Vietnam is quickly establishing itself as a crucial hub for communication tech, solidifying its role as a central point for startups in Southeast Asia. Amid global economic challenges, the region's startup ecosystem is still a thriving centre for entrepreneurs and investors. In 2023, the nation impressively amassed USD 36.61 billion in foreign direct investment (FDI), marking a 32.1% increase from the previous year and significantly exceeding expectations.
The Vietnamese government has recognised Information and Communications Technology (ICT) as a pivotal industry for socio-economic development and advocates for adopting advanced digital solutions across all government levels to enhance operational efficiencies and governance. The approval of the National Digital Transformation Program, set to run through 2025 with a vision extending to 2030, is expected to catalyse further growth in the ICT sector.
Industry forecasts predict a robust expansion of the region's ICT market. It achieved the expected 1.4% growth in 2023, reaching an estimated revenue of USD 158 billion. Industry forecasts anticipate a continuing upward trajectory as both the public and private sectors escalate their ICT adoption and new governmental laws and regulations kick in.
Government initiatives and infrastructure investments
The government has been instrumental in catalysing innovation within the ICT sector through a series of strategic policies and robust infrastructure investments. Key initiatives include promoting a national digital transformation to integrate digital technologies across government, society, and the economy—potentially contributing up to 30% of the country's GDP.
The Vietnam National Innovation Center (NIC) advances the startup ecosystem through scientific and technological support. The Ministry of Planning and Investment champions these efforts, emphasising innovation as a cornerstone of economic growth. The strategy is further supported by creating an innovative policy framework, developing human resources, and direct investments in startups.
Regarding financial backing, the government has enacted Decision No: 844/QD-TTg, first issued in May 2016 and revised in February 2021, which dedicates substantial resources to bolster the startup sector. This policy has established a national startup ecosystem portal and allocated approximately USD 42 million to support 800 startup projects and 200 startups, including 50 ventures financed through venture capital. The goal is to facilitate up to 2,000 startup projects and 100 venture-capital-financed startups by 2025, with projected investments nearing USD 85 million.
Parallel to these policy-driven efforts, substantial advancements in communication infrastructure help enhance startups' operational capabilities. The rollout of 5G technology, spearheaded by Vietnam's Ministry of Information and Communications, is set to revolutionise the startup landscape further. This initiative includes the recent announcement of bidding documents for allocating three frequency radio wave bands for 5G deployment, with auctions scheduled and plans for nationwide service provision by three telecommunications operators.
Already, 5G trials have been conducted in 55 of Vietnam's 63 provinces and cities, demonstrating significant progress and readiness for large-scale deployment. Companies like MobiFone and Vietnam Posts and Telecommunications Group (VNPT) are poised to commercialise 5G services, indicating a promising future for adopting advanced technologies like IoT, AI, and cloud-based services.
Role of tech hubs and incubators
The burgeoning tech startup landscape in Vietnam, which saw a 38% increase in startup numbers in 2020 alone, owes much of its vibrancy to the supportive environment provided by the country's tech hubs and incubators. These institutions foster the growth of startups, especially in the communication technology space, by providing critical resources for early and growth stages.
One of the most significant benefits of tech hubs and incubators is the plethora of networking opportunities. These facilities allow startups to connect with industry leaders, venture capitalists, and other entrepreneurs within the ecosystem. Furthermore, tech hubs and incubators frequently facilitate mentorship programs where startup founders can gain insights from experienced professionals in the communication technology sector.
These mentors provide crucial guidance, advice, and feedback, helping startups refine their business strategies and successfully navigate the complexities of scaling their operations. In addition to networking and mentorship, they help startups secure necessary funding. They often organise pitch events or demo days, which provide startups with a platform to present their projects to potential investors and venture capitalists. This support is particularly critical for ICT startups requiring substantial capital to develop and test new technologies.
The nation's concerted efforts to bolster its communication tech are paying off, positioning it as a formidable player in the regional startup ecosystem. The government's proactive approach to fostering an enabling environment and substantial investments in communication infrastructure has created a landscape ripe for growth and innovation.
As startups in Southeast Asia continue to grow, consumer trends and market demands suggest a promising future for the industry in Vietnam, underscored by an increasing reliance on digital solutions and a growing appetite for technological advancement. This evolving market landscape offers immense opportunities for local startups and attracts global players looking to engage with the country's vibrant digital ecosystem.
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