Science and Technology Entrepreneurship at the Forefront of ASEAN Development
March 24, 2023
In South East Asia, a new era of innovation is being born. We could not be more excited to share the launch of Innovates Vietnam, our latest program centered exclusively on supporting Vietnamese innovators at the forefront of ASEAN development. The GIST Initiative is proud to share that we are continuing to launch programs specifically designed to empower ASEAN Innovators, building off our continuing experience with APEC economies and our long-standing, close relationship with innovation economies throughout Asia.
ASEAN, or The Association of Southeast Asian Nations, includes 11 South East Asian countries, many of which are countries GIST has hosted meaningful programs and work in, from hosting our latest Catalyst Pitch Competition in Bangkok, to investors programs in Malaysia and Indonesia, and supporting Innovation Hubs throughout ASEAN countries like the Philippines and more. ASEAN economies collectively are at the forefront of fascinating developments in science and technology, and among them, Vietnam is an extraordinary example of an ecosystem putting that potential into practice.
Vietnam is essential for the GIST Initiative to continue building programming and a natural home for the next Innovates program. As U.S. Ambassador to Vietnam, Marc E. Knapper described in his address at the 11th meeting of the Vietnam-U.S. Joint Committee on Science-Technology Cooperation, increasing cooperation between the two countries in science and technology will help promote the prosperity and progress of both sides. We couldn't agree more–Vietnam is at the forefront of multiple exciting trends in innovation, with the GIST Initiative being able to play an important role in empowering innovations and building a new future not just for Vietnam, not just for ASEAN, but for the whole world.
Innovates Vietnam is our latest Asia-based program offering and will surely be one of our most transformative yet. It is an 8-week accelerated, intensive training program in the Lean Startup process. It focuses on using agile customer discovery to identify and evaluate scalable opportunities while giving participants the tools they need to proceed with the commercialization of their innovation. This program will be an exciting next step in building closer relationships and connections through innovation and creating shared innovation prosperity throughout U.S.-ASEAN relations, and is just one part of building on a wave of investment by the United States into ASEAN economies. We are thrilled to play a role in supporting the extraordinary innovation happening in this region- innovation that centers issues in which ASEAN economies play an essential part in solving, like fostering climate action and environmental solutions, building shared regional economic systems, protecting global public health, and centering gender parity and furthering women's equity.
Why is Vietnam important for South East Asia’s economic development?
Vietnam is pouring incredible resources into developing its science and technology sectors, working at multiple levels to use science and technology innovation as a critical pillar for national development. It is building on multiple decades of success on this front–as the World Bank Vietnam: Science, Technology and Innovation Report outlines, Vietnam has been a " trailblazer in its development journey over the last three decades." The country has emerged as a vibrant middle-income economy in just one generation. The economy has expanded at an annual average of nearly 7 percent since 1988, leading to an almost five-fold increase in per capita income and a continuing decline in poverty. Vietnam has successfully carved out a role within global value chains (GVCs) and continues attracting high levels of foreign direct investment (FDI). However, it describes that "Vietnam's tremendous achievements notwithstanding, looking forward to the pace of convergence to high-income status will depend on its ability to move towards an innovation-driven growth model." At this intersection, the GIST Initiative looks forward to empowering Vietnamese innovators working to do that, fostering critical new developments in science and technology innovation.
What makes Vietnam ideal for science and technology startups?
A key catalyst for this innovation development is coming from Vietnam's emerging role as a hub for startups–according to the recently released Emerging Giants in Asia Pacific Report, Vietnam was home to just 1,600 startups at the start of the COVID-19 pandemic, but that number has jumped to more than 3,000 now, including four unicorns, and with no signs of slowing down anytime soon. Venture capital deals surged to 1.1 billion USD in 2021, up from 301 million USD in 2020 and 330 million USD in 2019. Tim Evans, CEO of HSBC Vietnam, captured this excitement as he articulated that "Vietnam has emerged as a hub for startups, closely competing with the likes of Indonesia and Singapore. With a young, energetic, educated population, high smartphone and internet penetration, and strong government support, Vietnam should maintain its position as a compelling destination for tech entrepreneurs and investors, making the country a thriving environment for potential unicorns".
Which sectors are making big impacts in Vietnam?
