A recent Channel News Asia piece explains how Vietnam’s start-up scene is successful thanks to its young, educated and savvy people with Ho Chi Minh City being the epicentre of the start-up scene where most of the country’s 3,000 start-ups operate. Ho Chi Minh has even produced one of Southeast Asia’s unicorns – game developer VNG which became the first Vietnamese technology company to hold an IPO in the US in June, and has more than 70 million users from Vietnam, Myanmar, Japan, South Korea and Malaysia on its chat app called Zalo alone.
According to the article, many young Vietnamese are sent overseas to study and return with grand ideas of starting their own companies (Note: an estimated 21,000 Vietnamese students attended American universities last year, the sixth largest number of foreign students in the US).
Young Vietnamese are able to focus on building strong start-ups because they enjoy strong family support as Vietnamese family units typically consist of three generations living in a single house. Without a pension system, children take care of their parents in old age and grandparents provide childcare and support while young parents are out working. This strong family nucleus has been a source of support and safety net for young Vietnamese executives who can devote more time and energy to their businesses.
A strong push by the Vietnamese government has also helped the start-up scene as officials have promised financial support of US$90 million to more than 2,000 local hi-tech start-ups. They have also made plans to set up innovation hubs that provide training programmes, legal consulting and networking activities to connect start-ups with universities and research centres.
In addition and in May 2016, early-stage venture fund 500Startups pledged a further US$10 million to their Vietnam fund plus other venture capital companies like CyberAgent Ventures and SeedCom are also active and investing in new firms.
Nevertheless, talented young Vietnamese are hard to retain in a competitive business environment with most companies saying they face a high staff turnover rate. The turnover cycle usually starts after companies pay an extra month’s pay to employees just before the Lunar New Year or the Tet holiday (usually in late January). With this bonus in their pocket, many employees do not return to work afterwards. In fact, data gathered by recruitment sites show 68% of young local Vietnamese staff reported wanting to quit their jobs then.