Facilitating venture capital towards Vietnamese startup development
Vietnam is working hard to unclog financial resources to develop a knowledge-based digital economy amid the wide influences of Industry 4.0.
Nguyen Chi Dung, Minister of Planning and Investment, discussed with VIR how to lure in more venture capital funds in innovation in order to motivate economic growth in the months to come.
|Nguyen Chi Dung, Minister of Planning and Investment|
The Ministry of Planning and Investment (MPI) combined efforts with the Ministry of Science and Technology last week to hold, for the first time, the Vietnam Venture Summit. Why did the MPI choose this point of time for the event, and what were your expectations about the summit?
Vietnam is working hard on building a national strategy on the Fourth Industrial Revolution to fast-track economic growth and thus narrow the development gap with other countries, leave the middle-income trap, and leap up to become a high-middle-income country. In this context, the Vietnamese government defines innovations as one of the important motivations for national socio-economic growth in the coming time.
The Vietnam Venture Summit aims to connect investors, especially venture capital funds, with startups and with the government to clear the way for financial resources for innovation activities across the country. This is one of the key tasks for Vietnam to perform the National Strategy on Industry 4.0 successfully.
After the first edition, I expect that the Vietnam Venture Summit will be held annually to support startups and introduce local potential, advantages, and improvements in the business climate, thus enabling venture capital funds to make investments in Vietnam via different channels. This includes mergers and acquisitions and even foreign direct investment (FDI). Through such an event, we also expect powerful Vietnamese corporations to join the country’s efforts to support startups and promote innovation activities.
Together with building the National Strategy on Industry 4.0, the MPI has also proposed the establishment of the Vietnam Innovation Network (VIN), the National Innovation Centre (NIC), and now this summit. What is the significance of these moves, and what is the progress on these strategies?
With the economic approach to Industry 4.0, there are questions as to what the impacts will be on Vietnam’s economy – what the challenges and opportunities are; how to benefit from the revolution; and how to continue the reform. The questions are also about economic restructuring, and renewal of the growth model to increase national productivity and competitiveness. We are aware that Vietnam needs to drastically take the necessary measures to align with the Fourth Industrial Revolution in the spirit of “Now or Never”. To realise this, sci-tech and innovation are the key for Vietnam to develop more sustainably and effectively, and to narrow development gaps with others.
To realise this, we need to create an innovative ecosystem based on the core factors of policies, capital, infrastructure, and human resources. For these reasons, it is necessary to develop the VIN and the NIC, and hold this kind of summit to connect those involved so as to establish the Vietnam National Innovation Fund.
At present, the MPI has completed the basics for the National Strategy on Industry 4.0, and is seeking comments from ministries, agencies, and experts. The VIN made a debut last year, while the NIC is expected to be approved by the government soon. Upon approval, there will be a resolution on unparalleled incentives for the centre, after which we will then develop a perfect innovation ecosystem for Vietnam. If everything goes smoothly, construction is hoped to begin by the end of this year and completed by the end of 2020.
Initially, we will co-operate with Hanoi authorities to establish an innovation centre in September 2019. When this centre is put into operation, we have ambitions to announce a partnership with Google in manpower training for the digital transformation. Currently, we have reached some initial agreements and expect to sign a memorandum of understanding with Google soon.
In addition to the VIN, attracting talents and training high-quality human resources is very important. Many multinational corporations have already shown their interest in the field.
After the master plan on the establishment of the NIC was officially submitted to the government for approval, you visited some countries including Singapore and Germany to connect investors. What was the outcome of these trips?
We and the US’ management consulting firm Boston Consulting Group have been working to connect with technology giants, venture capital funds, universities, and research institutes.
Although there have been no official agreements signed yet, a number of corporations such as Qualcomm, Siemens, and Google have committed their support.
I am sure that the international community and investors are very interested in the innovation market in Vietnam. They wish to set up headquarters in Vietnam to connect with innovation centres in this country, in startups and through manpower.
In particular, the Vietnamese and Singaporean governments have added sci-tech and innovation to the areas of co-operation in their economic connectivity. I believe that this co-operation will be further strengthened when the Vietnamese government approves the establishment of the NIC.
Besides the supporting commitments for the centre, attracting investment for the establishment of the Vietnam National Innovation Fund is also important. Evidently, capital funds are also interested in the Vietnamese market and the participation of 100 venture capital funds at the summit is proof of this.
What is the government’s orientation in the attraction of FDI in innovation and startups as part of the country’s overall FDI strategy to improve the socio-economic growth quality?
The Vietnamese government considers innovation as an important driving force for economic growth in the coming time. Thus, the government has been working and implementing supporting policies to encourage innovative activities, thus creating the most favourable conditions for the development of startups.
What is more, the Vietnamese government is constantly continuing to improve the country’s regulatory framework to unblock financial resources from venture capital funds in startups in the most effective manner. This is one of the country’s main points of focus in future FDI attraction.
FDI in innovation will contribute to realising the country’s strategy to increase the quality of FDI inflows, as well as to realise the economic restructuring and the renewal of the growth model towards increasing quality, efficiency, and national competitiveness. VIR
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