Sowing the seeds for an entrepreneurship and innovation ecosystem

Vietnam IPP

Ho Chi Minh Innovation start-up week

The Viet Nam – Finland Innovation Partnership Programme was launched to lay the foundations for a national entrepreneurship and innovation ecosystem that will foster entrepreneurship and sustainable economic growth.

September 26, 2018
  • SDG: #9, #4, #5, #8, #17
  • SECTORS: Development Consulting
  • COUNTRIES: Vietnam
  • DONOR: The Ministry of Foreign Affairs of Finland and the Ministry of Science and Technology of Viet Nam
  • CLIENT: The Ministry of Foreign Affairs of Finland and the Ministry of Science and Technology of Viet Nam
  • CONTRACT VALUE: EUR 11 million
  • DURATION: Phase I: August 2009–March 2014. Phase II: March 2014–October 2018

Viet Nam is one of Asia’s biggest economic success stories, posting an average GDP growth rate of 5.6% since 1986. From 2005 to 2010, a period that included the country joining the World Trade Organization, Viet Nam’s GDP grew at an average of 7% per annum. Only the People’s Republic of China shows higher growth rates in Asia.

Viet Nam’s rapid economic growth was driven by internal restructuring, a youthful population, and the transition from an agricultural economy to one driven by services and manufacturing. As a result of this phenomenal growth, Viet Nam transformed from a low-income agrarian to a lower-middle-income economy, but as the population ages and the transition to manufacturing and services comes to an end, Viet Nam’s growth could begin to slow. It is therefore important for Viet Nam to find additional sources of growth in order to maintain its growth rate in the long term. One major way to achieve this is by encouraging the Vietnamese economy to evolve into a driver of innovation, creating increased value and economic growth by being the originator of new ideas and products that are in demand worldwide. The Government of Viet Nam has taken this approach to maintaining its current economic growth trajectory, setting the objective of becoming an industrialized, middle-income country with a knowledge economy and a national innovation system that supports sustainable socioeconomic growth.

Fostering innovation

In 2009, the Governments of Finland and Viet Nam launched the Viet Nam – Finland Innovation Partnership Programme (IPP). The IPP was co-funded by the Vietnamese and Finnish governments and supports Viet Nam’s national innovation system as well as the country’s goal of becoming a knowledge economy.

The programme’s main goal was the creation of an enabling entrepreneurial and innovation ecosystem in Viet Nam; which supports the establishment of high-growth, innovative companies; promotes collaboration with foreign partners, particularly those from Finland; and contributes to innovation-led economic development. During Phase II, which ran from March 2014 to October 2018, the IPP pursued this goal by means of three main methods: innovation funding, promoting and facilitating the creation of partnerships for innovation, and capacity building and institutional development, with the intention of acting as a "sandbox" where innovation ecosystem creation activities could be piloted for further expansion at a later date.

IPP’s innovation funding took the form of two-stage grant funds that were offered to 18 start-ups and 14 consortiums dedicated to building innovation ecosystems in Viet Nam. Furthermore, experiences during the grant application process resulted in the IPP expanding its services to include training and mentoring in subjects such as the creation of business plans, as well as networking events between start-ups and other members of the innovation ecosystem.

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Capacity building and institutional development mainly took two forms during IPP’s run. On the one hand, the IPP supported the Government of Viet Nam in the formulation of entrepreneurship- and innovation-friendly policies. Moreover, the IPP engaged in training and capacity building, not only among policy makers and educational institutions, but also in the innovation ecosystem itself. The two Training of the Trainers (ToT) courses are an excellent example of this. ToT1 trained twelve Vietnamese members of private companies, entrepreneurship support organizations, governmental agencies, and Vietnamese universities to become business consultants. The course consisted of two months of intensive training, followed by six months of work experience. ToT2 targeted Vietnamese universities with the aim of promoting entrepreneurship and innovation (E&I) training in these universities, while simultaneously stimulating the formulation and development entrepreneurship and innovation ecosystems within these institutions. This course comprised a two-week boot camp, followed by a six-month practical period, during which partner universities created their own pre- and post-graduate E&I course curricula, as well as course curricula to train more E&I trainers in the future. The open calls for these trainings attracted over fifty Vietnamese universities, several of which have established their own E&I centres, incubators, training courses, and/or programmes. In addition to this, the IPP is facilitating the transfer of information and knowledge gained during these courses to those who wish to train more people after the programme has ended. So far, the IPP ToT courses have been replicated by six universities and organisations in the entrepreneurship and innovation sector.

