Concept of Economic Structure, Economic Structure Shift

each sector in the overall national economy; the quality aspect reflects the position, importance of each sector and the nature of the interaction between sectors. The interaction between sectors can be direct or indirect. Direct impacts include impacts in the same direction and in the opposite direction, while indirect relationships are expressed at levels 1, 2, 3, etc. In general, the relationship between sectors, both in quantity and quality, is constantly changing and becoming more and more complex with the development of productive forces and the division of social labor domestically and internationally.

The process of changing the industry structure from one state to another, becoming more and more perfect, suitable for the environment and development conditions is called the economic sector structure shift [37]. The sector structure shift is not only a change in the number of sectors and the proportion of each sector, but also includes changes in the position and nature of the relationship within the sector structure. The sector structure shift must be based on an existing structure and the content of the shift is to reform the old, outdated or unsuitable structure to build a new, advanced structure, perfect and supplement the old structure to turn the old structure into a new, modern and more suitable structure.

1.1.2. Criteria for assessing economic sector structural transformation

1.1.2.1. The degree of change in the relative proportion of industries in GDP

In CDCCKT assessment, the

GDP structure among economic sectors

is one of

The most important indicators because they reflect the trend of movement and the level of industrialization and modernization of the economy. Analyzing the change in the percentage of GDP of primary sectors (agriculture, industry, and services) is one of the first criteria often used to evaluate the process of structural transformation of sectors. For example, according to UNIDO (1985), the most common formula is to measure the absolute structural transformation in a period by the average of the absolute change in the structural proportion of sectors in the period.

The degree of structural shift between two points in time t0 and t1 can also be measured by the magnitude of the “angle” between the two structural vectors at those two points in time [23]. To quantify the degree of economic structural shift between two points in time t0 and t1, people often use the following formula:

Cos  =

n

 Si (t0 )Si (t1 )



i1

n

S (t ) S (t )

2

i

0 

n

2

i

1

i1

i 1

(1.1)

In which: Si(t) is the proportion of industry i at time t;

The angle  is considered as the angle between two structural vectors S (t0) and S (t1). Then Cos

The larger the  is, the closer the structures are to each other and vice versa. When Cos = 1, the angle between these two vectors is 00, which means that the two structures are identical. When Cos = 0, the angle between these two vectors is 900 and the structure vectors are orthogonal to each other. Thus: 0    900.

To intuitively assess the structural shift, the angle  can be compared with the maximum limit of deviation between the two vectors. Thus the ratio /90 reflects the rate of structural shift.

In assessing the shift in economic structure, to more realistically assess the shift towards industrialization and modernization, in addition to the structure between the three above-mentioned sectors (level I sectors), people also analyze the structure of sub-sectors (level II, level III,...).

1.1.2.2. The level of change in the labor structure

The structure of labor working in the sectors of the economy is an important indicator to assess the level of industrialization in particular and the level of economic development in general. A developing economy does not simply expand, but the structure of that economy also changes. In the process, some new industries appear and develop, and conversely, some old industries may decline and even disappear. Along with these changes, many types of

Different occupations also appear and disappear. This means that there is

shift in labor structure between industries.

Economists highly appreciate the indicator of the structure of the labor force working in the economy, because from the perspective of macroeconomic analysis, the social labor structure is the indicator that most closely reflects the level of economic and social success of the industrialization and modernization process. Because industrialization, understood in its full sense, is not simply an increase in the value proportion of industrial production, but along with the increasing contribution to GDP of the industrial sector (and now the industrial sector).

industry and services based on modern technology), must be the process of industrialization,

Modernizing human social life, in which the most important basis is the number of workers working in the non-agricultural sector, accounting for an increasingly high proportion of the total labor force working in the economy.

The labor structure shift indicator not only more accurately reflects the level of a country's transition to an industrial society, but is also less affected by external factors than the GDP structure change indicator. In some economies, while the proportion of non-agricultural labor (especially in the industrial production sector) is still small, it accounts for a much larger proportion in the GDP structure. To explain this phenomenon, economists have pointed out the "distortion" of prices. Therefore, the GDP structure between economic sectors sometimes does not accurately reflect the actual state of the economy's structural shift.

1.1.2.3. Changes in the structure of export goods

In the conditions of an open economy, the structure of export goods is also considered one of the important criteria to evaluate the success of the process of economic restructuring towards industrialization and modernization.

According to the development history of countries around the world, we can generalize the general model reflecting the change in production structure and export structure as: From mainly producing and exporting primary products to industrial products.

manufacturing industry, initially the products of manufacturing industry used

labor-intensive, low-tech products such as assembly, textile products, agricultural, forestry and fishery processing, etc. gradually shift to products using high technology such as mechanical engineering, chemicals, electronics, etc. Therefore, the shift in the structure of export goods, from primary processed goods to processed products based on high technology - engineering is also a clear manifestation of the process of economic restructuring towards industrialization and modernization.

