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Vietnam's 'Silicon Valley' sparks startup boom

By Agence France-Presse in Ho Chi Minh City, Vietnam | China Daily | Updated: 2016-09-08 08:53

Much of the tech is locally produced for local consumers

Recent Vietnamese graduate looking for an English language teacher? There's an app for that. Or hunting the best bowl of pho in your Hanoi neighborhood? There's now an app for that, too.

A decade ago such technology would likely have been developed in California's Silicon Valley, but today those apps are being churned out by Vietnam's startup sector - an industry driven by local techies trained overseas but returning home to prowl for opportunities.

The sector's growth in a young tech-hungry nation has caught the eye of foreign firms - French President Francois Hollande on Wednesday leads a cohort of businessmen to meet tech investors in Ho Chi Minh City, the country's startup hub.

Much of the technology, which also includes popular mobile games and e-commerce software, is being produced for local consumers in Vietnam, where the median age is 30 and internet connectivity is rapidly expanding.

"The local market is large, young, fast growing, and not fully tapped," said Eddie Thai of 500 Startups, a venture with a $10 million pot - mostly of foreign cash - to splurge on tech enterprises for Vietnamese users or made by local developers.

US-born Thai, 31, whose parents fled during the Vietnam War, belongs to a vanguard of entrepreneurs who have arrived to offer expertise in the country, where Intel and Samsung already have a foothold in the hardware industry.

"I kept getting tugged by Vietnam, I saw that the opportunity to make an impact and make money doing it were bigger the sooner I came back," he said.

For Thai, the mathematics made the move a no-brainer: 90 million people, 45 million internet users, 30 million smartphone users and internet usage 10 times what it was a decade ago.

He arrived in 2012 to work for a corporate firm, and eventually joined 500 Startups, which has funded ventures including the language learning app Elsa and online ticketing platform Ticketbox.

Other apps developed in Vietnam include Lozi for food lovers and mobile bespoke tailor UKYS.

Cheap labor force

But much of the talent is also homegrown: Vietnamese teens rank ahead of peers in the United States, Britain and Sweden in maths and science, according to the latest survey from the Organization for Economic Cooperation and Development in 2012.

That educated labor force, which comes cheap compared with other countries, is helping to pique interest from tech heavyweights.

Comprehensive official figures are not available. But state media reported turnover in the software and IT services industry was $3 billion last year, from $2 billion in 2010, citing the Vietnam software and IT services association.

The government has also outlined its own strategy for the sector, and founded Vietnam Silicon Valley in 2013 to create an "ecosystem of innovations and technology commercialization".

But some observers say investors should be wary of the hype, warning of red tape and murky local laws.

"Vietnam has hidden tech potential, but it could take another five years maybe really to create these huge massive companies that have global influence," said Anh-Minh Do of Singapore-based Vertex Venture Holdings. "The law needs to be better, the government needs to be more supportive, there needs to be more interaction from Vietnamese-Americans, specifically Vietnamese-Californians because of the 'Valley' connection."

 Vietnam's 'Silicon Valley' sparks startup boom

French and Vietnamese employees of the French IT company Linkbynet in Ho Chi Minh City. A decade ago app technology would likely have been developed in California's Silicon Valley.Jenny Vaughan / AFP

 

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