Institutional development took the form of providing evidence-based advice for government policy change, providing tertiary education institutions with guidance around the implementation of E&I activities, and offering international training for over 100 policy influencers and executives in the sector. In this sense, IPP acted as inspiration and a strong example of best practice for other would-be innovation facilitators to follow. This approach reaped impressive benefits. The programme's transparent use of open-source processes and tools have resulted in the wide-spread adoption of these resources in the establishment of E&I ecosystems all over Vietnam. Consultancy by IPP experts heavily influenced new policies around entrepreneurship and innovation, policies that are paving the way to greater openness to innovation and entrepreneurship on the part of the Vietnamese government. All of these events together have played a great part in the Vietnamese innovation ecosystem, which has grown from being all but non-existent to containing a core of over 300 ecosystem developers.

The feedback from IPP2’s earlier programs was so convincing that we wanted to co-organise a ToT programme targeting Ho Chi Minh City’s Ecosystem with IPP2. The programme engages all key ecosystem stakeholders and equips universities to design, pilot, and deliver integrated sustainable high-impact entrepreneurship and innovation offerings.

Mr Huynh Kim Tuoc, Director of ECC within HCM Department of Science and Technology and Founding Chairman of the Saigon Innovation Hub

The IPP’s activities in partnership development focused on facilitating networking and the creation of domestic and international partnerships to strengthen Viet Nam’s innovation ecosystem. Domestically, IPP activities have resulted in the formation of various networks between members of the Vietnamese innovation ecosystem, such as policymakers, universities and lecturers, venture capitalists, and entrepreneurs. Internationally, the IPP placed a special emphasis on establishing a trade-based partnership between Viet Nam and Finland. Examples of domestic and international partnership creation activities include the IPP sponsoring Vietnamese individuals and organisations to go to some of the biggest events for start-ups worldwide; partnering with SLUSH, one of the world’s leading start-up conferences; and supporting the HATCH! Ventures Consortium through its grant funding mechanism. HATCH! Ventures went on to develop a world-class start-up support system, and their HATCH! FAIR has become the leading start-up exhibition event in Viet Nam. To encourage trade between Viet Nam and Finland as part of an aid-to-trade facilitation process, IPP also launched the Viet Nam Market Access and Partnership (VMAP) and City–City programmes. Fifty professionals that had been trained by IPP handled these programmes' facilitation.

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For VMAP, the IPP put out a call for expressions of interest from Finnish companies interested in expanding into Viet Nam and the South East Asian region. Eighteen Finnish companies were chosen and assigned to twenty innovation coaches who were all alumni of the IPP’s ToT programmes. Together, the coaches and Finnish companies investigated possible partnerships and opportunities in Viet Nam. By the end of the VMAP process, between five and seven companies are preparing to scale up activities in Viet Nam by establishing business entities, implementing pilot projects, and/or signing memoranda of understanding.

The City–City partnership programmes were created to foster a closer relationship and partnership between Vietnamese and Finish municipalities. The partnerships especially took the form of collaboration to establish smart cities and innovation ecosystems across Viet Nam.

Encouraging sustainable development

The IPP’s activities mostly contributed to Sustainable Development Goal (SDG) target 9.2 by supporting Viet Nam’s overall goal of becoming an industrialized, middle-income, knowledge-based economy by 2020. The programme also contributed to SDG target 9.3 through its funding, innovation ecosystem development, and partnership-building activities. These activities also contributed to SDG 17. Finally, through the continuous involvement of women at every phase of the programme (e.g. funding, recruitment, training, evaluation panels, etc.) the IPP also contributed to SDG 5.

80 %

of start-ups funded by IPP survived the start-up phase.

More than 300

jobs were created by startups funded and accelerated by the IPP.

2 million

visits and downloads from IPP’s knowledge sharing library

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