
surveys, interviews with production and business enterprises in the on
Nuoc Stone Carving Village, experts, central and local managers.
Collected data was coded and entered by Excel software; Analyze data,
calculate statistical parameters, analyze statistics and interpret results using
SPSS statistical software. Analytical, descriptive and comparative methods
were mainly used in the research process.
6. Scientific contributions of the thesis
6.1. Theoretical contributions

- From theoretical research on clusters of industry linkages, based on
agglomeration, to centralize businesses into geographical areas and
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territories, and to link vertically and horizontally between stages in the
product value chain. together with the inheritance of previous studies on
craft villages to build a theoretical basis for the development of traditional
craft villages in the direction of industry clusters, the thesis has clarified the
nature, basic characteristics and roles of traditional craft villages. The role
of the formation and development of industrial clusters with the effective
and sustainable development of enterprises in the value chain of traditional
craft villages.
- Develop criteria and conditions for developing traditional craft
villages in the direction of industry clusters to ensure sustainable
development of craft villages. The thesis has specified 5 basic conditions
that have a direct impact on the formation and development of clusters of
trade villages: (1) The accumulation and concentration of enterprises by
geographical area; (2) The linkage along the value chain of craft village
products; (3) Competitive advantage; (4) Innovation; (5) Mechanisms,
policies and management of the state.
6.2. Practical contributions
Applying the basic theoretical problems of clusters of industry linkages
in accordance with the characteristics of traditional craft villages, from
analyzing the overview features of the development of the Nuoc Stone
Carving Village, the thesis has come to an in-depth analysis of the current
situation of accumulation and centralization of production by enterprises
and production facilities in craft villages, the status of vertical and
horizontal linkages between enterprises and production facilities businesses
and related organizations in the craft village according to the value chain of
craft village products. Since then, the thesis has clearly assessed the needs,
favorable premise conditions and obstacles in the process of sustainable
development of craft villages in the direction of industry clusters.
On the basis of SWOT analysis, the thesis has clarified the scientific
argument to orient the formation and development of the cluster of
associations of Nuoc Stone Carving Village. The core orientation is that
enterprises, production and business establishments in craft villages are
able to widely develop linkages in the value chain of craft village products,
and at the same time bring into play the advantages of industrial clusters of
Nuoc Stone Carving Village.

The thesis proposes 6 main solutions for sustainable development of
craft villages in the direction of industry clusters, which are: Solutions on
promoting the accumulation and centralization of enterprises producing and
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trading handicraft stone products in craft villages; Solutions on promoting
the development of linkages between craft village enterprises and
stakeholders (vertical linkage, horizontal linkage) along the value chain of
craft village products; Solutions on promoting competitive advantage for
craft villages through solutions such as human resource development
solutions, materials solutions, capital solutions, infrastructure upgrades, and
technology solutions; Innovative solutions; Solutions on mechanisms and
policies, the management of the state; Group of solutions on environmental
protection of craft villages, on trade and market, Land policy, promoting
the role of craft village associations.
7. Structure of dissertation
Chapter 1: Theoretical and practical issues of developing traditional
craft villages in the direction of industry linking cluster.
Chapter 2: Research design
Chapter 3: Development Status of Nuoc Traditional Stone Carving
Village.
Chapter 4: Orientation and Solutions for developing Nuoc Traditional
Stone Carving Village in the direction of Industry Linking Cluster
CHAPTER 1: THEORETICAL AND PRACTICAL ISSUES OF
DEVELOPING TRADITIONAL CRAFT VILLAGES IN THE
DIRECTION OF INDUSTRY LINKING CLUSTER
1.1. Theoretical basis of craft villages
1.1.1. The concept of craft villages
According to Dang Kim Chi (2005), Phan Huy Le (1995), Pham Con
Son (2004), Trinh Kim Lien (2013), Duong Ba Phuong (2001), all have
common views on the village is: “Craft village is a place where focus
handicrafts that formed in rural areas within a clear geographical area
and separated from agriculture, there is a class of craftsmen specializing in
craftsmanship, with a certain technological process and live mainly by that
profession and produce handicrafts, These items have handicraft
properties, products are served for domestic and exportable, have linkages
in production in the craft village”.
1.1.2. The concept of a traditional craft village
According to Dinh Xuan Nghiem et al (2010), Tran Quoc Vuong
(2012), Tran Minh Yen (2004) “Traditional craft villages are traditional
villages that exist and develop for a long time, formed in the countryside