Beyond purely economic gains, it's worth considering which sectors this energy is being expressed in and why that's important. Science and technology innovation has emerged at the forefront of Vietnam's future, with its burgeoning potential to become a hub for technology as the government's strategic efforts to strengthen the country's digital economy could reach US$52 billion by 2025. Already, Vietnam's internet economy hit 16% growth year on year in 2020, the highest in Southeast Asia, and it has the potential to reach US$220bn in gross merchandise value by 2030. Under the National Digital Transformation Programme, the Vietnamese government aims to continue to support vital economic sectors, which include science and technology solutions in finance and banking, manufacturing, energy, and healthcare. One key example of this digital transformation has been artificial intelligence (AI)–Vietnam climbed seven positions in the Government AI Readiness Index 2022, ranking 6th among ASEAN countries and 55th globally, as shown in the latest report by Oxford Insights.
Additionally, Vietnam is uniquely positioned to make serious advancements in green tech and climate mitigation–two impactful areas where GIST has provided continued support. The challenges are steep: Vietnam is more exposed to climate risk than nearly any other country in the world. By some estimates, it is one of the top five countries likely to be most affected by climate change. However, it is also one of the most capable of making extraordinary progress in this regard. It has natural endowments for wind and solar, enormous potential for next-generation technologies built on sustainably-mined rare earth minerals, and meaningful investment returns. By supporting climate-friendly technologies, Vietnam could help its industrial base access new value pools worth between $9 trillion and $12 trillion by 2030, growing the country's GDP. Ultimately, funding the energy transition would represent a $1.5 billion revenue opportunity by 2025 for Vietnamese banks from issuing transition finance products. Tremendous headway is already being made to foster science and technology solutions to get there, from launching the new Vietnam Climate Innovation Center, building climate financing, boosting legal frameworks, and transforming its energy supply with the help of programs like the USAID Vietnam Low Emission Energy Program. With so much at stake, the GIST Initiative is working to help center climate solutions and empower the innovators bringing these new solutions to life.
Which challenges do women entrepreneurs face in Vietnam?
One must recognize the importance of women entrepreneurs in any of these processes. In 2020, Vietnam ranked second in Southeast Asia and 25th globally in terms of women's business ownership, according to the Mastercard Index of Women Entrepreneurs. Women's equity is vital to Vietnam's innovation future. According to the National Strategy on Gender Equality for 2021-2030, the Vietnamese government expects more women business owners in the coming years, accounting for 27 percent of all enterprises by 2025 and 30 percent by 2030. However, these women are facing sizable challenges–the percentage of women-owned businesses is still lower than the indicator set for 2020, and 99 percent of these are micro-, small-, and medium-sized enterprises concentrated in lower productivity sectors. In the economic downturn due to the COVID-19 pandemic, half of these enterprises were partially suspended or temporarily dissolved. Furthermore, the rate of women-owned businesses reporting a decline in revenues of 75 percent or greater in the first quarter of 2020 was almost double that of their male counterparts.
A review of capacity building for women entrepreneurs in Vietnam conducted in 2020 revealed that existing training programs need to be more demand-driven and gender-sensitive. Entrepreneurship programs working in Vietnam must consider the unique needs of women entrepreneurs in this region, building solutions that empower them to lead the science and technology revolution and build a better climate future for Vietnam and the world.
What's next for Vietnamese innovation?
The GIST Initiative and the Innovates Vietnam program can play a crucial role in helping in these collective efforts. The World Bank Review of Science, Technology, and Innovation describes various strategies for catalyzing Vietnam's innovation sector in its SWOT analysis. These include strengthening the human resource base for innovation, fostering innovation in the business sector, and facilitating innovation linkages. These are all cornerstones of the GIST Initiative's approach to program development. Building on our experience providing training and opportunities to over 15,000 startups, we are thrilled to implement the next generation of entrepreneurship programs in this exciting ecosystem. Being in Hanoi, a leading center of innovation, development research, and technology application and transfer for the country, presents an extraordinary opportunity to do just that.
Applications are now open for this program: learn more and apply today! Innovates Vietnam represents just one facet of our work in Asia. Stay tuned for more exciting news and opportunities, and be the first to know by signing up for our newsletter!