Global Entrepreneurship Week (GEW) Vietnam is led by Nguyễn Thị Hạnh. We caught up with Thị Hạnh on Vietnam's robust startup ecosystem and how the GEN community alongside the Vietnam Chamber of Commerce and Industry (VCCI) have exchanged models and concepts on entrepreneurship development to further startup support and growth. She also explained the six support packages that have been implemented in Vietnam to overcome the COVID-19 pandemic.
This article is part of a series highlighting successful GEW hosts from around the world.
ABOUT YOUR COUNTRY’S STARTUP ECOSYSTEM
GEN: Tell us about the startup ecosystem in your country. What are its main characteristics? If you could change one thing to make it better, what would it be? Who are the stars of your country’s ecosystem?
Nguyễn Thị Hạnh: The startup ecosystem consists of the participation of many different actors and institutions implementing one of three functional groups:
- Startup functions (such as startups themselves)
- Supporting functions (such as government, universities, research institutes, incubation organizations, advisory experts); and
- Investment functions (through venture capital funds, angel investors, business promotion organizations).
The interaction between actors in the startup ecosystem is extremely important to the development of startups.
Among these institutions, the government has a great influence on the development of the startup ecosystem at the macro level. Over the past few years, the government in Vietnam has made certain efforts in promoting actors in the development of the startup ecosystem. The government has introduced the law on supporting SME, which provides specific support for startup organizations and institutions. The government has also developed a project which supports the national innovation startup ecosystem until 2025, which is considered an important milestone in the policy of creating a favorable business environment to accelerate the process of establishing and developing innovative startups in Vietnam. To encourage entrepreneurship, the Vietnamese government has established a number of funds at state and provincial/city level to support startups. In addition, they have also collaborated with countries and bank to develop funding and innovation programs, to provide loans, technical training and business mentoring.
In addition to the educational program at universities that teach about entrepreneurship, there are also many organizations that carry out startup training activities.
The ecosystem in Vietnam is mostly thriving due to the substantial market size of the Vietnamese economy, making the creation of successful local startups profitable.
In terms of quantity, the number of startups, co-working spaces and startup accelerator events in a country are counted; the quality score measures the impact of an ecosystem’s startups based on several factors, including customer base, authority, website visits and valuations. The business environment assesses how easy it is to do business in a given location, based on technological infrastructure, bureaucracy and red tape. However, to become a true regional and global hub, Vietnam will have to generate innovations with global impact, the report added.
Among the problems that hinder starting a business, perhaps the capital to cover investment is often considered the biggest barrier. Although the sources of funding for startup activities are quite diverse, startups are not always able to demonstrate the necessary conditions to access this investment capital. Vietnamese governments has planned to have at least 10 unicorns by 2030. Total investment in Vietnamese tech startups last year reached $741 million – second in Southeast Asia after Singapore, according to Singapore-based venture capital firm, Cento Ventures.
It can be seen that the startup ecosystem in Vietnam is developing rapidly in recent years. Within just two years, Vietnam has developed from a sedentary startup ecosystem, to rank as the third largest ASEAN, just behind Indonesia and Singapore. The amount of investment capital and the number of technology transactions performed has increased by six times between the first half of 2017 and the first half of 2019.
ABOUT YOUR ORGANIZATION
GEN: Tell us about your organization. What does it do to support entrepreneurs and/or grow your startup ecosystem?
Nguyễn Thị Hạnh: Founded in 1963, the Vietnam Chamber of Commerce and Industry (VCCI) is the national organization that assembles and represents the business community, employers and business associations in Vietnam. It is devoted to accelerating socio-economic development of the country and promoting commercial, economic, scientific and technological cooperation between Vietnam and other economies in the world.
VCCI actively participates in the process of institutional building, administrative reform and creating an equal and enabling business environment for businesses through participating in the development of laws and decrees related to enterprise development such as the law on enterprises, investment law, security law, land law, SME supporting law and decrees under the law – including decree 38/2018, detailing the investment for startup innovation. These contributions all work to improve the startup ecosystem in Vietnam.
In addition, in order to support the law-making and policy suggestions, VCCI has organized hundreds of conferences and seminars for commenting and disseminating policies with the participation of hundreds of thousands of businesses.
VCCI has always been a pioneer in conducting research, developing training materials and conducting startup trainings; such as carrying out activities that support startups like the business incubator club as well as establishing GEN Vietnam to connect us with GEN Global.