within a clear geographical area, the craftsmen are highly specialized,
bring the main source of income, live mainly there is a link between
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production and business, economic, social and cultural relationship”.
1.1.3. Characteristics of traditional craft village
According to Le Thi Minh Ly (2003), Tran Minh Yen (2004), Tran
Doan Kim (2007), Trinh Kim Lien (2013), Tran Quoc Vuong (2012), Vu
Quoc Tuan (2011), Vu Ngoc Hoang (2016), Duong Ba Phuong (2001),
Dang Kim Chi (2005), Bach Thi Lan Anh (2010), the craft village has the
following characteristics: Long-standing, local culture in the geographical
area; There is connection but loose; Competitive capacity is still poor;
Current innovation has not been effective.
1.1.4. Classification of craft villages
- Classification by industry group: the village of brick and tile production;
agriculture, forestry and fishery; fine art carving stone, wood, ceramics;
mechanical welding, casting copper, cast iron, aluminum; textiles, hat
making, paper production, basket weaving; Creatures Pet.
- Classification by development history: traditional craft villages; new craft
villages.
1.1.5. The role of the craft village in the local socio-economic
development
Craft villages play a great role in the socio-economic development of
the locality, such as exploiting local human resources; preserving cultural
values of craft villages; economic restructuring towards modernity.
1.2. Theoretical basis for industry linking cluster
1.2.1. Concept of Industry linking cluster
There are many concepts about industry linking cluster that are given
by many authors such as Marshall (1890), Weber (1909), Becattini G
(1992), Sforzi,F.(1992), Kuchiki (2007), (Porter, 1998, 2003) All have
common concept is: “Industry linking cluster is geographic concentrations
of enterprises in the same industry or have similarities in the field of
production and business to take advantage of opportunities through
geographical linkage. The enterprises in the cluster will have a linkage
with each other for sharing requirements and have relationships with
related suppliers and customers. Enterprises in the cluster improve their
edge-to-edge capacity through collaborating with each other in
production; sharing experiences and information, sharing the same
technical infrastructure, human resources in the same industry, using
similar technology .., will be an advantage for businesses in industry

clusters. In addition, because enterprises are gathered in the cluster, it is a
catalyst for innovation and creativity in technology change, production,
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product design change and commercial issues”
1.2.2. Characteristics of industry linking clusters
Inheriting and synthesizing the researches of Porter (1985, 1990,
2007), Albumozhi et al. (2009), Andersson and Hansson (2004), Benner
(2012), Nguyen Binh Giang and Pham Thi Thanh Hong (2015), the
industry linking cluster has the following characteristics: the accumulation
of businesses; Linkage along the product value chain; Creation of
competitive advantage; Creative innovation; Policy mechanism and state
management.
1.2.3. The formation and development of industry linking cluster
According to research by Sonobe et al (2004), Porter and Watts (2011),
Benner (2009) and Sonobe & Otsuka (2006): The formation and
development of industry linking cluster, whereby there are initially a few
businesses start-up or develop a technology of a certain industry, followed
by other businesses to imitate and create rapid spread, when this industry
develops and makes profits, the more businesses come to the area. this area
and form an industry linking cluster.
1.2.4. The benefits of industry linking cluster
Synthesize the researches of Porter (1990, 2000b, 2008), Krugman
(1991), Granovetter (1985), Uzzi (1997), Rosenfeld (2002b), whereby:
Industry linking clusters create strength for businesses, increase production
efficiency due to reduction of costs, cohesion in social relations, promotion
of innovation - creativity, due to dense concentration of businesses, high
competitive pressure thereby promoting innovation, improving skills and
labor productivity.
1.3. Identification of traditional craft villages and industry linking
cluster
1.3.1. Comparison of characteristics of traditional craft villages and
- Same: Enterprises, production and business establishments gather in
geographical areas and have links, stimulating innovation and creativity.
- Different: Craft villages, although linked, are very loose; low
competitiveness, little infrastructure development investment, difficult
access to capital, the supporting industries are less developed. Industry
linking cluster is closely linked; high competitiveness, taking advantage of
shared infrastructure, human resources, favorable access to capital,
development supporting industries, many clear mechanisms and policies.

1.3.2. Conclusion from industry linking cluster
7

The traditional craft village is a primitive industry linking cluster,
which has not been fully developed, and there are still many problems to
develop to complete. Therefore, for the craft village to develop sustainably
in accordance with the current integration period, it is imperative to
develop the craft village in the direction of industry linking cluster.
1.4. Sustainable development of traditional craft villages according to
1.4.1. Development concept
Development is an evolutionary process of every society, every ethnic
community in which the movement moves in the upward direction from low
to high, from simple to complex, from less perfect to more perfect. The new
born replaces the old one, the modern replaces the outdated.
1.4.2. Sustainable Development
The development meets current requirements, but does not hinder for
meeting the needs of future generations.
1.4.3. Sustainable development of craft villages in the direction of
Sustainable development of the craft village in the direction of the
industry linking cluster is to ensure the continuous, stable and long-term
high economic growth of the industry linking cluster, enterprises in the
industry linking cluster rationally and efficiently use resources, contribute
to the implementation of social responsibility and protect the environment
inside and outside the cluster.
1.5. Overview about research situation relating to the topic
1.5.1. Researches in the world
There are many researches in the world related to craft village
development such as Das and Das (2011), industry linking cluster theory is
used to study handicraft village industry cluster in Barpeta, India;
Researches of Roostika, Wahyuningsih, and Haryono (2015), assessing the
impact of competitive factors on the handicraft industry in Bantul,
Yogyakarta Indonesia; and many studies by Sakata (2010), the authors
Nguyen, Nguyen, and Vo (2013) evaluate OVOP (One Village One
Product); Researches by Ardhala, Santoso, and Sulistyarso (2016) on craft
villages in the Indonesian city of Mojokerto; Research by Taylor and
Adelman (2006) has outlined the factors affecting the development of craft
villages.

