Innovative startups are considered a new driving force for socio-economic development. (Illustrative image)
Innovative startups are considered a new driving force for socio-economic development. Therefore, a legal framework is being developed and improved to create a favourable environment for this dynamic and youthful sector. In recent years, startups have introduced unique products and services and pioneered digital and green transformations in the country.
Numerous digital applications and platforms have emerged to serve daily life, such as mobile payment solutions (MoMo, VN Pay), ride-hailing services (Be), food delivery platforms (ShopeeFood), enterprise management solutions (Haravan, Sapo), green technology solutions, AI-powered diagnostic tools, and IoT systems for monitoring agricultural production. Many startups have been recognised in the National Creative Startup Talent Search Competition for their rapid growth potential, ability to attract investments, and capacity to partner with major players to expand their markets.
These startups exemplify Vietnam's innovative spirit, promoting the country’s dynamic and creative image in international arenas. Despite challenges in the global and regional contexts, innovative startups in Vietnam continue to attract venture capital. The Global Innovation Index indicates that Vietnam’s ranking for venture capital-backed deals has risen by ten places, reaching 44th out of 133 countries.
Although there is significant potential and opportunity for growth, experts point out that innovative startups face several weaknesses. In addition to common challenges such as limited management experience, difficulty accessing capital, lack of professional skills, unclear business strategies, high competition risks, legal compliance difficulties, and ineffective distribution channels, there are two particularly notable shortcomings.
First, many startups choose to address easy or low-risk problems rather than tackle bigger challenges with higher value creation potential. This could stem from a lack of confidence, fear of failure, or insufficient information about market demands. As a result, these companies miss opportunities to innovate and develop breakthrough solutions. Their products and services fail to meet market needs, leading to a lack of customers or investors.
Second, many startups focus solely on small markets and lack the experience to identify and address challenges that arise during market expansion. This limits their ability to adjust business strategies, compete with stronger players, and attract investments, as venture capital funds typically seek companies with high growth potential.
Experts recommend that startups address these issues by conducting in-depth market research and focusing on solving significant, urgent, and socially meaningful problems rather than opting for “safe” options. Additionally, startups should evaluate potential challenges in scaling operations and develop strategies to address them early in the product or service development phase.
At the same time, the government should continue improving the legal framework, policies, and institutional systems to comprehensively support startups and foster an environment conducive to their growth. Efforts should focus on mobilising resources, including funding, infrastructure, and expertise, as well as promoting international cooperation in training human resources for innovative startups. This will provide essential support, investment, and partnership opportunities for their sustainable development.
Minh Anh
