Billions of dollars set to pour into Vietnam innovative startups

Vietnam’s National Innovation Center (NIC) would provide support for startups that have already received funding from venture capital funds, a move that is expected to pump billions of dollars into innovative startups, according to Minister of Planning and Investment Nguyen Chi Dung.

Minister of Planning and Investment Nguyen Chi Dung. Source: MPI.

Specifically, these startups would be entitled to preferential treatment under Decree No.94/NQ-CP, which stipulates preferential mechanism and policies for the NIC, stated Mr. Dung at the Vietnam Venture Summit 2020 themed “Going Digital” and held on November 25.

The event attracted leaders from major corporations from Vietnam and abroad, including VNG, Grab Vietnam, Momo, GoJek, Tiki, Sendo, Golden Gate Ventures, Softbank, Sequoia, ADB Venture, and the startup community.

Additionally, the Ministry of Planning and Investment (MPI) is preparing the necessary manpower to take part in innovation process. To date, Vietnam’s innovation network has been expanded to Germany, Japan, Australia, and the next step is to set up innovation centers in the US and Canada.

Such a large network would help gather thousands of outstanding Vietnamese talents to join the process of research and development of new technologies and applications in Vietnam, Mr. Dung stressed.

Looking back on 2019, Mr. Dung said the country witnessed a strong rise of local tech startups with fund raising of a combined US$800 million. However, the Covid-19 pandemic has completely changed the startup landscape in 2020.

Additionally, the pandemic also expose shortcomings of innovative startups, including major ones. As such, Mr. Dung said startups seem to be more vulnerable to economic volatility.

It is worth mentioning that while some business models are struggling to overcome the current crisis, some have seen strong growth, such as those of online meeting, shopping, remote learning, among others.

The minister stressed quick adaptability and flexibility to survive in different conditions are key for startups to continue growing at the moment.

New phase of development for Vietnam innovative ecosystem

Meanwhile, Vietnam’s macro-economic environment continues to remain stable, mainly thanks to the government’s effective measures against the Covid-19 pandemic. This also a key factor that led to the International Monetary Fund (IMF)’s prediction that the country would be among the fastest growing economies in this year.

Next year, Vietnam would continue to pursue the dual target of both containing the pandemic and boosting economic recovery.

In the long term, the country is determined to push for administrative reform and restructure the economy towards greater productivity, efficiency and competitiveness, in which innovation and creativity are key for a rapid and sustainable economic development.

As the MPI is drafting Vietnam’s socio-economic development strategy for the 2021 – 2030 period, Mr. Dung said two pillars that would serve as driving forces for growth in the coming time are innovation and human resources. During this process, Vietnam would provide a sandbox for new business models under the digital economy, he noted.

With drastic measures from the government, Mr. Dung suggested this period would be the turning point for a new phase of development for Vietnam’s innovative ecosystem.

Therefore, Vietnam would focus its resources to boost innovation and take science, technology and innovation as key factors to ensure rapid and sustainable economic development, Mr. Dung stated.