1.5.2. Researches in Viet Nam related to craft village linking cluster
According to Nguyen Thi Nguyet (2015), assessing the possibility of
8

forming an industry linking cluster for industrial clusters in Vietnam;
Nguyen Dinh Tai (2017), Porter's theory of industry linking cluster (1990)
studies the conditions for forming an industry linking cluster; Vo et al.
(2012) propose to develop industry linking cluster network in Vietnam;
Studies related to craft villages by Le Xuan Tam (2014), Ho Ky Minh
(2011), Bach Thi Lan Anh (2010), Nguyen Dinh Hoa (2010), Dang Kim
Chi (2005), Dinh Xuan Nghiem et al. the (2010).
1.5.3. Conclusions from researches relating to the topic
- The issues that have been studied and discussed can be inherited: the
theoretical basis of craft village development with different traditional and
modern approaches.
- Issues that need to be further researched: craft village development in
the 4.0 revolution, the opportunities, challenges, and threats to the
sustainable development of traditional craft villages have not been
specifically explained. The region-linked approach is rarely mentioned.
1.6. Experience in craft village development
1.6.1. Experience in developing craft villages from a number of countries
1.6.1.1. Experience in developing craft villages in Oita - Japan
The movement "One Village One Product" with the idea of exploiting
local human resources to restore traditional crafts was launched from Oita
in 1979, producing products that are suitable for the market, authentic and
authentic to carry out projects suitable to their capacity and focus on
training crafting and production management skills for craft villagers.
1.6.1.2. Experience in developing Baan Baat Bowl Craft Village – Thailand
Inheriting lessons learned from the successful "One Village One
Product" movement of Japan, the support of Government in marketing,
sales promotion, training and technology transfer to people, organization of
fairs both nationally and internationally, support for product
standardization, packaging completion, marketing, organizing overseas
distribution channels and combining craft villages with tours
1.6.1.3. Experience in developing craft villages according to the model of
Township enterprise – China
With the policy of encouraging export, tax exemption and reduction
for Township enterprise, restricting the import of traditional handicraft
products in which China has strengths, transferring advanced and modern
technology to rural areas, craft village.

9

1.6.2. Experience in developing craft villages in some localities in the
country
1.6.2.1. Experience in developing Bat Trang ceramics village
Focusing on e-commerce, product design, forming a chain of ceramic
stores called Bat Trang Family Mart to bring genuine ceramic products to
consumers, applying franchise model.
1.6.2.2. Experience in developing Duyen Thai lacquer village
Hanoi has many policies to support the development of craft villages
such as creating favorable conditions for business and trade, supporting the
inclusion of craft village products in domestic and international fairs;
Planning on 6 tourist villages to promote products to domestic and foreign
customers.
1.6.2.3. Experience of La Phu knitting craft village industrial cluster
Promoting linkages in production between enterprises in craft villages,
establish business associations to help connect linkages in craft villages,
focus on large enterprises with leading credit to help the craft villages to
develop
1.6.3. Some experiences and lessons learned to apply to develop Non
Nuoc traditional Stone Carving village
The success of some craft villages in the world as well as some craft
villages in Vietnam is the basis for the development of Non Nuoc
traditional Stone Carving village such as focusing on human resource
development, having policies on capital, tax, credit, etc. technological
innovation, e-commerce, management capacity and support policies of the
state.
1.7. Conditions for sustainable development of traditional craft villages
in the direction of industry linking cluster and evaluation criteria
1.7.1. The accumulation of similar businesses in the same geographical
area
According to Weber (1909), he refers to clusters as follows:
"Industries tend to cluster in a certain geographical area to facilitate the
most cost reduction in order to maximize profits; it is to reduce
transportation costs, labor costs, and the economics of clusters”.
1.7.2. The connection of craft villages with the product value chain
According to research by Hirschman (1958), Tambunan (2005), Gibbs

and Bernet (1997), Marshall (1926), Smith (1776), Porter (1990), Hass and
Richard Capella (2006), Mushi (2003) [76] ],.., then the linkage includes
backward linkages, upstream linkages and forward linkages, downstream
10

