Innovative startup ecosystem breaks through with Resolution 57

Vietnamese intelligence and creativity reach out to the world

According to the leader of the Ministry of Science and Technology (MOST), over the past 10 years, Vietnam's innovative startup ecosystem has grown strongly, promoting the emergence of pioneering enterprises applying new technologies and new business models, ready to compete in the global market. Thanks to the strong development of the innovative startup ecosystem, Vietnam is emerging as one of the dynamic emerging economies and a development center for innovative startups in the Asia-Pacific region. The intelligence and creativity of Vietnamese people have been gradually asserting themselves and reaching out to the world.

According to the report, innovative startups in Vietnam have gone through three stages of development. The period 2013 - 2016 witnessed significant growth in both quantity and quality, with 1,800 enterprises, 21 incubators and 7 business promotion organizations. This was the period when many investment funds recognized great potential and expressed their desire to invest in the Vietnamese startup ecosystem.

The period from 2017 to 2020 is a time of globalization. At this time, the Government has promoted the development of the creative startup ecosystem by providing financial support, through the business promotion program, providing risk capital for newly established businesses. During this time, support programs have appeared focusing on different stages of development of startups. During this period, businesses have learned how to attract and utilize financial resources from domestic and foreign investors. In 2019, Vietnam rose to 3rd place among ASEAN countries in terms of growth rate of the creative startup ecosystem, just behind Indonesia and Singapore. The proportion of venture capital in total investment capital for creative businesses in the region has also increased from 5% (2018) to 17%.

The period from 2021 to now has been a difficult and stagnant time. However, the ecosystem has recovered and is progressing impressively. Specifically, in 2021, Vietnam recorded a record amount of venture capital with a total investment of 1.4 billion USD.

The picture of Vietnam's innovative startup ecosystem in 2024 is highlighted by about 4,000 innovative startups, including 2 unicorns and 11 businesses valued at over 100 million USD. The country has more than 1,400 startup support organizations, 202 co-working spaces, 208 investment funds, 35 business promotion organizations, 79 incubators and about 170 universities and colleges participating in innovative startup activities. More than 20 innovative startup centers have been established in localities and nationwide. In 2023, Vietnam attracted 529 million USD in venture capital for innovative startups, demonstrating its growth potential and attractiveness to international investors.

Deputy Minister of Science and Technology Hoang Minh said that in recent years, with the special attention of the Party and State leaders, the creative startup ecosystem in Vietnam has witnessed strong development. In particular, the Government's policies to promote the creative startup ecosystem through Project 844 supporting the national creative startup ecosystem, Project 1665 supporting student startups, Project 939 supporting women startups... with activities ranging from supporting technology improvement, model transformation, capacity building, capital access, investment connection, market expansion, and administrative procedure simplification, have met the increasing needs of businesses, helping them overcome challenges in the volatile international context.

In particular, since the implementation of Project 844 "Supporting the national innovative startup ecosystem since 2016" as well as the initiative to organize the National Innovation Startup Festival (TECHFEST), Vietnam has gone from being the second least dynamic startup ecosystem among the 6 largest ASEAN countries to being recognized as one of the 8 middle-income countries with the most improved rankings since 2013. Vietnam is also one of the 3 countries holding the record of having outstanding achievements compared to the level of development for 14 consecutive years, always having higher innovation results compared to the level of development - showing the effectiveness in converting input resources into innovative outputs.

Forming a strong creative startup ecosystem

Deputy Minister Hoang Minh said that in the coming period, Vietnam will focus on improving the legal system to promote the development of the creative startup ecosystem. Currently, Vietnam does not have a complete and clear legal corridor for the startup ecosystem and for creative startup organizations and individuals. Legal regulations are contained in the provisions of various legal documents, many of which are contained in the Law on Support for Small and Medium Enterprises.

Ho Chi Minh City and Hanoi are ranked among the 200 most innovative cities in the world. (Source: ST)

Deputy Minister Hoang Minh also commented that Vietnam's innovative startup ecosystem has basically passed the first stage and is entering the stage of expansion and integration with innovative startup ecosystems in the world. Accordingly, it is necessary to build legal policies and legal corridors to promote the development of Vietnam's innovative startup ecosystem in accordance with the model, potential and requirements of the new stage. In the coming stage, Vietnam's innovative startup ecosystem needs new components, which are corporations, companies and large enterprises with the role of investing and using the results of startup organizations. Therefore, appropriate policies are needed to promote the development of the ecosystem.

According to Deputy Minister Hoang Minh, the ultimate goal of developing a creative startup ecosystem is to create a favorable environment for the formation and development of creative startups; creating outstanding value for the economy and society. Therefore, the support system needs to have a legal corridor, policies, and strong supporting entities, specifically creative startup support centers as the core to mobilize, exploit, link and optimize resources in the ecosystem locally, centrally, from the private sector and even from abroad...

It can be said that the innovative startup ecosystem will develop strongly in the era of rising up with Resolution 57. In a recent article, General Secretary To Lam affirmed that it is necessary to identify private economic development as a long-term strategy and policy of the country. The private economy, together with the state economy and the collective economy, is the core group to build an autonomous, self-reliant and self-reliant economy. To promote the role of the private economic team, one of the important solutions pointed out by General Secretary To Lam is to promote the wave of startups, innovation, digital transformation and application of new technologies. This is the key factor to help the private economy break through and reach international level.

In recent times, many mechanisms and policies to encourage and support businesses to invest in research and technological innovation have been issued and have had positive impacts, helping businesses improve productivity, quality, and competitiveness of products and services. For the private economy to truly make a breakthrough, General Secretary To Lam directed that there should be strong and effective support policies to promote private businesses to apply technology, innovate products, and increase added value. The State needs to create a legal framework for testing new technology fields, encouraging private businesses to invest in pioneering fields such as artificial intelligence, encrypted and connected data blocks into a chain (blockchain), big data, e-commerce, financial technology (fintech) and smart healthcare... Implement financial support policies and tax incentives for businesses investing in research and development (R&D). Forming a strong startup ecosystem, creating conditions for startups and "technology unicorns" named Vietnam to reach international level...

In 2024, attracting venture capital in Vietnam has grown strongly again, with the number of venture capital deals increasing by 27 places, ranking 50/133 countries. The number of deals receiving venture capital increased by 10 places, to 44/133 countries, reflecting the improved investment environment and quality of startups. The ranking index of the Startup Blink global startup ecosystem ranking in 2024 also shows that the creative startup ecosystem in Vietnamese cities, specifically Hanoi, Ho Chi Minh City and Da Nang, has improved and continued to grow, ranking Vietnam 56th in the world, up 2 places compared to 2023, surpassing Armenia. The above figures show that Vietnam's creative startup ecosystem is on the rise and shows strong breakthrough potential in this transformation period.

Moonlight