Factors Affecting Innovation of Small and Medium Enterprises in Thanh Hoa Province, Vietnam

In a rapidly changing, flexible and highly competitive business environment, innovation is considered an important differentiation strategy to gain business advantage. Looking back at history, most long-standing, developed businesses possess highly creative and innovative human resources such as Microsoft, Apple, and Intel. Vietnamese businesses are currently keeping pace with the increasing momentum in the world's Innovation Index (in the GII 2022 rankings, Vietnam ranks 48th out of 132 countries/economies and considers innovation as the national priority). Innovation in businesses needs to be managed in the right direction to create a creative culture, not miss development opportunities and improve competitiveness. This article uses business statistics in Thanh Hoa province, Vietnam to find innovative directions to improve the management efficiency of small and medium-sized enterprises in the province. Research results show that more than 90% of enterprises in the province are small and medium-sized enterprises, each enterprise has an average of 30-40 employees, so the administrative costs of enterprises are quite high, leading to low production efficiency. Besides, many businesses are still passive with new trends and not ready to change their production and business models. However, some businesses have applied software in management and innovation of production and business processes, thereby increasing production efficiency, improving competitiveness and income for workers.