linkages to study sectoral and interdisciplinary relationships.
1.7.3. Competitive advantage
According to Porter (1990a), competitive advantage is what makes a
business stand out, while other competitors could not implement
1.7.4. Innovation
According to Wang and Pervaiz (2007), Björkdahl and Börjesson
(2012), innovation is the ability that businesses have to turn creative ideas
that combine input resources into products that match the needs of the
market
1.7.5. State policies and mechanisms
According to Nguyen Binh Giang and Pham Thi Thanh Hong (2015),
industry linking cluster policies are state and local government initiatives to
promote industry convergence.
1.8. Summary of Chapter 1
From the basic theoretical basis of industry linking cluster, craft village
development, the author has analyzed and built the conditions for
developing traditional craft villages in the direction of industry linking
cluster, contributing to effective and sustainable development the
traditional craft villages in the process of international integration.
CHAPTER 2: RESEARCH DESIGN
2.1. Approach method
2.1.1. Participatory Approach
Participatory approach is used throughout all stages and contents of the
topic such as: survey, investigation, analysis and assessment of the current
situation and development of solutions with the participation of all
stakeholders.
2.1.2. Approaching the industry linking cluster through the value
chain of handicraft products
In the product value chain, each stage is a link and there are many links
in the same chain. Analyze and evaluate the level of linkage in production
between the stages in the chain from input to production to the final stage
to the consumer.
2.1.3. Approaching in the field of economy, society and environment
Approach on all three fields of economy, society and environment to
comprehensively assess the craft village and propose appropriate solutions
to develop the craft village.

2.2. Research process
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Consists of 5 steps: (1) General research and theoretical foundation
build; (2) Conduct preliminary research by qualitative method; (3) Practical
research; (4) Analyzing and processing information for research; (5)
Propose orientation and solutions.
2.3. Research methods
2.3.1. Data collection methods
- Secondary information are implemented by steps of defining the
research problem; Identify data and information to be collected; Locate the
source of information; Information evaluation; Use information.
- Primary information is carried out through surveys of relevant
subjects in the craft village such as enterprises, production facilities and
related stakeholders.
- Develop a questionnaire in addition to the general parts, there are
sections related to each research problem.
2.3.2. Research methods
The research was carried out in two steps: preliminary research and
formal research. Preliminary research was carried out by using
documentary research methods, observation techniques and in-depth
interviews and group discussions. The study was formally carried out by
quantitative methods with primary and secondary data sources, descriptive
and comparative statistical methods for analysis with the use of evaluation
criteria of each factor affecting the quality of life, sustainable development
of craft villages.
2.3.3. Questionnaire design
On the basis of research; Summary of criteria for evaluating the
development of craft villages to build a questionnaire system suitable to the
research problem
2.4. Summary of chapter 2
Presentation on research approach, research process and research
methods.
CHAPTER 3: DEVELOPMENT STATUS OF NUOC
TRADITIONAL STONE CARVING
VILLAGE 3.1. Overview of the craft village
3.1.1. The formation and development of Non Nuoc traditional Stone
Carving Village

Non Nuoc traditional Stone Carving village has a history of
development over 400 years. Currently, the craft village is thriving with
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more than 550 production facilities/enterprises with more than 4,000
employees and is planned into a concentrated production cluster with an
area of 35.5 hectares in Hoa Hai ward. Products of the craft village are not
only present everywhere in the country but also exported to many countries
around the world, contributing greatly to the local economy.
3.1.2. Position and roles of Non Nuoc traditional Stone Carving Village
Non Nuoc traditional Stone Carving village plays a very important role
in the socio-economic development and pride of Ngu Hanh Son district and
Da Nang city. Craft villages not only create jobs for people in locality and
surrounding areas, but also become attractions for domestic and foreign
tourists when coming to Marble Mountains.
3.2. Analyzing the development situation of Non Nuoc traditional Stone
Carving Village in the investigation establishments
3.2.1. Evaluation of the scale of production and business in craft villages
Synthesizing, analyzing and evaluating the statistical data on the
number of workers, the number of concentrated production establishments
in the craft village today; Information on the capital scale of production and
business activities of craft village production establishments is also
evaluated and compared with the common benchmark in the district and Da
Nang city.
3.2.2. Evaluation of human resources in craft villages
Assessing the quality of human resources, including establishment
owners and workers in craft villages on their educational qualifications,
vocational skills as well as training and retraining for the workforce in the
craft village today; Besides, it also evaluates and compares the average
monthly income of workers in the craft village with the general average
income in the district and city.
3.2.3. Evaluation and assessment of the situation of investment plans in
machinery and equipment to improve models
Evaluation of the annual investment plans for machinery and
equipment for production of production facilities in the craft village,
improvements in designs, diversification of craft village products as well as
advantages and disadvantages in the implementation process
3.2.4. Raw materials and product consumption markets of business
establishments in craft village

