Statistics reveal a harsh reality for Vietnamese startups: after five years, only 10% survive, and just 3% are considered truly successful. Around 30% collapse within the first two years, while 60% remain in operation but in a fragile “half-dead, half-alive” state after three to four years.

At the thematic dialogue “Startups - Innovation” during the Vietnam Private Sector Forum (VPSF) 2025 on August 15, Dr. Nguyen Huu Xuyen, Deputy Director of the Institute for Science and Technology Strategy and Policy, said Vietnam currently has nearly 1 million enterprises and about 5 million business households. The country aims to have 2 million enterprises by 2030 and 3 million by 2045.

However, he admitted that only about 10% of startups survive five years, with just 3% thriving. “Previously, agriculture lifted people out of poverty, then industry made Vietnam a lower middle-income country. In the future, science, technology, innovation, and digital transformation will be the pillars to escape the middle-income trap and become a high-income nation by 2045,” Xuyen emphasized.

Technology startups face major hurdles

Nguyen Xuan Luc, Vice Chairman of WATA Technology JSC, noted that digital transformation demand is rapidly rising among private companies and state agencies. Technologies such as artificial intelligence, cloud computing, and IoT are expanding with decreasing costs. Yet challenges remain: a shortage of skilled workers, limited R&D capital, and client reluctance to adapt.

“The biggest challenge is fierce competition with foreign companies while technology evolves quickly, forcing continuous adaptation,” Luc said. Still, opportunities are abundant in digital markets for manufacturing, healthcare, education, and services, boosted by government support from Resolutions 57 and 68.

He added that WATA has benefited from these policies, receiving tax incentives, access to infrastructure, preferential loans for R&D, and partnerships with universities and research institutes. Luc recommended simplifying procedures for recognizing science and technology enterprises, shortening approval timelines, aligning digital workforce training with business needs, and creating real-world testbeds for new technologies.

He stressed that businesses themselves must be proactive: investing in R&D early, even on a small scale, and using customer and project data as valuable assets to refine products and strengthen competitiveness.

Policy framework strengthens support for startups

Pham Thi Bich Hue, Vice Chairwoman of the Vietnam Young Entrepreneurs Association and head of VPSF 2025’s organizing committee, highlighted Resolution 57 on scientific and technological breakthroughs and Resolution 68 on private sector development as political guarantees and guiding frameworks for young entrepreneurs.

She said the upcoming National Innovation Startup Program will formalize these policies, providing legal, financial, and collaborative frameworks to bring ideas from laboratories to markets. “This will pave the way for Vietnam to become an innovation-driven nation by 2045,” Hue affirmed.

Tam An