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In 1975, Vietnam finally emerged from the ashes of a devastating conflict that lasted more than 30 years. Back then, no one could have foreseen that Vietnam would someday take its place on the world stage as a growing economic force. But today, in 2022, Vietnam is taking its first steps towards doing just that.
At a recent webinar, ‘Technology and its Influence’, held by the Canadian Chamber of Commerce in Vietnam (CanCham), the attending entrepreneurs and business leaders agreed that Vietnam is a prime environment for innovative ideas.
Yann Rousselot-Paille, KPMG Group’s Digital Innovation Director for Vietnam and Cambodia Markets, says that the Vietnamese culture creates people who not only want to be good – they want to be great. This innate sense of ambition and desire to do things better is the definition of entrepreneurial spirit. And in Vietnam, it’s embodied by an entire nation.
The rise of the Asian Tigers is the economic success story of the late 20th/early 21st Century. Hong Kong, South Korea, Singapore, and Taiwan have seen exponential economic growth and corresponding improvements in their standard of living. Vietnam shares many of the attributes that have made the Asian Tigers roar, yet the truly extraordinary potential of this country has yet to be realized. In this article, we’ll explore some of the reasons why, and reveal how Vietnam could join – and even surpass – the first five Tigers.
Vietnam is emerging as a global outperformed
In 2018, McKinsey identified Vietnam as one of eleven global outperformers. This is largely thanks to its GDP-per-capita growth of more than 5% annually for 20 years, and its successful effort to lift a significant percentage of its people out of poverty. According to a February 2017 forecast by PricewaterhouseCoopers, Vietnam is one of the fastest-growing economies, with a potential annual GDP growth rate of about 5.1%. That would make it the world’s 10th-largest by 2050.
Between 2002 and 2020, Vietnam’s GDP per capita income increased 2.7 times, reaching almost US$2,800. Over the same period, poverty rates (US$1.90/day) declined sharply from over 32% in 2011 to below 2%.
Vietnam’s education system is already the envy of many of its neighbors. Primary-school enrolment is virtually universal – ranked higher than South Korea and Hong Kong, and only behind Japan.
Access to infrastructure services has increased dramatically, too. As of 2016, 99% of the population used electricity as their main source of lighting, up from just 14% in 1993. Access to clean water in rural areas has also improved, up from 17% in 1993 to 70% in 2016. In urban areas, it’s above 95%.
A 2019 report by Google and the Mobile Marketing Association identified Vietnam as a mobile-first market with extensive coverage even in remote areas. There were over 51 million smartphones in use by 80% of the population aged 15 and older.
Thanks to those solid foundations, Vietnam’s economy has proven resilient through various crises – the latest being COVID-19. Vietnam was one of only a few countries to post GDP growth in 2020 when the pandemic hit. However, like the rest of the developing world, COVID has dealt an extra hard shock to the Vietnamese economy.
The next step in Vietnam’s growth
All these stats show that Vietnam has come an incredibly long way in just a few short decades. But there’s more to come on the horizon.
What Vietnam needs now is the means to broaden its economic base, and enable even more of its extraordinarily industrious population to explore their commercial potential.
The green light for exports
The Asian Tigers have shown that an economic resurgence must be export-led. Sustainable, non-polluting production practices are becoming increasingly important to consumers in key markets across the developed world. But presently, trade in Vietnam is carbon-intensive – accounting for one-third of the country’s total greenhouse gas emissions. This is why the World Bank has identified greening their exports as a priority for Vietnam.
Carolyn Turk, World Bank Country Director for Vietnam, says that “trade will be a key component of Vietnam’s climate actions in the years to come. Promoting greener trade will help it keep its competitive edge in international markets.”
The new-venture environment in Vietnam
Indonesia’s start-up ecosystem – which we’ve covered in a previous article – bears direct comparison to Vietnam. In 2019, $741 million USD was invested in start-ups in Vietnam, compared with $2.38 billion in Indonesia. It’s therefore little surprise that Vietnam has created only one unicorn, compared to Indonesia’s six.
The big difference is that there’s significantly more government support in Indonesia – including the nationwide technical development plan, ‘Indonesia 4.0’. Despite this difference, the two countries share the same fundamental weakness which is currently limiting their growth potential. That weakness is the lack of the innovation funding needed to see entrepreneurs succeed.
