The innovation ecosystem in Vietnam has experienced strong developments in recent years thanks to special attention from Party and state leaders. The country’s investment sources for innovative startups have continued to increase.
Since beginning to support the national innovation startup ecosystem from 2016, Vietnam has improved its ranking from being the second-least dynamic startup ecosystem among the six largest countries in ASEAN last year.
According to the Global Innovation Index report released in October, Vietnam moved up two places from its innovation input ranking in 2022, and is now 57th. Vietnam’s output of innovation increased one place to 40th.
The ranking index of the StartupBlink global startup ecosystem ranking in 2023 also shows that the ecosystems of Vietnamese cities such as Hanoi and Ho Chi Minh City have improved, thus contributing to ranking Vietnam 58th in the world.
Venture capital in Vietnam grew from $634 million in 2022 to nearly $431 million in the first half of 2023. These numbers indicate that Vietnam’s innovation startup ecosystem is on a growth path and showing strong potential.
The ultimate goal is to create a favourable environment for the formation and development of innovation startups, creating outstanding value for the economy and society. Therefore, there needs to be legal corridors, policies, and strong supporting entities, specifically innovation startup support centres, as the nucleus to mobilise and tap into resources locally, centrally, from the private sector, and from abroad.
To carry out these tasks, the Minister of Science and Technology (MoST) in 2021 began to guide the formation and development of innovation startup centres in localities and ministries, industries, and organisations with the potential to develop innovation startups. It emphasises that the formation of the centre must be based on internal resources and practical needs of localities, becoming a connection point of resources for regional, national and international links.
Many innovation startup support units have been formed across the country from the private sector, public sector, and international organisations under diverse models. Nearly 20 localities have innovation startup support centres, and nearly 100 incubators and business promotion organisations. Many innovation startup centres of international organisations have opened their branches in Vietnam or coordinated with partners to open innovation spaces in the country.
As a state management agency, taking the responsibility of presiding over the implementation of innovation, sci-tech activities, the MoST recognises the need to have the legal corridor, policies, and strong support units, specifically innovation startup support centres to tap into, link, and optimise resources. Therefore, the position, legal status, state management role, and the role of the public and private sectors are important issues that need to be clarified.
In addition, resources supporting for the operation of these centres, financial policies for their operation and financial mechanisms for the provision of public services, training activities, capacity building, incubation, market development, and others should be promoted.
This also requires many breakthrough policies, especially support from the state for the early stages of innovation startups, and mechanisms to develop the market and draw in resources from international investment.
Attention to developing innovation startup centres in localities, especially in localities with newly formed ecosystems, should be promoted. In addition, cities and provinces also need to build their own ecosystem development strategy, based on exploiting local resources and strengths.
At the same time, they need to strive to create an open innovation ecosystem with the participation of local authorities, businesses, and domestic and foreign experts to solve new economic and social challenges.
The MoST has been assigned by the government to build a scheme to develop a system of organisations supporting innovation startups until 2035, and submit it to the government in January 2024. Proposals and recommendations about this issue will soon be summarised and updated.
We also expect to submit to a decree stipulating mechanisms, policies, criteria, tasks and incentives for organisations supporting innovation startups, and innovation startup centres.
With a specific, clear, transparent legal framework, and support from national programmes, schemes and projects, we hope to boost the overall strength of innovation startup support organisations nationwide.
Vietnam Investment Review