The nation’s entrepreneurial spirit and its promotion

October 27, 2023 | 17:00
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Vietnam is in the top three most dynamic innovative startup ecosystems in Southeast Asia and one of the most attractive destinations for foreign investors who want to find opportunities in startup projects.

Possessing a favourable geographical location for international trade and a large population, Vietnam is becoming a destination for international corporations and foreigners looking for startup and settlement opportunities.

The nation’s entrepreneurial spirit and its promotion
Dr. Dinh Viet Hoa, Chairman, Vietnam National Entrepreneurship Association

Over the past 10 years, the number of Korean businesses established in Vietnam has risen to about 10,000. In addition to policies to collect foreign investment from the government, the development of domestic trade and various advantages has made Vietnam become the destination of dreams in the past 10 years, especially for businesses in technology and finance.

When the government chose 2016 as Year of the Startup, the number of established businesses reached a record number. Before 2016, Vietnam had about 50,000 businesses established each year, but this number increased to 110,000 enterprises that year. In the following years, the number of newly established businesses has always reached an impressive number.

In 2020-2021, there was an inevitable decrease in the number of newly established businesses, but the entrepreneurial spirit of Vietnamese people was still strong. In 2020, the startup ecosystem slowed down with a total investment of only $421 million. However, by 2021, funding in this field grew strongly again, with a record of venture capital up to $1.4 billion.

Vietnam’s startup ecosystem has jumped from fifth place to third place among the top economies in ASEAN, just behind Indonesia and Singapore, according to an annual report from DO Ventures and Cento Ventures. The growth is reflected in both the rate of capital poured into the market and the number of active investors and startup funds.

The past six years have been a big revolution for Vietnamese businesses, with many laws and projects introduced. These include the Law on Support for Small- and Medium-sized Enterprises in 2018, the Law on Enterprises in 2020, the schemes on supporting the innovative startup ecosystem in Vietnam towards 2025, a project to support students to start a business, and the Women’s Startup Programme. There have also been many decrees and circulars to support startups and innovation.

Vietnam is continuing to create the best legal corridors for businesses to continue promoting their entrepreneurial spirit, while attracting more foreign investors.

However, we also objectively view Vietnam as a country with a short history of business development. Most Vietnamese enterprises were established in 1986. At that time, it had nearly 70 million people but only 1,000 private enterprises. Since then, the number of businesses has risen to more than 800,000, equivalent to a ratio of 120-140 people per company. However, the current rate of startup businesses is still not commensurate with the potential, while developed countries in the world have a rate of about 45-60 people per business.

The nation still lacks the milestone 1 million businesses to reach the status of developed countries, but this is a good opportunity for more Vietnamese people to participate.

Vietnam possesses potential in startup fields such as e-commerce, fintech, medtech, edtech, online media, and digital solutions, all forecast to create breakthroughs in attracting investment. In addition to the factors of capital and financial solutions for businesses, it is key to solve output for businesses and develop internal strength to promote business development.

The past few years have made us realise that Vietnamese businesses are still weak in production. It that time, it was appropriate for businesses to restructure, increase learning exchanges, access modern business management thinking abroad, and search for standard technology tools to apply to businesses to create new quality products.

With that, the association has a policy of accompanying businesses focusing on six core elements. The first factor is to promote the entrepreneurial spirit, creating many ideas so that many young people and students create new businesses and establish new business models.

The second factor is to promote the training process and share policies and knowledge that are related to business management, finances, or human resource management.

The third factor is building a network of domestic and global consultants to support businesses. Closing new ones after investing is normal for any business in the world, but if we have a force of consultants with the right vision, we will minimise risks and losses for businesses.

To help entrepreneurs have ideas to create suitable products to bring to the market, the fourth factor is to connect business owners with capital from credit institutions such as banks and funds.

The fifth factor is the market. Vietnam is a populous country which has a geographical location close to the world’s most populous country, China, but we still lose market share to foreign business owners. During the process of digital integration, Vietnam’s online shopping market share mainly belongs to foreign businesses such as Shopee and Lazada.

The final factor is focusing on supporting dialogue, especially policy dialogue, so that businesses can follow the correct policies and laws, thereby supporting the startup process.

NIC determined to remain at forefront of technology NIC determined to remain at forefront of technology

The semiconductor value chain is moving to Southeast Asia, and Vietnam has an advantage in the region, so fully welcomes all new opportunities. But unless semiconductor technology is fully mastered, the country will remain on the sidelines of core technology.

NIC providing innovation launchpad NIC providing innovation launchpad

The National Innovation Centre and its Vietnam Innovation Network are building a solid foundation for technology and innovation companies to develop more rapidly and go further.

By Dr. Dinh Viet Hoa

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