In Indonesia, the majority of projects that gain funding are led by tertiary institutions. This effectively shuts out countless tech innovators who could find success, if only the right funding was available.
The same lessons apply to Vietnam. A more inclusive new venture ecosystem could invigorate private entrepreneurship – making finance more easily available for high-potential projects, and accelerating the momentum of high-growth businesses.
Vietnam’s economic strengths and weaknesses at a glance
Strengths
- Strong economic performance and diminishing poverty levels
- Geographically located in one of the world’s most dynamic regions
- Favourable demographics with high educational levels and health
- An attractive investment for multinational enterprises
- Export strengths in a range of sectors
- A good reputation in Science, Technology, Maths and Engineering education (STEM), with specialisation in agricultural research and biology
- Strong digital communications infrastructure.
Weaknesses
- Relatively low levels of productivity and income compared to export markets
- Poor access to funding for tech innovation
- Low level of sophistication of production and exports.
On balance, we can see that Vietnam is well-positioned to develop into a thriving tech exporter. Attracting and accelerating foreign direct investment (FDI) in the manufacturing sector will prove vital in making this happen.
Vietnam needs a technological transformation
The rise of the Asian Tigers was built on technological innovation. The same will be true for Vietnam. Driving improvements in competitiveness and innovation depends on exploiting opportunities created by new technology. But none of that will be possible unless Vietnam’s tremendous latent entrepreneurial ambition can be unleashed:
The Asian Tigers demonstrated three key steps to success:
- new capabilities in tech-based industries
- export orientation
- promotion of domestic competition.
The above three steps were able to be taken because of the venture funding of energetic entrepreneurs. The difference is – even though Vietnam has as much (if not even more) entrepreneurial spirit – the new-venture funding needed isn’t readily available. Yet.
The Dacxi Chain, the world’s first global tokenized equity crowdfunding platform, could help change that.
Dacxi firmly believes in the potential of Vietnam’s innovation tech-based economy – and that the early-stage funding crisis is the barrier holding it back. That’s why Dacxi created a solution; the Dacxi Chain.
Image credit: iStock
The Dacxi Chain wants to provide Vietnam with the investor funding and investment opportunities it needs to rapidly develop, and take its rightful place among the world’s economic powerhouses.
The Dacxi Chain global tokenized equity crowdfunding platform is designed with the belief that innovation is blind to race, religion, gender and culture. There are countless fantastic ideas and entrepreneurs in every country. Vietnam is no exception. With the right funding ability, Vietnam’s entrepreneurs and innovators can and will change the country for the better. They just need the system, support and the confidence in funding to do it. The Dacxi Chain will help to connect entrepreneurs and investors simply and easily in a regulated, well-managed environment that gives success its very best chance.
The Dacxi Chain uses blockchain technology to deliver a level of innovation funding unlike anything seen before, and enable it to be distributed fairly and equally everywhere in the world. The scale is global, but the benefits are local.
Founding local business ecosystems
Many developed and emerging economies have demonstrated that a single successful core business can form the genesis for an entire local business ecosystem. Ancillary businesses develop to serve the needs of the core business, and the requirements of its staff and their families. This multiplier effect quickly leads to an improvement in the quality of life of the whole community.
Finland is a prime example. The country was once an economic backwater, dependent on a low-value forestry industry, and Nokia was a rubber-boot manufacturer. Not only did Nokia evolve into a world-leader in telecommunications and make a fortune for its shareholders, it seeded literally thousands of other, smaller tech companies. These companies together turned Finland into one of the most vibrant tech countries in the world.
Dacxi believes the same can happen in Vietnam. The Dacxi Chain will provide the country with an efficient world-wide system of equity crowdfunding – based on the unique capabilities of tokenization. This will help local entrepreneurs realise their dreams, and raise the capital they need to build a vibrant new tech economy. Could Vietnam be another Asian Tiger? At Dacxi, we’d bet on it.
Further reviews:
For the latest information on Dacxi Coin and the Dacxi Chain global tokenized crowdfunding platform, visit dacxicoin.io. You can download the Lightpaper, and join the Dacxi Coin telegram community. For media enquiries please contact pr@dacxi.com
This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
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