Raw materials for production of business establishments such as
sources of supply, purchasing methods and product consumption markets
of craft villages are analyzed in detail to see the overall picture of inputs
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and outputs of craft village.
3.2.5. Assessment of difficulties in the production and business process of
establishment in craft villages
The survey results assess the current situation at Non Nuoc traditional
Stone Carving village which currently facing many difficulties and
inadequacies that need to be solved such as: difficulties in human
resources; difficulties in cooperation and association in craft villages;
difficulty in capital for production; difficulties in the supply of inputs;
difficulties in accessing science and technology; salary difficulties;
difficulties in improving skills for workers; environmental treatment
difficulties; inadequacies in infrastructure.
3.2.6. Actual situation of building a linking chain of tourism craft
villages
Analyzing the advantages of tourism with the geographical location of
the craft village formed and developed in association with the Ngu Hanh
Son relic site, the advantages of the craft village that are close to the major
tourist attractions of Da Nang and Hoi An. On that basis, the author
assesses the advantages and disadvantages in building a linking chain of
tourism craft villages today.
3.2.7. The State's mechanisms and policies affecting the production and
business activities of enterprises in craft villages
3.2.7.1. Policy on plan of building and development of craft villages
In recent years, the policy of craft village development has been paid
attention; the state has invested in building an industrial cluster of a trade
village with an area of 35.5 hectares at the location adjacent to Hoa Hai and
Hoa Quy wards, Ngu Hanh Son district to gather production establishments
into the craft village.
3.2.7.2. The organization and management of the craft village
Although the city and local authorities have concerned about the
organization and management of craft villages over the past time, the
quality of coordination among agencies and units in supporting craft
villages still has shortcomings leading to not high quality, many difficult
problems of the craft village cannot be solved.
3.2.8. Some of the environmental and social impacts of craft village
development
3.2.8.1. Social impact

- Solve jobs for employees
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- Creating income for employees
The survey results on the income of employee working at production
establishments in craft villages in the period 2017 to 2019 with a very high
income, on average from 7.5 million VND/month to nearly 9.8 million
dong/month.
3.2.8.2. Impact on the environment
Wastewater pollution; noise and air pollution problems: at a high level
with the average score for the level of air and noise pollution of production
and business establishments in the craft village with a very high rating of 4,
39 ĐTB/5 and 4.44 DTB/5, showing the very pollution level at present in
the craft village; Solid waste pollution, inadequate infrastructure for craft
villages.
3.3. The status of assessing the conditions for developing traditional
craft villages in the direction of sustainable industry linking cluster
3.3.1. For the centralized accumulation of production of enterprises
The regional similarity LQ >1, therefore, the current craft village has a
high concentration of industry linkages and is the basis for affirming the
potential of forming an industry linking cluster at Non Nuoc traditional
Stone Carving village..
3.3.2. The connection of craft villages with the product value chain
In the average rating scale, there are rating points such as: the linkage
between the manufacturer and the traders (customers who consume
products) with a rating of 3.37 average score/5; Linkage between
equipment suppliers, the rating score is 3.09 average score/5; Linkage
between service providers, the rating score is 3.03 average score/5. The
price evaluation at a fair level includes the relationships: Linkage between
the manufacturer and the equipment supplier, the rating score is 3.69
average score/5; Linkage between manufacturers and service providers
(transportation, cargo insurance, packaging, banking, electricity,
information, ..), the rating score is 3.74 average score/5. These are the two
highest scoring levels in the survey. These relationships need to be further
promoted in the coming time.
3.3.3. The current situation of competitive advantages of enterprises in
craft villages
Survey results assess the level of competitive advantage of enterprises
in the craft village such as the cost of the business when producing

products, with an evaluation score of 2.49 average score/5, this rating is
low. This shows that the higher and higher the cost when production affects
15

competition in the market. The scores for assessing the input conditions of
enterprises in the craft village are at a specific weak level: the capital
assessment score is 2.57 average score/5; raw materials score 2.56 average
score/5. It shows the difficulty of capital and raw materials in the
production process. However, in addition to other competitive advantages
such as infrastructure of 3.5 average score/5, evaluation of the difference is
3.55 average score/5, human resource price is 3.46 average score/5. That
proves that the current craft village enterprises have a competitive
advantage in human resources, infrastructure and the difference.
3.3.4. Innovation situation
Innovation in the craft village has rating from 2.49 average score/5 to
3.62 average score/5. The level of product innovation of enterprises in the
craft village with the highest score in the innovation items is 3.62 average
score/5. That proves that the products of Non Nuoc traditional Stone
Carving Villages are always innovated and developed to meet the needs of
rich customers today. However, the scores assessed in the process of
production methods 3.30 average score/5; innovation in market exploitation
3.23 average score/5; innovation in marketing method 2.63 average score/5
is average, so it needs more attention in the coming time.
3.3.5. Situation of state policies and mechanisms
The evaluation results show that the level of impact of laws and
policies on the development of craft villages is only average with a rating
of 2.65 average score/5 to 3.02 average score/5. This shows the limited
impact of the policy on craft villages.
3.4. Conclusions drawn from the assessment of conditions for the
development of traditional craft villages in the direction of sustainable
3.4.1. Evaluate the centralized accumulation of enterprises in a
geographic area
3.4.1.1. Strengths
In addition, through analysis of the survey by the formula for
calculating the similarity of LQ region and accordingly with LQ = 1,102>1,
the ability to concentrate on industry linkage helps the craft village to
develop in the direction of sustainable industry linking cluster.

