November 06, 2025 | 16:05

Challenges for Vietnam's innovative startup ecosystem

Bùi Văn Thành

Vietnam's startup environment tends to develop steadily, but challenges remain in terms of legal corridors, venture capital scale and the rate of innovative startups...

According to the Global Startup Ecosystem Index (GSEI) rankings published by StartupBlink in 2025, Vietnam ranks 55th globally, up one place from 2024, and maintains its 5th position in Southeast Asia.

This marks the third consecutive year of improvement, indicating that the domestic startup environment is gradually being strengthened in terms of institutions, resources, and support networks.

The structure of Vietnam's startup ecosystem is characterized by three key features: a young and dynamic workforce, a diverse startup support system, and the active coordinating role of the government. However, three main limitations persist: unclear legal frameworks, small domestic venture capital scale, and limited innovation infrastructure.

The number of innovative startups accounts for about 0.4% of the total 940,000 active enterprises, with only about 0.4 startups per 10,000 people. To date, only two innovative startups have been valued at $2-3 billion. Venture capital investment in Vietnam has been declining since 2021 (peaking at around $1.4 billion), with recent years seeing only $500-600 million. 

The establishment and operation of the Creative Startup Investment Fund are currently governed by Decree 38/2018/ND-CP, which details investment for small and medium-sized innovative startups.

To better understand Vietnam's position as a startup nation, it is useful to compare it with three exemplary countries: Singapore, South Korea, and Israel, each representing different models of startup nation development.

To build a creative startup nation, Vietnam needs to have mechanisms and policies to promote the spirit of innovation throughout society, identify the greatest resource in building a creative startup nation not through land and natural resources but the intelligence of Vietnamese people, accelerate startups and invest in AI infrastructure, develop co-investment mechanisms, develop human resources and creative startup visas, and establish a set of KPIs on the number of startups, mobilized capital, patents, and R&D jobs.

To foster private sector innovative startups, especially small and medium-sized ones, it is necessary to supplement, develop, and unify the concepts of "innovative startup," "startup nation," and "innovative startup enterprise," along with appropriate institutions and policies for these models in the new development context.

To promote the construction of a startup nation, it is also necessary to summarize and evaluate the situation and results of implementing these legal documents, to apply them to innovative startup entities in general and to the startup nation.

Attention
The original article is written and published on VnEconomy in Vietnamese, then translated into English by Askonomy – an AI platform developed by Vietnam Economic Times/VnEconomy – and published on En-VnEconomy. To read the full article, please use the Google Translate tool below to translate the content into your preferred language.
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