Since 2003, VCCI has organized the startup festival and launched the startup program to continue developing the startup network and support startup acceleration annually.
In 2013, the VCCI represented Vietnam to participate in Global Entrepreneurship Monitor (GERM) research and directly carry out GERM research activities. Through GERM, VCCI has conducted a survey and developed a report on the Vietnam Entrepreneur Index - GERM Vietnam in 2013, 2014, 2015 and 2017.
Since 2013, the VCCI has also hosted Global Entrepreneurship Week (GEW) in Vietnam and has actively participated in GEN activities such as attending the Global Entrepreneurship Summit in Brazil, Russia, South Africa, Turkey, etc., joining the Executive Board of GEN Asia and establishing and coordinating GEN Vietnam. GEN Vietnam was established in March 2017 with more than 70 organizations that are policy-making units.
The launch of GEN Vietnam was held at VCCI on March 1, 2017. As a coordinator, VCCI regularly provides operational information and new startup support models to members of the network. VCCI also actively cooperates with and supports members of the network to organize activities for the startup community such as introducing international investors to startups, inviting leaders of the GEN community to attend startup conferences / forums and to attend TECHFEST 2018.
In September 2017, the VCCI organized the APEC 2017 startups forum. This forum has received the attention and attendance of more than 350 delegates from 18/21 APEC’s member economies. At the forum, the delegates discussed the contents, initiatives and agreed upon the recommendations in a joint statement on promoting startup and MSMEs to propose to the SME ministerial meeting that was held later. Buke Cuhadar was one of key speakers of the APEC 2017 startups forum.
VCCI also served as the national organizer of EWC Vietnam in 2019 and 2020.
ABOUT GLOBAL ENTREPRENEURSHIP WEEK
GEN: When did you decide to get involved in Global Entrepreneurship Week and why?
Nguyễn Thị Hạnh: We decided to get involved with GEW to promote entrepreneurship to Vietnamese people. In 2013, the VCCI responded and became the 131st partner to host GEW in Vietnam.
GEN: How does GEW support the other work that your organization does?
Nguyễn Thị Hạnh: VCCI provides BDS to business communities including startups, youths, etc. Therefore, GEW is a great channel for VCCI to exchange models as well as concepts on entrepreneurship development. The program also acts as a network of consultants and trainers.
GEN: What do you hope to achieve with GEW 2020?
Nguyễn Thị Hạnh: We hope to increase the number of people involved in GEW 2020, expand the network supporting entrepreneurship in Vietnam as well as raise awareness on the importance of creating better business environments.
YOUR RESPONSE TO COVID
GEN: How has the COVID19 pandemic impacted your country’s startup ecosystem? What measures are being taken to protect small business owners, if any? — And how do you think GEW will play a role in uniting entrepreneurs during this difficult time?
Nguyễn Thị Hạnh: The COVID-19 pandemic actually had very serious effects on business and production activities of enterprises. According to a report made by VCCI during March 2020, the strongest impact was to narrow the market. Up to 83.30% of enterprises said that the disease had narrowed the market, in which the most affected ones were private enterprises (85.17%), followed by FDI enterprises with 82.50% and SOEs with 69.39%. The market affects capital and cash. 52.47% of enterprises surveyed thought that the disease caused them to lack capital / business cash flow, in which the most affected was the private enterprise (58.61%). The pandemic caused a shortage of input materials for 45.14% of enterprises. Difficult production reduces labor demand and narrows the labor force of nearly 43.95% of businesses surveyed, especially for private enterprises (48.56%).
Only 3.75% of businesses said that their estimated revenue in 2020 increased compared to 2019, and 4.43% of businesses thought that revenue was equivalent to 2019.
To support the Vietnamese business community to overcome the difficulties caused by the pandemic, the Vietnamese government has launched a range of measures to support businesses, especially the SMEs. These measures include tax and loan interest reduction and exemption, rescheduling the repayment term, reducing lending rental, and providing loans with with 0% interest rates for labor employers.
Vietnam has also launched six communication support packages for Vietnamese startups in the context of the COVID-19 pandemic:
- Package 1: Market development communications for innovative startups.
- Package 2: Communication to support startups to test the market and attract domestic and international investment.
- Package 3: Communication to promote innovation startups.
- Package 4: Communication to promote products and business models of creative innovation startup businesses in the Central region – Central Highlands to test and develop the market.
- Package 5: VietChance 2020 startup support package.
- Package 6: Cloud Ace – Vietnam’s Booster Cloud support package.