3.4.1.2. Threats
16

The arrangement of businesses into production still has many
shortcomings such as the limited area divided for factory construction,
affecting the production process for businesses.
3.4.2. Assessing the linkage according to the value chain of craft village
products
3.4.2.1. Strengths
Linkage leads to convergence of businesses in the same industry in a
geographical area. Economic linkages between businesses are of great
benefit to all stakeholders, including businesses and the community. The
linkage between management agencies will help support craft villages to
have better support in the development process.
3.4.2.2. Threats
The level of linkage between entities in the craft village is still loose;
many linkages are very weak, leading to difficulties in the production and
business process. The linkage between state management agencies has been
paid little attention; so many policies to support trade villages have not
been specifically implemented, leading to low effectiveness.
3.4.3. Evaluation of competitive advantages in the current craft village
3.4.3.1. Strengths
Non Nuoc traditional Stone Carving Village is planned in a
concentrated production area, so it has many advantages in reducing
production costs because its proximity to geography creates economic
advantages thanking to its scale, helping to reduce production costs,
strengthening linkage, and sharing information and other resources. Small
and medium enterprises in the craft village will have the opportunity to
access investment capital, investment markets and modern technology
lines.
3.4.3.2. Threats
In addition to the existing and achieved strengths in the development
of the craft village, there are still many shortcomings that affect the
competitiveness of the craft village. Capital constraints and rising costs are
obstacles to the sustainable development of craft village enterprises.
3.4.4. Evaluation of innovation
3.4.4.1. Strengths
Non Nuoc traditional Stone Carving Village, with the particular

17

characteristics of handicraft products that is highly distinctive, the number
of similar products is not much, so it requires the craftsmen to be creative
in changing designs and decorative motifs.
3.4.4.2. Threats
In addition to the results achieved in innovation of enterprises in the
craft village, there are still not good criteria, but only at an average level or
less, the quality of output products of the craft village is still limited. This
is an obstacle to the development of craft village enterprises.
3.4.5. Evaluation of policy mechanisms and state management
3.4.5.1. Strengths
Assessments of the support in the general infrastructure are very good
through the construction of industrial linking clusters of craft villages to
gather businesses into concentrated production.
3.4.5.2. Threats
In addition to the positive aspects, there are also limited shortcomings
such as lack of incentives, technology support, capital, taxes, and other
services
Comprehensive and in-depth analysis of the development situation of
Non Nuoc traditional Stone Carving village in recent years, thereby
identifying the favorable and difficult conditions in developing the craft
village in the direction of industry linking cluster.
CHAPTER 4: ORIENTATION AND SOLUTIONS FOR
DEVELOPING NUOC TRADITIONAL STONE
CARVING VILLAGE IN THE DIRECTION OF
SUSTAINABLE INDUSTRY LINKING CLUSTER
4.1. Development perspective
To be suitable with the adjustment of the General Planning of the city;
development of craft villages in the direction of synchronous and modern
industrial clusters, development of craft villages in the direction of green
growth, combined with protection of natural resources and ecological
environment; development of craft villages in the direction of multi-
component development; develop in an open direction with linkages with
many stakeholders; There are appropriate mechanisms and policies to
support capital, technology, markets, brands, conservation and association
support.

18

4.2. The development orientation of Non Nuoc traditional Stone
Carving Village to 2025 with a vision to 2030
4.2.1. Economic development orientation
To develop craft villages in the direction of modernity combining
tradition, improve productivity, product quality, brand name, diversify
products, focus on developing according to the value chain of craft village
products; associated with tourism development; 100% of production
establishments that fully satisfy the conditions to be brought into the
production zone of the practice village; 100% of the production factories of
the facilities are built in accordance with the planning, synchronously and
ensure the technical safety standards in production.
4.2.2. Orientation for social development
To develop craft villages in the direction of focusing on the material
and spiritual life of workers, to adopt a treatment policy for long-time
artisans and good workers, and to encourage them to provide vocational
training and vocational transmission; Maintain and develop patriarch
festival of craft village ancestors to enhance cultural values, promote
products, promote and preserve the cultural identity of craft villages.
4.2.3. Orientation on environmental protection
Developing craft villages in association with environmental protection
through completing technical infrastructure of craft villages, setting tax
rates and environmental protection fees for individuals and organizations
producing and doing business in craft villages and having policies
reasonable to protect the village environment
4.3. SWOT matrix for industry linking cluster formation and
development Non Nuoc traditional Stone Carving village
The SWOT matrix creates a scientific argument for the orientation of
the formation and development of Non Nuoc traditional Stone Carving
village in the direction of industry linking cluster; Thereby finding out the
Strengths, Weaknesses, Opportunities, and Threats of the current craft
village, thereby building directions and solutions to promote strengths, take
advantage of opportunities, overcome weaknesses and overcome threats. as
well as the challenge to form and develop the industry linking cluster for
Non Nuoc traditional Stone Carving village in a sustainable way.
4.4. Solutions to promote the formation and development of Non Nuoc
traditional Stone Carving Village in the direction of sustainable

