Vietnam well-placed for breakthroughs in innovation and entrepreneurship

The National Youth Entrepreneurship Forum 2022

About 550 delegates attended the National Youth Entrepreneurship Forum 2022 on October 1, 2022. Focused on youth startups and economic recovery, this year's forum aims to promote entrepreneurship and develop the country, creating an environment for Vietnamese youth to participate in post-pandemic development.

Deputy Minister of Planning and Investment (MPI) Tran Duy Dong spoke about the advantages and disadvantages the country had in attracting investment, including foreign investment for innovation and startups.

He said the country was geopolitically stable and considered a safe, potential and attractive investment destination. With the attention of the government in improving the business investment environment and the consensus of businesses, the investment environment of Vietnam is becoming more and more open and transparent, creating favourable conditions for investors.

"With macro-economic stability, controlled inflation, and ensured major balances, Vietnam ranks second in the world in terms of post-pandemic recovery," he said. "Total social investment capital in the first nine months is estimated to increase by 12.5 per cent on-year, of which non-state investment is estimated to increase by 10 per cent, and realised FDI capital by 16.2 per cent, confirming the trend of investment expansion, and confidence of enterprises in maintaining macroeconomic stability."

He also pointed out several challenges in the country, such as a high incremental capital-output ratio and limited funds, while calling foreign investment into innovation.

For innovation and startups, those wanting to start their own business face several difficulties, including slowly promulgating legal provisions and creating a legal corridor for startup activities. Decree No.38/2018/ND-CP detailing investment for creative small and medium-sized enterprises still has problems and has not been updated.

A resolution on restructuring the economy in the 2021-2025 period aims to promote venture capital investment, with the MPI collaborating with the United States Agency for International Development to develop digital transformation for small- and medium-sized enterprises.

Deputy Prime Minister Vu Duc Dam speaks at the forum

Vietnam currently has about 20 innovative startup investment funds, but most are small in scale, with a total capital of about VND100 billion ($4.35 million), so they need to expand and attract more foreign capital. Research and development expenditure is still small compared to other countries, accounting for only 0.37 per cent of the country’s GDP.

The World Bank has said the Vietnamese government needs to remove problems for an innovative startup environment at the macro level. It said the first challenge was related to the vision and role of leaders at all levels.

Despite remarkable growth in the number of businesses participating in the startup ecosystem, Vietnam still lacks a consistent approach to creating a common brand for startups. The government must train civil servants to have a better attitude toward entrepreneurs, the bank said.

Startup representatives recommended ministries and sectors provide more practical support by creating a legal corridor to build more favourable conditions, especially in the first few years of starting a business.

Deputy Minister Dong said he would advise the government to amend Decree 38, creating a legal corridor for investment activities.

Deputy Minister of Labour, Invalids and Social Affairs Le Tan Dung said that there were currently nearly 100,000 foreigners working in Vietnam as managers, executives, experts, and high-tech workers, adding that the ministry was reviewing regulations and studying amendments to a decree on the management of foreign workers to facilitate the provision of visas and work permits for high-quality human resources to work in Vietnam.

Attending the forum, DPM Dam expressed his wish that the spirit of entrepreneurship should spread among the young so that Vietnam would have 1.3-1.5 million new enterprises by 2025.

He said he appreciated young people who have ideas, start businesses or innovate in green and sustainable development, such as clean agricultural products and community tourism in line with sustainable development goals.

The signing cooperation agreement between the MPI and the Ho Chi Minh Communist Youth Union

At the event, the MPI and the Central Committee of the Ho Chi Minh Communist Youth Union signed a cooperation programme for the 2022-2027 period to effectively implement the Party's direction and enhance the role of young people in promoting innovation, and socioeconomic development.