International Economics - This Industrial Revolution in Vietnam

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This research paper focuses on specific opportunities and challenges in the Vietnamese policy toward startup companies. Furthermore, the situation in which a significant amount of original Vietnamese startup companies tend to choose Singapore rather than Vietnam as their mother land will also be discussed.

- Discussions of findings

- The Fourth Industrial Revolution and Startup

The Fourth Industrial Revolution has been a current trend of automation and exchange data in manufacturing technology, creates the term of “smart factories” in which cyber-physical systems monitor the physical processes of the factory and make decentralized decisions. The physical systems become Internet of things, communicating and cooperating both with each other and with humans in real time via the wireless web (Forbes 2016). Apparently, Industry 4.0 is an inevitably global movement which has been changing the whole world in a very different way compared to the three previous industrial revolutions. In this revolution, the key platforms are development of technology, digital transition and interconnection. The innovation based on technology and technical changes affects the industry considerably and also modifies business and market in the way progress, products and services work. Thanks to this transformation, not also factories are going more digital and more connected, production processes become ultra-modern, more autonomous and more effective but also the way of people and customer have access and approach to the product and services changes as a result of the spreading globally of Internet, smart phone and other access.

This industrial revolution has created a new form of business in which new technological platform businesses are rapidly multiplying into many services and sectors based on the stages of technology, Internet and digitalization. These technology platforms bring about competitiveness between companies or enterprises in the race of technology. In the path for the future technological industry, companies who want to survive, catch up with others and be pioneer need to be the most innovative in market based on the basis of technology and digital transition. As a result, there is an emergence of start-up companies occur globally in recent times. Start-up companies are typically the most new venture establishes, fast-growing business which offering and developing innovative products, services and process. Start- up companies is one of the representations for the trend of this revolution with innovative products and services related to digital industry. Startups brings to the industry their series of digital innovations such as automation, big data, cloud computing and the internet of things. The community of start-up has been increasing numerously all over the world in wide range of sectors and has contributed billion dollars for the economies.

- Current trend of startup in Vietnam

2.1. The trend of Startup in Vietnam

In recent years, startup has been a well-known trend and a growing tendency among businesses in Vietnam. Vietnam economy, which does not stand outside in the fourth industrial revolution, has been witnessed the increasing of innovative industries to catch up with the world. With the population more than 90 million, great number of young population Vietnam that is relatively active on Internet, social media and mobile, and a national enthusiasm for technology, engineering and entrepreneurship, Vietnam is seen as a promise and rapidly growing startup ecosystem.

Indeed, the start-up movement in Vietnam, has been growing strongly particularly among young generation which is a key driver for economic prosperity and growth. In Vietnam, there were about 600,000 small to medium enterprises, 30% of 200,000 businesses in Hanoi are startups (East Asia Forum 2017). The startups ecosystem varies on wide range of sectors such as retails, financial technology, agricultural startups, app developments, etc but mostly IT and service based on technology are the most attractive industries. 2016 was witnessed the year of startups in Vietnam with the number of start-up companies’ rose in quantity and quality and more start-up funds and support centers were established. There were more than 110.100 small enterprises established in 2016, registered capital more than 891 thousand billion VND. In average there are 12 new enterprises set up in market every hour, the highest statistic up to that time in Vietnam (Songmoi.vn 2017). And in 2017, about 39580 startups have entered the Vietnamese market in just the first four months, an increase of 14 percent from the first quarter of 2016. Aggregate capital registered in 2017 is approximately US$ 17 billion, an increase of 54 percent compared to the first quarter of 2016 (East Asia Forum 2017).. Some startups now are able to attract billion USD from foreign investment and have succeeded not only domestically but also have good results in foreign markets. A variety of events, workshop, seminar and forum related to startups also has been established in the Vietnamese community of startups to share, exchange experience and discuss in the field of entrepreneurship which stimulate the spirit of startups in the young generation. Also, recently, Vietnamese government is trying best to develop a functioning national innovation system and support in building the ecosystem of startups such as the Vietnam Silicon Valley- the project seeks to create an ecosystem of innovations and technology commercialization in Vietnam. Without any doubt, it has never been seen a time of highly entrepreneurial spirit in the startup ecosystem in Vietnam.

Along with the trend of startups, Vietnam government also has an ambitious goal to become a start-up nation in 2020 as a part of a “National Program to Support an Innovative Startup Ecosystem in Vietnam by 2025” in Project 844 by the government with the target, said Deputy Prime Minister Vuong Dinh Hue, is to have "one million start-up companies by 2020". A series of policies and measures have been introduced to encourage startups and innovation and build a constructive and business-serving Government (Business.gov.vn 2016).

- Performance/achievement of Vietnamese startups recently.

It can be said that start-up has been a prevailing phrase in recent years as never before had millions of young Vietnamese been so enthusiastic in entrepreneurship and start their own business. Notably, in fact the startup community in Vietnam has achieved plenty of success in domestic market and also being recognized in the world.

Most of entrepreneurships are technological