4.4.1. Solutions to promote the accumulation
and centralization of
19

enterprises in craft villages
In order to soon form the centralized accumulation of production of
enterprises in craft villages, it is necessary to implement the following
solutions:
- For state management agencies: soon improve the technical
infrastructure of the concentrated production zone, overcome the
inadequacies in infrastructure to attract businesses, and fine art stone
production facilities are still located in residential areas in a craft village
besides investing in a commercial area to display and introduce products.
- For craft village enterprises: it is necessary to integrate links to form
large enterprises, cooperatives and production bases for stable
development.
4.4.2. Solutions to promote the development of linkage relationships
according to the value chain of craft village products
Focusing on developing the value chain of craft village products,
linking the "links" in the chain must be very tight, linking vertically and
horizontally, developing the chain in the direction of both ensuring
production and diversifying products to serve the needs of the domestic and
foreign craft village consumption market.
4.4.3. Solutions to enhance competitive advantages for craft village
enterprises
Improving competitive advantages for craft village enterprises,
focusing on developing human resources, raw materials, having capital
solutions for production, technological solutions besides focusing on
upgrading craft village infrastructure.
4.4.4. Innovative solution
- Enterprises need to innovate to survive and develop in the 4th
industrial
revolution, exploiting and using these scientific and technological
achievements.
- Having policies to encourage craft village enterprises to innovate their
production methods, in which innovating production technology and
promoting the application of science and technology to improve the
competitiveness of products, increasing productivity and reduce
environmental pollution.
4.4.5. Solutions on mechanisms, policies and management for craft
village development

- Inheriting and promoting the experience of developing a number of craft
villages in the world and a number of craft villages in Vietnam, according
20

to which policies, the role of orientation and support of the State plays a
very important role in the development of craft villages such as policies to
support investment in craft village infrastructure, support policies on
markets, capital, technology, taxes, etc.
4.5. Other groups of solutions
4.5.1. Solution to protect the craft village environment
Environmental protection of craft villages is an urgent issue for all
levels of government and businesses
- For the government: strengthen propaganda to raise awareness for the
owners of production facilities/enterprises in craft villages to well
implement the provisions of the Law on Environmental Protection, in
addition to strengthen the management and supervision of state
management agencies;
- For enterprises: comply with regulations on environmental protection in
the process of production and business, handle production waste in
accordance with regulations, invest in replacing old, smuggled and
polluting machinery with new, modern equipment, less polluted.
4.5.2. Commercial and market solutions
On the enterprise side: proactively approach market information,
adjust production plans to suit the market, and diversify models, designs
and types of products to meet the diverse and abundant needs of
consumers, enhance e-commerce to promote as well as bring products to
the farthest, most effective with the lowest cost.
On the side of state management agency: supporting craft villages with
trade promotion policies, markets, and credit, tax incentives.
4.5.3. Land policy
Implement reasonable solutions on distribution and leasing of
production premises in craft villages; tax exemption and reduction for
establishments renting land in the first years of entering the craft village
production zone; preferential land rent for establishments that have stable
production and business in the concentrated production zones of craft
villages to encourage these establishments to expand their production and
business scale.
4.5.4. Promoting the role of the craft village association

Craft village associations play a very important role for craft villages,
it supports members in the production and business process, on behalf of
enterprises and craft village production establishments, in dialogue with
21

