Measuring the Speed and Quality of Industry Growth.

Currently, in the world, in-depth growth is very popular in developed countries, in these countries, the resources for extensive growth have been mobilized almost completely, so if growth is to be forced to grow in-depth, there is no other way. For developing countries, extensive growth is still the mainstay.

In the context of the rise of the world economy, people will move from the industrial economy to the knowledge economy. The knowledge economy has outstanding advantages over the traditional economy. The measure of this superiority is efficiency.

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Concept 3 : The quality of economic growth is reflected by competitiveness.

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World economies compete with each other for export markets.

Foreign investment, they compete in education, manufacturing, services, defense, comprehensive success is the foundation for development and prosperity of each country.

Economic growth must go hand in hand with improving the competitiveness of goods, businesses, and nations, only then will it be high-quality growth.

Concept 4 : The quality of economic growth contributes to effectively solving social problems. Economic growth is the source of increasing social wealth, and that increase is only meaningful when it is distributed fairly and effectively, actively participating in solving social problems such as increasing people's income, reducing unemployment, protecting the environment, eliminating hunger and reducing poverty...

Concept 5 : Quality economic growth is sustainable development.

According to UNEP: Sustainable development is a healthy development, in which the development of one individual does not harm the interests of another individual, the development of one individual does not harm the interests of the community, the development of one community does not harm the interests of another community, the development of today's generation does not infringe upon the interests of future generations and the development of humanity does not threaten the survival or degrade the habitat of other species on the planet.

According to the statistical results of the WB, the level of environmental pollution increases gradually with the economic growth rate until the average income per capita reaches 12,000 USD/person/year. If the average income per capita continues to increase, the environmental quality in the next stage will be significantly improved.

Concept 6 : The more factors determine an economic problem, the higher the quality of economic growth and vice versa.

Some economists have proposed more comprehensive concepts of the quality of economic growth:

According to Thoms, Dailami and Dhareshwar: the quality of economic growth is reflected in two aspects: high growth rate needs to be maintained in the long term and growth needs to contribute directly to sustainable improvement and poverty reduction.

According to the views of some famous economists recently such as Lucas, Sen, Stiglitz, along with the growth process, the quality of growth is expressed in the following main criteria: (1) high total factor productivity (TFP), ensuring the maintenance of long-term growth rate and avoiding external fluctuations; (2) growth must ensure the improvement of economic efficiency and the enhancement of the competitiveness of the economy; (3) growth goes hand in hand with sustainable environmental development; (4) growth supports the ever-innovating democratic institutions, which in turn promotes growth at a higher rate; (5) growth must achieve the goal of improving social welfare and reducing poverty.

According to Le Xuan Ba (Central Institute for Economic Management - CIEM), the quality of economic growth is consistently and continuously demonstrated throughout the process of social reproduction. The quality of economic growth is reflected in both input factors such as the management and allocation of resources in the reproduction process, and the output results of the production process with improved quality of life, ensuring fairness in the distribution of output products and contributing to the protection of the ecological environment. The quality of economic growth demonstrates the sustainability of

growth and long-term growth targets, although high short-term growth rates are essential conditions.

According to Le Huy Duc (Lecturer of the Faculty of Planning and Development - National Economics University): economic growth quality is an economic concept used to indicate the stability of the inherent internal state of the economic growth process, which is the synthesis of basic attributes or characteristics that form the nature of economic growth in a certain situation and period.

From the above perspectives and concepts, the author summarizes growth quality as follows:

The quality of economic growth is sustainable growth based on increased total factor productivity, economic structure shifting towards progress, growth coupled with effective resolution of social issues such as hunger eradication and poverty reduction, social equity, and environmental pollution.

1.2. MEASURING THE RATE AND QUALITY OF INDUSTRY GROWTH.

1.2.1. Measure of industry growth rate.

1.2.1.1. Total industry production value (GO) :

Total industry production value is the total value of material products and services created by the industry within the territory of a country in a certain period. This is the sales revenue obtained from units and industries in the entire national economy or the production value that can be calculated directly from production and services including intermediate costs and added value from products and services.

PRODUCTION VALUE = SALES REVENUE + VALUE OF OTHER GOODS USED + VALUE OF CHANGES IN INVENTORY.

Or :

PRODUCTION VALUE = VALUE ADDED + INTERMEDIATE COSTS.

1.2.1.2. Value added (VA) :

Value added is an important measure of industry. Value added reflects the new value created by the collective contribution of everyone in the industry. Value added differs from output value in that it does not include the value of wealth created by industries that provide inputs to the industry, so value added measures the actual value created by the industry. The value added created is distributed to those who have contributed to its creation in the form of wages and labor allowances, interest on loans, taxes, interest, and profits.

Value added is the difference between total output and purchased materials and services, the value added created in production, and minus depreciation or consumption of fixed capital.

Value added is calculated by two methods:

Subtraction method:

Value added = Production value – Intermediate costs.

Cumulative method:

Value added = Profit + Interest + Tax + Labor cost + Depreciation + Land rent.

1.2.2. Measure of economic growth quality.

The production value (GO) and value added (VA) indicators are good indicators but not enough to assess the industry comprehensively. To measure the quality of growth, it is necessary to consider many indicators that are not included in the system of national accounts (SNA), to assess many aspects of the industry. However, to assess the quality of growth, it is also necessary to limit the criteria within a range.

