Building ASEAN into Asian Innovative Startup Hub

9:37:42 AM | 27/10/2020

“We propose organizing the Annual Startup Forum toward the formation of the ASEAN startup network, toward building ASEAN into an innovative startup hub of Asia and the world”.

This proposal was put forth by Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI) and Chairman of the National Steering Committee for Startup Program, at the ASEAN Startup Forum 2020 themed “Cooperation toward transparency and sustainability in the digital era and new opportunities in the digital era” recently held in Hanoi.

Branding ASEAN innovative startup

Digital transformation is not only for big businesses but for all, including micro, small and medium enterprises (MSMEs), he said. MSMEs will be the owners of the digital era rather than giant ones.

“We have many good practices and experiences in building startup ecosystems in individual ASEAN countries. Now it is the time for us to work together to create the ASEAN startup ecosystem, an ASEAN brand of innovative startups,” Dr. Loc emphasized.

He added that, with digital technology and technology platforms, the world is getting smaller and small businesses will grow and confront giants. SMEs are present in all economies. “So, how can MSMEs conduct digital transformation and grow. This is our responsibility," said the VCCI President.

For Vietnam, to form a really strong, capable startup force to provide Vietnamese branded products and services with high quality and sophistication, dominate the domestic market and reach regional and even global markets, investment for startup must be tightly focused, said Mr. Pham Dung Nam, Director of the Office for the National Innovative Startup Ecosystem Support Project to 2025 under the Ministry of Science and Technology. No superficial support for startups is encouraged. Support must be combined with short-term and long-term policies, focused on potentially innovative startups which are likely to have rapid growth in priority sectors of the economy or generate products and services with unique strengths of the region or the country.

In investing in entrepreneurship, the role of the society and the business is extremely important. As for innovation research, the Government can invest in fundamental research, applied research and a part of experimental production, said Mr. Nam. To bring research outcomes from laboratories to the market, apply them to production and business activities to create new products and services with added value for the society, there is a need for responsible investment from social forces, venture capital funds and angel investors, with giant firms playing an important role. There is a need for a really effective public-private partnership mechanism to mobilize financial resources to invest in startups and creative startups.

Notably, according to Mr. Nam, in the national innovation and startup ecosystem, universities play an important role as they provide high-quality human resources for industrial and social sectors and contribute to the increase of intellectual property and intellectual capacity for businesses. Students with many creative ideas and fresh thinking are potential inputs for startup projects.

Four initiatives to promote startup networking

To keep up with modern development trends, Vietnamese universities need to be equipped with sufficient capacity to strengthen scientific research, technology development and technology transfer and form incubators and business accelerators to nurture innovative ideas and spinoffs and startups, Mr. Nam added.

In addition to financial resources, innovative startups need to be supported by a favorable hard and soft technical infrastructure. These include co-working spaces, Internet information technology infrastructure, information and databases, networks and partnerships, especially mentors, trainers and advisors for startups, market development and domestic and foreign investor connection.

“More importantly, it is necessary to foster an enterprising culture that inspires people to confront risks and challenges and tolerate failure as an inevitable stepping stone to success. However, for a country influenced by traditional Asian cultures like Vietnam, changing people's mindset and startup culture takes time and a roadmap, starting from long-term governmental policies,” he affirmed.

While the starting point, level and scale of ASEAN economies differ, they share the same purpose toward the formation of a startup community, an enabling startup ecosystem in ASEAN where they can promote investment cooperation and strongly develop the business force, businesspeople and especially MSMEs in ASEAN member countries. To that end, according to Mr. Nam, it is necessary to consider setting up and operating a highly interactive digital online recruitment platform to connect national startup ecosystems of 10 ASEAN economies (ASEAN Startup Ecosystems Supporting Digital Platform), thus fostering collaborative relationships, online information sharing and partnership connections among stakeholders in the ASEAN startup ecosystems.

In addition, we need to consider the possibility of mobilizing resources to form a type of venture capital fund or a funding assistance program for innovative startups from ASEAN member economies and organize accelerated entrepreneurship skills training programs for creative startup groups in ASEAN member economies.

In particular, according to Mr. Nam, it is possible to periodically organize events on ASEAN Startup Community Connection Day, which can be held alternately in each country to facilitate meetings and exchange experiences, demonstrate products, services and connect startups with investors.

Ms. Caitlin Wiesen, UNDP Resident Representative in Vietnam

Asia is home to more than 60% of the world’s youth, about 700 million young people. It is estimated that they account for half of the jobless people in the region. The region has one of the highest young startup rates across the globe, and 40% of these startups are creating jobs. In countries like Indonesia, Malaysia, Vietnam and Thailand, micro, small and medium enterprises (MSMEs) account for over 70% of the jobs in the private sector. 

In UNDP, we have been supporting business development in Asia and in Vietnam through various initiatives. In Vietnam, together with the Vietnam Chamber of Commerce and Industry and the National Startup Support Center under the Ministry of Science and Technology and Youth Unions, we are working to promote business integrity, responsible and impact business, and entrepreneurship among young people. This year, more than 140 young entrepreneurs from 26 provinces have received training on how to protect their business from corruption by adopting business integrity tools and practices from the outset.

UNDP is committed to deepening our support to ASEAN countries and businesses in their efforts to develop a vibrant and sustainable startup environment. We also hope to enhance the partnership between ASEAN countries and other regional hubs around the world.

Mr. Gareth Ward, UK Ambassador to Vietnam

Vietnam's startups are very potential. I believe that in the future they will thrive strongly. However, they are still challenged by policies. Policy barriers in Vietnam must be placed in relation to actual policy enforcement and we can then see a complete picture that the startup community is seeing and finding the way to go. Startups are also troubled by cumbersome administrative regulations and sub-licenses.

An open mindset will be a good idea to solve difficulties for startups. We can completely listen to them to know where they are stuck to find solutions. We can respond quickly and troubleshoot regulations in the shortest possible time instead of letting startups wait too long. This is also a way that the UK takes to have more big businesses. We have many strong businesses because of robust policy support. Initially, they are just small startups but, after a short time they become billion-dollar firms. This is what Vietnam can absolutely learn from.

In addition, technology is the key to the future. When startups want to grow fast, technology must be prioritized because technology application will help improve productivity, lower product costs and help improve product competitiveness.

Mr. Pham Dinh Doan, Chairman of Phu Thai Group, Chairman of the ASEAN Digital STARS Startup Heritage Project

The ASEAN Startup Forum is an initiative of Vietnam in the cooperation framework with the ASEAN Digital Startup Heritage Project (Digital STARS). Extending the focus of ASEAN BAC 2019 on Industry 4.0, ASEAN BAC 2020, themed “Digital ASEAN: Sustainable and Inclusive”, emphasized the impact of the digital era; connectivity of economic development and social development: Sustainable and inclusive; and demonstrated the pioneering character of the business community: innovative and responsible for the sustainable development of the region.

The COVID-19 pandemic has seriously affected economies in the region, disrupted production, weakened demand and broken supply chains. However, from a positive perspective, this is a boost that inspires businesses to adopt digital transformation. Supporting MSMEs in digital transformation will also provide equal opportunities and foster innovation and inclusive growth.

Therefore, the focus of the project is to help MSMEs readily respond to opportunities and challenges of the digital age and to the rapidly changing business environment to be able to grow stronger and more sustainable. Supporting MSMEs for digital transformation will also bring equal opportunities for vulnerable groups such as women, young entrepreneurs and the poor, and put people at the center and leave no one behind.

 By Quynh Chi, Vietnam Business Forum