- Startup ecosystem in Vietnam
According to the National Agency for Science and Technology Information, a startup ecosystem is defined as: “a set of interconnected entrepreneurial actors (both potential and existing), entrepreneurial organisations (e.g. firms, venture capitalists, angel investors, banks), institutions (universities, public sector agencies, financial bodies) and entrepreneurial processes (e.g. the business birth rate, numbers of high growth firms, levels of “blockbuster entrepreneurship”, number of serial entrepreneurs, degree of sellout mentality within firms and levels of entrepreneurial ambition) which formally and informally coalesce to connect, mediate and govern the performance within the local entrepreneurial environment”
Development stages of the startup ecosystem in Vietnam
The 2000-2007 period witnessed the emergence of the first creative startups in Vietnam, such as VNG, Vatgia, Socbay, and VC Corp… However, in the initial period, Vietnam’s creative startups have not attracted much attention. In 2004, IDG Ventures Vietnam (IDGVV), the first venture capital fund in Vietnam, was established to invest in high-quality enterprises which were at the beginning of their growth, focusing on e-commerce infrastructure, communication, information technology, technology businesses, and entertainment. IDGVV had invested about USD 100 billion from 2004 to 2006
From 2008 to 2014, the appearance of CyberAgent Venture (CAV) in late 2008 blew a new wind to the creative startup sector in Vietnam. CAV focused on enterprises operating in the internet sector, occupying high market shares and managed by talented businessmen. The main fields of startup enterprises included e-commerce, internet services, and finance. During this period, many startup enterprises had received investments and succeeded, such as Nhaccuatui, Tiki.vn.
Regarding financial policies, to support and promote startup enterprises, the Government had issued a number of financial policies, including direct supporting policies, such as tax and credit policies, and indirect supporting policies through the incubator model
Relating to the point of the “Market access”, notably, the rate of startup entrepreneurs in the wholesale/retail sector in Vietnam accounted for 71.2%, while the service sector rate was only 9.6%, compared to the average rate at 15% of other factor-driven economies. Therefore, Vietnam should encourage startup entrepreneurs in services, especially services for business development, information/communication technology, and financial services to shift to a higher stage of development. While foreign projects mainly outsourced the early technology enterprises in Vietnam or focused on the domestic market, entrepreneurs currently start to provide products towards the international market, even at the early stage of establishment.
Based on an assessment of the World Bank, the quality of Vietnam’s human resources was marked 3.79 points out of 10, ranked the 11th in the 12 surveyed countries in Asia, whereas South Korea, India and Malaysia achieved 6.91, 5.76, and 5.59 points respectively. It can be seen from the assessment that Vietnam’s human resources are weak regarding quality, lack of dynamism, creativity, innovation, and industrial working style.
More importantly, the sponsorship and funding status of Vietnamese entrepreneurial ecosystem seemed to be vibrant, but most of the Vietnamese startup entrepreneurs received investments from overseas, rather than domestic sources.
- Limitations and solutions
According to the Article “Startup ecosystem in Vietnam” edited by Amchamvietnam in 2019, some drawbacks have been noted, which are: investment, culture, intellectual property and regulation, payment solutions, time and experience, problem solving, design thinking and product development. Vietnamese govement as well as startups could take some steps to migitgate the limitiations, such as: calling angel funds, mentorship, desiging an appropiate models and methodology, launching branch offices.
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