Deputy PM: Startup ecosystem should not only be “potential” but a full startup nation

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The event was held in Hanoi, and hosted by the Science and Technology Ministry. Speaking at the conference, was Minister Chu Ngoc Anh who told the audience that “Entrepreneurship ecosystem in Vietnam is still young with great potential for development.”

The two-day festival is reported to have been attended by some 2,000 people, among which were around 200 startups and investors, hailing from both the local scene and abroad.

Deputy PM Vu Duc Dam (right) and Minister of Science and Technology, Chu Ngoc Anh visited a startup stall at the Techfest 2016 in Hanoi on November 12.

This year’s theme for the event was the development of investment, resources, and connections between entrepreneurs, the government, and of course, investors. To this end, the event saw the launch of the first ever national startup ecosystem executive board, with members from the government, ministries, local and international investors.

The festival is a chance for local startups to showcase their innovation products and services. It is also a platform to connect start-ups with investors and policy makers.

The startup ecosystem has become a significant focus for the government, which sees the growth of a stronger entrepreneurship community as a key driver in reaching their target of reaching 1 million businesses in the country by 2020.

By most estimates, the current number stands at about 500,000. As the country begins to lose some of its international funding, perhaps the one downside of becoming wealthier, they will need to generate new jobs and opportunities for the population.

Deputy Prime Minister Vu Duc Dam told the crowd that he hopes to capitalize on the strong entrepreneurship spirit in Vietnam to help it become a “startup nation” in its own right.

He recognized that startups face many hurdles in achieving these goals, not the least of which have been put in place by government policies and structures. Beyond the gap in entrepreneurship knowledge, challenges include aspects like complicated procedures in navigating bureaucracy and unclear regulations on venture capital.

In speaking about the challenges, Vice PM Dam called on authorities to help improve the business climate and give support for the community, allowing them to move past being a “potential” up and comer, and reach the status of a real “startup nation.”

In addition to the need for easier access to capital, he said that policymakers must also create a transparent and fair business environment, which can only be developed through administrative reform to cut cumbersome paperwork for businesses.

Vietnam is considered to be one of the most regulated countries in term of internet access after China, which poses a problem for the mostly internet-based startup ecosystem.

In June, many startups in the country when Article 292 of the Penal Code was adopted by the National Assembly, deeming any services offered online or via telecommunication networks without prior permission as illegal. Receiving this permission is complicated and expensive, placing potentially prohibitive roadblocks on the path of entrepreneurs.

For the time being, it would appear that most of the startups are simply getting down to work and avoiding the long process of getting authorization. So while the law may be on the books, locals are not waiting for the government to play catch up.

Adding to these official troubles, there are cultural considerations as well. Despite what has been described as an entrepreneurial spirit, the older generation has not always welcomed new entrepreneurs, especially those follow new technology.

This situation has made it difficult for young people to have drive and just as important, the financial support from their relatives and investors.

Thankfully there have been some success stories so far this year, with startups like e-wallet Momo picking up a $28 million investment, social shopping app GOTit with $9 million investment, and a travel app Vntrip which received a $3 million Series A led by former Alibaba CTO John Wu’s FengHe Fund Management.