agencies and organizations, and protecting their interests; Craft village
associations need to innovate to improve the quality of their activities to
help craft villages develop.
4.5.5. Solutions to build a linking chain of tourism craft villages
Building a linking chain of tourism craft villages, it is necessary to
implement many synchronous solutions such as planning to develop craft
villages associated with tourism; Supporting human resource training,
invest in tourism infrastructure; Organizing tours and tourist routes to craft
villages associated with visiting historical and cultural relics; Promoting the
promotion and promotion of craft village tourism, inter-sectoral and inter-
regional cooperation in craft village tourism development.
Proposing different solutions for sustainable development of Non
Nuoc traditional Stone Carving village in the direction of industry linking
cluster.
CONCLUSION, PROPOSAL AND LIMITATIONS OF THE
DISSERTATION
1. CONCLUSION
New contributions of the thesis:
1.1. Theoretical contributions
- From theoretical research on clusters of industry linkages, based on
agglomeration, to centralize businesses into geographical areas and
territories, and to link vertically and horizontally between stages in the
product value chain. together with the inheritance of previous studies on
craft villages to build a theoretical basis for the development of traditional
craft villages in the direction of industry clusters, the thesis has clarified the
nature, basic characteristics and roles of traditional craft villages. The role
of the formation and development of industrial clusters with the effective
and sustainable development of enterprises in the value chain of traditional
craft villages.
- Develop criteria and conditions for developing traditional craft
villages in the direction of industry clusters to ensure sustainable
development of craft villages. The thesis has specified 5 basic conditions

that have a direct impact on the formation and development of clusters of
trade villages: (1) The accumulation and concentration of enterprises by
22

geographical area; (2) The linkage along the value chain of craft village
products; (3) Competitive advantage; (4) Innovation; (5) Mechanisms,
policies and management of the state.
1.2. Practical contributions
Applying the basic theoretical problems of clusters of industry linkages
in accordance with the characteristics of traditional craft villages, from
analyzing the overview features of the development of the Nuoc Stone
Carving Village, the thesis has come to an in-depth analysis of the current
situation of accumulation and centralization of production by enterprises
and production facilities in craft villages, the status of vertical and
horizontal linkages between enterprises and production facilities businesses
and related organizations in the craft village according to the value chain of
craft village products. Since then, the thesis has clearly assessed the needs,
favorable premise conditions and obstacles in the process of sustainable
development of craft villages in the direction of industry clusters.
On the basis of SWOT analysis, the thesis has clarified the scientific
argument to orient the formation and development of the cluster of
associations of Nuoc Stone Carving Village.
Propose some solutions to develop Non Nuoc traditional Stone
Carving village in the direction of industry linking cluster (including 6
solution groups).
2. PROPOSALS
2.1. For People’s Committee of Ngu Hanh Son District
Improving the management of craft villages in terms of environment
and infrastructure, fully implementing the guidelines and policies issued by
the State on craft village development; supporting to connect tourism with
craft villages.
2.2. For People’s Committee of Da Nang City
Implementing many solutions to support the development of craft
villages, giving priority to upgrading infrastructure in concentrated
production clusters of craft villages; Having appropriate tax policies for
production and business establishments/enterprises in craft villages;
encouraging banks and credit institutions to have preferential loan packages
for craft village establishments/enterprises to expand production, change
technology, purchase raw materials, and promote trade; stimulating
business initiatives, guiding and encouraging the formation of industry

23

linking clusters from their initiatives, and supporting infrastructure,
finance, technology, training and consulting through long-term programs.
3. LIMITATIONS OF DISSERTATION
- The dissertation has only researched the actual survey at Non Nuoc
traditional Stone Carving village, has not researched extensively and
deeply into many traditional craft villages in Vietnam.
- The research topic is still quite new and complicated, so the research
results are inevitably limited. Some contents have not been mentioned by
the dissertation such as preserving and promoting the cultural values of
craft villages.

24

LIST OF PUBLISHED SCIENTIFIC RESEARCHES
1. Phung Van Thanh (2019), Industry linking cluster solution to develop
Non Nuoc traditional Stone Carving Village, Journal of Economics and
Forecasting, No. 12, 4/2019
2. Phung Van Thanh (2018), Development of Non Nuoc traditional
Stone Carving Village in the direction of industry linking cluster, Journal of
Economics and Forecasting, No. 17, 6/2018 (693)
3. Phung Van Thanh (2018), Research to develop cluster of Non Nuoc
traditional Stone Carving Village, Journal of Asia - Pacific Economics, No.
518, 6/2018
4. Phung Van Thanh (2019), Application of industry linking clusters theory
to craft village development: research in Non Nuoc traditional Stone Carving
Village, Journal of Asia - Pacific Economics, No. 539, 4/2019
5. Phung Van Thanh, Nguyen Thi Bich Thuy (2016), Supply chain and
stakeholder cooperation for craft stone products of Non Nuoc traditional
Stone Carving Village, Da Nang, yearbook of the Conference on Science
and Business Administration, Da Nang, October 2016.
6. Phung Van Thanh, Pham Thi Lan Huong, Lê Thị Minh Hằng (2017),
Industrial linking cluster theory applied in Non Nuoc traditional Stone
Carving Village, yearbook of The 6th
National Conference on Science and
Business Administration, Da Nang, December 2017.
7. Phung Van Thanh (2015), grassroots level science topic “Research
and development of patriarch festival of Non Nuoc traditional Stone
Carving Village”. Department of Science and Technology - People's
Committee of Ngu Hanh Son district.

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