1.2.2.1. Industrial structure transformation :

The structure of an industry reflects the internal structure of the industry. The structure of an industry is expressed through the proportions of the elements that make up the structure and through the tight or loose relationships between the constituent elements. The economic structure of an industry determines

determine the harmonious and rhythmic development of all elements that make up the structure and ultimately bring about overall growth for the industry.

The economic structure of the industry is considered from the following perspectives:

Industry : Industrial structure transformation is the process of transforming a narrow industry structure from one state to another in a modern, advanced direction and suitable to the country's conditions, specifically increasing the proportion of the processing industry group, the production and distribution of electricity, gas and water, the construction industry, and reducing the proportion of the mining industry group.

Territory : The economic structure of the industrial sector is viewed from the arrangement of production forces among regions within the national territory. The process of regional structural transformation needs to ensure balanced and harmonious development among regions to ensure sustainability in the development process. However, it is also necessary to consider the central role of key development regions, which will be the place to attract and promote other regions to develop accordingly.

Ownership : Diversify ownership types to attract investment resources for development. Create conditions for ownership types that are decisive and central to economic development.

1.2.2.2. Industry labor productivity:

Industry labor productivity is calculated by the value of production per number of employees in the industry. This indicator can be used to compare economic efficiency between economic sectors or with other countries. This is also an important indicator to help structure the economic sector appropriately. For heavy industry, this indicator is often lower because the structure of the elements that make up the product value will affect the added value that can be created.

1.2.2.3. Total Factor Productivity (TFP_ Total FactorProductivity):

Total factor productivity is essentially the increase in total productivity beyond the increase due to capital intensity (the amount of capital equipped for 1 worker) and

The increase in labor productivity is due to the increase in input factors. Labor productivity increases due to the impact of intangible factors that are difficult to quantify. TFP can be understood as the result of the process of "qualifying" input factors to create products and services. To recognize TFP, it is necessary to consider the relationship between output results and input factors of product creation processes. The difference in output results achieved when the amount of input is the same is due to the impact of intangible factors, the intangible impacts are often expressed through TFP. In reality, TFP can only be recognized, calculated, and evaluated through the calculation and evaluation of qualitative changes in tangible factors, mainly fixed capital and labor.

TFP is the basis for creating and demonstrating the sustainable development of countries in economic development, which is economic development in depth, high labor productivity but reasonable use of resources, not destroying the environment. TFP will gradually increase along with the process of improving production and management levels. In fact, according to statistics, thanks to high production levels and high management efficiency, TFP in developed countries reaches a very high level (60 - 70% of the total general productivity increase). On the contrary, in developing countries, due to low production levels and poor management efficiency, TFP in these countries has not yet gained an advantage, accounting for only 20% of total productivity growth.

– 30% of total productivity.

Factors that may affect TFP growth include:

Economic structure (economic transformation from low value-added sectors or products to high value-added sectors).

Improve labor quality, especially skills, knowledge, experience and working style.

Improve the quality of capital, especially the features, functions and technology of the equipment.

Improve organization and management methods, especially promote the advantages of process-based management and information technology applications.

Method to calculate TFP from Cobb Douglas production function We have production function:

In which: Y: Output.

A L 

K 

K: Production capital.

L: Number of workers. A: is TFP.

 ,  : exponential coefficients reflecting the marginal rates of input factors.

LnY

LnA LnL LnK

LnA LnY LnL LnK

Paying attention to the growth rate of TFP clearly shows the increase in socio-economic efficiency due to the impact of intangible factors to improve the quality of tangible factors such as improving the quality of labor, innovating technology, improving the basic technological features of equipment, innovating management mechanisms and methods to ensure process control and product quality control. The growth rate of TFP is of great significance in analyzing and determining the general growth trend, and it is also characteristic of the trend of in-depth development, valuing brainpower and technology. Therefore, valuing the role of TFP and accelerating TFP has become a strategic viewpoint in sustainable socio-economic development of many countries.

1.2.2.4. Industry competitiveness :

The competitiveness of industry needs to be considered from three perspectives: industrial products, industrial enterprises, and countries.

+ Competitiveness of industrial production enterprises in

water:

Return on capital employed or on revenue

Often used to measure the competitiveness of industrial manufacturing enterprises.

Profit after tax

Return on capital employed = x 100%

Production capital

Profit after tax

Profit margin on sales = x 100%

Production value

The higher the profit margin, the more efficient production is. When the economic growth rate is high and the profit margin has the same trend, the growth quality is good and vice versa.

+ Competitiveness of domestic industrial goods:

Domestic industrial goods are divided into two types: goods produced for export and goods produced to replace import goods:

Competitiveness of export goods:

Export value at actual prices

Export rate = x 100%

Production value at actual prices

The higher the export ratio, the better the quality of the country's industrial products, which are favored by other countries, so they export well and thus have good competitiveness and vice versa. Thus, a quality economic growth in terms of competitiveness must ensure that the products produced have good export potential, and must ensure that the export value ratio in the production value increases or at least remains the same. If the export ratio decreases, it means that the competitiveness is decreasing day by day.

Besides, the competitiveness of export goods is also reflected in the export rate of products manufactured from domestic materials:

Export rate of products manufactured from domestic materials

Export value of products manufactured from

domestic materials

=x Total export value

100%

If the number of exported products from domestic raw materials is more, the proportion of exported products from domestic raw materials is higher, which means that with the same total export value, we can earn more foreign currency for the country, and create more jobs for the people. This ratio

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