Vietnam targets a dynamic creative startup ecosystem

Friday, 2019-07-26 15:56:30
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Youngsters working at BK - Holdings start-up space at Hanoi University of Science and Technology. (Photo: NDO/Dang Anh)
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NDO – Amidst new developments in policy, infrastructure and capital for startup ecosystems, Vietnam has targeted a dynamic creative startup ecosystem featuring various linkage and close cooperation to boost the rapid and sustainable development for startups.

In the development trend of science and technology globally, startups play an important role in promoting economic growth and improving competitiveness to ensure the sustainable development of each nation. This business-model needs to be cultivated, nurtured and developed in a favourable ecosystem, in which the Government plays a facilitative role through appropriate support policies, the venture capital funds and angel investors provide financial resources, and universities offer high quality ideas and human resources. Building and developing a dynamic startup eco-ecosystem which is able to link elements to support startup companies is a pressing requirement nowadays.

Since 2009, the Ministry of Science and Technology (MoST) has initially set up the foundation for a startup ecosystem, starting with the Vietnam - Finland Innovation Partnership Programme (IPP). The concepts of "innovation", "creative startup" and "creative startup ecosystem" were still new in Vietnam at that time. The IPP has helped Vietnam develop policies on innovation and startups, enhance the capacity on startup management for hundreds of managers in the relevant ministries, agencies and localities, and offer training on innovation and startups for key lecturers at more than 50 domestic universities, as well as connecting Vietnam's startup ecosystem to others in several countries around the world.

The IPP programme has successfully implemented a model of funding for potential startup businesses, with one of the fruits – the Vietnamese logistics application service provider Abivin – has recently won the Start-up World Cup 2019 in the US and the US$1 million worth of future investment into the firm. During the initial start-up phase, the group was supported by IPP with financial assistance and startup training. One of the success factors of Abivin is the support of the MoST in introducing them with experts and advisers, while connecting Abivin with domestic and international startup ecosystems. From the success of Abivin, it can be said that the "midwife" role of the Government is very important for the startups to be able to overcome the initial difficult period, thus help startup ideas come fruition.

In addition, the MoST has developed and implemented a range of programmes and projects to support startup enterprises, such as technological commercialisation in the form of the Silicon Valley model in Vietnam, supporting the national startup ecosystem until 2025, and supporting students to start their businesses by 2025. Minister of Science and Technology Chu Ngoc Anh said that in order to support startups, his ministry has coordinated with related ministries and agencies to develop preferential policies for startup businesses, including income tax exemption or reduction, abolishing procedures for capital contribution registration and establishing investment funds for startups.

Currently, Vietnam’s startup ecosystem has been recognised as one of the most dynamic and developed in Southeast Asia. According to reputable foreign statistics sources, Vietnam has more than 3,000 startup businesses that are growing strongly and the country is among the world’s leaders in index of startup spirit and positive attitude towards oneself potentials. There have been startups that have received large investments, ranging from a few dozen to hundreds of millions of US dollars. The number of investment funds, investors, incubators and co-working spaces has also increased sharply. Startup support centres in universities and research institutes have provided creative, innovative and active support for startup groups.

According to a report from the Topica Founder Institute startup accelerator programme, during 2015-2018, the investment deals in Vietnamese startup enterprises constantly increased in quantity and amount of investment. In 2015, the total investment amount in the deals was at US$136 million and up to US$889 million in 2018.

Despite the initially impressive results in Vietnam’s startup ecosystem development, it is necessary to continue building a network of startup connections at national and international scales to exploit the potentials. At the same time, it is also crucial to promote the creation of innovative startup centres across the country and develop plans to support startup enterprises to improve technologies and commercialise their research results. In addition, there should be networking activities to form international investment deals to develop knowledge and operational experience, while attracting investment into new ideas and technologies of Vietnamese people.