Sunday, 23 Jul 2017
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INVESTMENT

Government commitment for startups companion: prerequisite for success

Updated at Saturday, 08 Jul 2017, 17:17
The Hanoitimes - The Government ‘s commitment to facilitate and support start-up companies has fired off a wave of startup businesses. However, their success will not depend on commitments but concrete actions from all sides.
Specific commitment

The government has made start-ups a  priority for development. Beside legal modifications concerning investment, business and property of individual and organizations, many policies have been issued to foster startups.

The start-up orientation is shown through Resolution no. 35/NQ-CP concerning improving business environment, boosting up  startup and bolstering agricultural and hightech startup with a fund of 100 trillion VND or 4 billion dollars. At the recent forum between the government and enterprises  the government decided to conduct no more than one inspection per enterprise a year  to relieve stress for enterprises.

Many permits considered to be business barriers have been identified, evaluated and definitely removed. Activities deemed to be going against   the policies of the government to serve the people, time-consuming and costly to enterprises will be removed by the Government.
 
Enterprises introduced startup products at an exhibition in Hanoi
Enterprises introduced startup products at an exhibition in Hanoi
The business environment in Vietnam has been improved by 9  places in 2016 in comparison to that in 2015. The facilitating activities are receiving welcomes from enterprises and creating a firm foundation to raise the community’s trust in start-ups. This is also a way to narrow down the distance between the Government and the enterprise community, clearing away  any unrealistic and inappropriate decisions for enterprises. As a results, in 2016, there are approximately 110,000 start-up enterprises. In the first 5 months of 2017, the whole nation has an addition of newly established 50,534 businesses with an additional  registered capital of 485,634 billion VND or roughly 25  billion USD, a 13% increase in the number of enterprises and 39% increase in the registered fund in comparison to that of the same period in 2016.

Facilitating but not giving preferential treatment

However, the commitment to facilitate  enterprises to do business by the government  is a prerequisite for the time being. In the long run  this commitment can twist the market relationship as well as weakening the independence and creativity of enterprises. Even worse, enterprises may depend on the Government and embrace an attitude of awaiting  support from the outside.

Therefore, analysts said  the Government needs to clearly define the boundary for its support and avoids  intervening in  enterprises’ operation. A governmental support program or a long-term action plan for enterprises companion has to be worked out specifically  and in details, ensuring feasibility and broad effect for start-ups  in various fields. Such  plan  have to be made public  to gather public opinion for them  to have a deeper understanding on the enterprises demand and expectation.

At the same time, it is important, experts said,  for the government to continue creating a favorable  business environment toward transparency, fairness and consistency. The government’s effort in supporting enterprises have to be gradually turned into the internal motivation for each start-upand exerted  in accordance to the market law, avoiding abuse  of the government support .

Enterprises also need to make full use of  the operation network and consulting function from organizations and associations such as Vietnam Chamber of Commerce and Industry (VCCI), non-governmental organizations, forums, start-ups foundations, etc. in forming an enterprise community with sufficient confidence, knowledge, capability to overcome challenges toward success.  
Ngoc Thuy
Assoc.Prof.Dr. Nguyen Thuong Lang - National Economics University
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