While Hanoi has many advantages when it comes to attracting a talented workforce, it takes effort and strategic planning to keep the talent coming in the long run.

Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi Takeo Nakajima shared his insights with The Hanoi Times on how the Japanese experience can be used to foster and expand Hanoi's talented population and ensure its long-term and sustainable development.

In addition to Hanoi and Ho Chi Minh, Vietnam has medium-sized cities such as Haiphong, Danang and Cantho. There are also provinces with populations of over 3 million people, such as Thanh Hoa, Nghe An, and Dong Nai. The population is dispersed throughout the country. Among them, Hanoi and Ho Chi Minh City are by far the largest.

Although there are exceptions, large cities generally have a high concentration of companies, government functions, universities and graduate schools, financial institutions, and foreign companies. They are also well-equipped with transportation infrastructure and commercial facilities, making them ideal for attracting highly educated and talented human resources, leading to population growth.

In fact, the United Nations predicts that eight of the world's top 10 metropolitan areas will experience population growth between 2023 and 2030. Two metropolitan areas, Japan's Tokyo and Osaka areas, are the exceptions. However, the population decline is the slowest among Japan's economic regions.

On the other hand, even if a city is large, its population may decline, and if the situation worsens, entire towns may be devastated. Historical examples in the United States included Chicago, Detroit, Philadelphia, Baltimore, and Oakland.

In the worst case, the decline of critical industries, an increase in vacant houses, an increase in crime, and a decline in administrative services will accelerate the population exodus. But run-down cities often come back to life over time. In short, cities can only sustain long-term prosperity through continued effort and ingenuity on the part of governments and residents. Hanoi will surely attract a talented population, but constant efforts and ingenuity are required for its maintenance and development.

Japan has some of the world's largest metropolitan areas, such as the Tokyo, Aichi (Chubu), and Osaka areas, but this has merits and demerits.

First, the positive side. Take the wider Tokyo metropolitan area (Kanto region) as an example, the population is over 37 million people, making it the largest in the world. Even if you narrow it down to Tokyo Metropolis City, it has 14 million people, ranking it among the top 10 in the world. Tokyo Metropolis has a 14% share of the nation's employed people and a 21% share of the economy. In fact, 76% of foreign companies have their headquarters registered in Tokyo. Japan's population peaked in 2008, but Tokyo's population continued to grow until 2022.

From now on, the population will enter a stage of gradual population decline, but the rate of decline will be slower than in other regions of Japan. There will be an influx of people from other prefectures and foreigners, highly educated and top talent will gather, high-quality competition will emerge, and the rise of startups will revitalize the economy.

On the other hand, there are also many negative aspects. Increased disaster risk (earthquakes, floods, fires, epidemics, among others,) due to population concentration and its serious economic, distributional, social, and sanitary consequences. The daytime population increases, and the nighttime population sharply decreases, resulting in inefficient facilities and congestion during the morning and evening commutes to work and school.

Often, metropolitan areas experience a low total fertility rate of people flocking to urban areas, a declining birthrate, and a rapidly aging population.

In addition, high population densities lead to cramped housing, loss of green space, deterioration of historical heritage, a lack of airport capacity, garbage problems, landscape degradation, and increased labor and logistics costs. There will also be a decline in rural areas and a widening gap between cities and rural areas.

The biggest paradox is that although people flock to Tokyo, the total fertility rate of the people who gather there is low, and the number of young people decreases. At the same time, as the elderly population increases in urban areas, there may be a risk of a decline in vitality.

As seen above, Hanoi is home to government agencies, large companies, foreign-affiliated companies, various organizations, universities, research institutes, and commercial facilities. It has a large economy and high salaries, and highly educated and talented people will congregate in big cities.

On the other hand, as the population grows and the number of companies increases, there is a risk that the complexity and delays of various administrative procedures will worsen. The talented people who gather tend to have forward-thinking ideas and are sensitive to urban and social issues. They strongly hope for solutions to problems such as damage, lack of exercise, lack of quality housing, high costs, and lack of green space and waterfront areas. If competitive, attractive cities emerge nearby, people may think of leaving the metropolitan area for a better living place, as is often the case in advanced nations.

Moreover, the concentration of urban human resources is not unrelated to the declining birthrate and aging of the population; in fact, Ho Chi Minh City's total fertility rate is well below the national average, and Hanoi may face the risk.

Foreign companies generally offer higher salaries, and the arrival of foreign companies is an excellent opportunity for talented people and is likely to attract even more talented people.

Foreign companies will also bring "global standards" to Hanoi and contribute to intangibles, such as sustainable business practices, innovative technologies, diverse work cultures, and sharing successes and failures. 

Japan and Japanese firms are one example, and today's various systems and structures, such as an energy-efficient society and a circular economy, are based on reflection and lessons learned from the past. Japan also suffered from environmental and energy problems in the past. Applying this experience to Vietnam will help improve the business environment, help Vietnam grow, and help foreign companies succeed.

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