1.1.2.4. Indicators reflecting the effectiveness of structural transformation

Economic restructuring is always the result of the management activities of the economic entity (the State) based on the awareness of the objective requirements of economic laws in a market economy. Therefore, the economic structure always has two basic characteristics: objective and directional. In other words, the State, through appropriate policies and management tools, impacts the economic restructuring process to achieve the goal.

determined, first of all to achieve efficiency

highest. About

effective side, can

Evaluate

Transforming the economic structure of the industry using many different efficiency indicators: Labor efficiency (Labor productivity); Capital efficiency (Investment efficiency - ICOR coefficient); Resource efficiency (Land productivity); economic growth rate; improving the competitiveness of the economy...

1.1.3. Factors affecting the shift in economic structure

The formation of a country's economic structure is influenced by many extremely complex objective and subjective factors. Factors can be divided into two categories: objective factors and subjective factors.

- The group of objective factors includes the following three main groups of factors:

+ The first group includes factors related to natural conditions such as resource reserves, minerals, water resources, land, energy sources, climate and terrain, etc. Marx himself wrote: "Any social production is the appropriation of natural objects by humans within a certain social form" [4]. Therefore, social production and its structure in particular are influenced by natural conditions. Nature is both a general condition of social production and a means of production and a means of consumption. The influence of natural conditions on

The formation of economic structure is direct. However, in the conditions of development

In modern economic development, the role of natural factors is increasingly not a decisive factor. The abundance of these "natural" factors does not always bring better competitiveness to the locality. Conversely, the poverty of natural resources does not always mean a disadvantage in competition. The history of world economic development has shown valuable lessons that the excess of production factors can lead to the decline of

reduce, rather than increase, competitive advantage (Dutch Disease). Meanwhile,

Certain factor disadvantages, through the influence of strategy and innovation, often contribute to long-term competitive success. This also means that advantages in resource endowments or geographic location can contribute to local prosperity in certain periods and under certain conditions, but that relying solely on these “god-given” advantages will only result in limited prosperity. Moreover, it is possible that the easy income from “windfall” resources will be a breeding ground for corruption and allow bad policies to persist. Economists call this paradox the “resource curse”. There is ample evidence that there are countries that are very rich in natural resources and resources but are very underdeveloped, while there are also many countries that have been successful in development despite not being

have significant resources. According to Porter (2008), when raw material resources

When the natural resources are abundantly supplied with cheap or surplus labor, businesses may tend to over-rely on these advantages and exploit them inefficiently. But when businesses are faced with certain disadvantages, such as high land costs, labor shortages, or shortages of local raw materials, they must innovate and upgrade to be competitive. Therefore, in the process of economic restructuring, when assessing the role of natural factors, it is necessary to avoid two opposing tendencies: either over-dependence on natural conditions or underestimating their role. Both of these tendencies are incorrect. Under the dominance of modern science and technology, natural resources are not a prerequisite for development. On the contrary, if we underestimate natural factors, we will either not fully exploit comparative advantages to promote economic development or exploit natural resources wastefully, destroying the environment for long-term economic development.

+ The second group includes the country's internal socio-economic factors such as: Market demand, population and labor resources, development level of productive forces, management level, and historical circumstances of the country.

+ Scientific and technological progress has a great influence on the transformation of economic structure. Before

It changes the position of industries in the national economy. Science and technology also changes the role of raw materials in the production process, requiring a new perspective on the use of natural resources.

+ The third group includes external factors such as foreign economic relations and

International division of labor cooperation. Due to differences in production conditions in countries, it is necessary to exchange labor results with the outside at different levels and scopes. In international exchange, each country promotes its comparative advantage on the basis of specialization in industries and fields with relatively low costs. It is specialization that promotes the development of the social division of labor and as a result changes the economic structure.

In the current conditions of world integration, internationalization and regionalization of economic life, the economic structure of a country is also affected by the economic structure of countries in the region. Generalizing that interaction, economists have pointed out an important characteristic of the wave-like change in economic structure.

- Group of subjective factors such as economic development policies of

The Party and State, socio-economic development strategies, and management mechanisms in each period greatly influence the process of economic restructuring.

1.2. Economic growth

1.2.1. Concept of economic growth

Economic growth is the first goal of all countries in the world, the main measure of progress in each stage of the country. This is of great significance for developing countries in the process of pursuing the goal of catching up and integrating with developed countries.

Economic growth is one of the core issues of economic development theory. The study of economic growth is becoming more and more systematic and complete. Correct perception of economic growth and effective use of experience in research and policy making for economic growth are very important. Scientists all agree that economic growth is first and foremost an economic issue, but it has profound political and social implications. Economic growth and development are the top goals of all countries in the world, and are the conditions and also the main measure of progress in each stage of each country.

Economic growth is the increase in income or output calculated for the entire economy in a certain period (usually a year). Economic growth can be expressed in absolute numbers (growth scale) or relative numbers (growth rate). In economic analysis, to reflect the level of expansion of the economy, people often use the concept of economic growth rate. That is the percentage between the increased output of the research period compared to the output level of the