Extraordinary policies for innovative startups: PM

The Government is committed to adopting policies, fostering favorable conditions, and taking risks to make Vietnam a world-class destination for startups and innovation globally—an ideal testing ground for novel ideas and business models.

Prime Minister Pham Minh Chinh at the event. Photos: Nhat Bac

Prime Minister Pham Minh Chinh shared this view at the Techfest – Whise 2023, a national festival for Vietnamese startups held on November 25 in Ho Chi Minh City.

Chinh emphasized that the hosting of this event for the ninth consecutive year, titled “Harnessing National Resources - Strengthening Vietnam's Startup Ecosystem and International Integration", reflects the unwavering commitment of the Party, State, and the business community to foster the growth of an innovation ecosystem and entrepreneurial spirit.

He conveyed the government's message to comprehensively promote startups and innovation, to make Vietnam a regional and global innovation hub.

“The goal is to create an open and conducive investment and business environment, realizing the vision of building a strong, prosperous nation where people experience increasing prosperity and happiness. This includes the promotion of cultural values, identity, and the Vietnamese spirit,” Chinh said.

According to the Prime Minister, embracing science, technology, startups, and innovation is an inevitable and strategic choice for the rapid and sustainable development of the country. He highlighted the importance of perseverance, courage, and wisdom in maximizing opportunities and advantages while addressing difficulties and challenges on the path of national development.

Startups and innovation, the Prime Minister stated, generate value through the exploitation of intellectual property, technology, and new business models. They serve as the key to unlocking breakthrough development for businesses and act as a crucial driving force for the rapid and sustainable development of nations, particularly in the era of the fourth industrial revolution.

Delegates at the event.

He reiterated the government's strong support and commitment to creating the most favorable conditions and environment for startups and innovation.

Entrepreneurship and innovation are regarded as essential political tasks contributing significantly to economic growth, enhanced competitiveness, improved production and business efficiency, and increased labor productivity, he noted.

In, 2023,    Vietnam is ranked 46th out of 132 countries and economies worldwide in innovation, st fourth in the ASEAN region, and among the top developing economies.

Vietnam currently boasts over 3,000 startups, with more than 140 universities and research institutes actively involved in startup and innovation activities through incubators, centers, and support clubs. Numerous large businesses, corporations, and overseas Vietnamese are actively participating in Vietnam's startup and innovation ecosystem. The recent inauguration of the National Innovation Center in Hoa Lac, Hanoi, marks a significant milestone.

Acknowledging the pivotal role of entrepreneurship and innovation in the country's overall achievements, the Prime Minister highlighted the substantial contributions from Vietnamese startups and innovations, worth hundreds of millions and billions of dollars, not only within Vietnam but also on the global stage.

Chinh expressed pride in the intelligence, creativity, and resilience of the Vietnamese people, who have successfully leveraged their unique advantages to create models that transcend national borders and integrate with the world.

While acknowledging encouraging initial achievements, it is a known fact that Vietnam's innovation and startup ecosystem lags behind some regional and global peers and does not fully reflect the nation's potential, intellect, and capabilities. Furthermore, in the current global context, especially during the "funding winter" period, international investors are exercising greater caution, diversifying their investment portfolios, and implementing stricter risk management practices.

PM Chinh and delegates at a startup booth.

Replicating another Silicon Valley impractical

To address these challenges, the Prime Minister stressed the importance of building laws that streamline procedures, minimize grant requests, reduce burdens on individuals and businesses, and crucially, decentralize power while efficiently allocating resources.

“To effectively foster entrepreneurship and innovation, a systematic strategy and focused implementation are essential, with the government prioritizing people and businesses as the central entities, subjects, goals, and driving forces of startups and innovation,” Chinh stressed.

This requires innovative thinking, awareness, and actions in line with practical conditions, alongside the establishment of effective institutions, mechanisms, and preferential policies to position Vietnam as an appealing global destination for startups and innovation.

The emphasis is on creating optimal conditions for businesses to thrive and establishing close connections between startups, investors, and experts, he added.

The Prime Minister outlined four main priorities for immediate focus: (i) startups and innovation in information technology, cybersecurity, and digital services; (ii) startups and innovation in medical technology and education; (iii) startups and innovation in environmental and energy technology; (iv) startups and innovation in agricultural economic development, with a particular emphasis on sustainable high-tech agriculture.

The call is intended to encourage initiative and creativity, mobilize resources from the entire political system, the people, and the business community, and promote investment from various sources such as angel investors, venture capital funds, startup incubators, and state budgetary support. This comprehensive approach aims to instill a mindset of catching up, moving forward, and making breakthrough efforts.

The Prime Minister emphasized the importance of building a startup culture and entrepreneurial spirit, especially among Vietnam's youth; providing opportunities for comprehensive development, encouraging risk-taking, accepting failure, and fostering a sense of pride and contribution to the nation's progress are key components of this strategy. Entrepreneurship and innovation are identified as key tasks for all levels, sectors, localities, agencies, and units, with the State leading and coordinating efforts to create a favorable environment for the entire startup and innovation system.

The approach involves a harmonious blend of internal capacity development and the optimal utilization of external opportunities and resources, leveraging the nation's traditions, culture, history, spirit of solidarity, self-reliance, and the inherent strength of the Vietnamese people in conjunction with the demands of the contemporary era.

Minister of Science and Technology Huynh Thanh Dat highlighted the uniqueness of each local ecosystem within the national innovation framework, emphasizing that no single model can be universally applied across countries or even different regions within the same country.

Presently, there are approximately 200 co-working spaces, 70 business incubators, 30 business promotion organizations, and 108 venture capital funds throughout  Vietnam. However, the Minister identified three crucial factors that significantly contribute to supporting innovative startups: (1) the presence of favorable legal frameworks and preferential policies; (2) the availability of adequate financial resources; and (3) strong links between the business sector and universities/research institutes.

He emphasized the expert consensus that replicating another Silicon Valley is impractical. Various models around the world, such as Tel Aviv in Israel, Bangalore in India, and Shenzhen in China, each have their own elements, including policy, infrastructure, human resources, cultural foundation, education, and research and development. The unique combination of these factors contributes to their identity and success.

Dat expressed confidence in the continuous expansion and improvement of Vietnam's national innovation startup ecosystem in terms of scale and operational efficiency. He envisions the ecosystem increasingly attracting domestic and foreign resources, thereby significantly contributing to the country's socio-economic development goals. This, he believes, can be achieved through collaborative efforts, open-minded approaches, multilateral cooperation, multi-dimensional interaction, and the genuine implementation of effective innovation and creativity.