Will Vingroup create the ‘Red River miracle’?

Some experts have compared Vietnam’s Vingroup with South Korea’s Samsung. Both started in the food sector and shifted to develop technology.

Big thinking

In summer 2018, when Yale Professor Vu Ha Van and his family spent their holiday in Da Nang, he received a call from Vingroup’s chair Pham Nhat Vuong who asked for a meeting.

Will Vingroup create the ‘Red River miracle’?

Prof Vu Ha Van of Yale University

“I told Van what I was striving for and I talked about the plan to become a technology group, then I raised a question “Will you dare do it?”. In reply, Van said “Go!”

Some months later, Vingroup declared its plan to become a technology-industry-service group and appointed Van to the post of Science Director of Vingroup’s Big Data Institute.

“Vuong wants to build Vingroup into a technology conglomerate. Moreover, he wants Vietnam to become stronger in science and technology development,” Van said. “In the current circumstances, this will be the quickest way for Vietnam to develop more rapidly and people can obtain higher income.”

Some months later, Vingroup declared its plan to become a technology-industry-service group and appointed Van to the post of Science Director of Vingroup’s Big Data Institute.

Vuong, as usual, ‘thinks big’ and ‘does quickly’.

“I talked to Vuong about the idea of establishing Big Data Institute two months ago and the license to establish the institute was granted two weeks ago,” Van told the press in August 2018.

Vuong has also developed a center for research, development and application of high technologies – VinTech City – based on a Silicon Valley model, and set up an investment fund to pour capital into technology firms to seek opportunities for developing technology projects.

 

Vietnam’s Samsung

Channel NewsAsia (CNA) in Singapore likened Vingroup to Samsung. The Vietnamese and South Korean groups have similarities in their development path and they both have powerful capability to develop.

Samsung has Samsung Town, while VIngroup has VinTech City. Samsung has NEXT fund, and Vingroup also has its own fund to seek cooperation opportunities. And it is highly possible that Vingroup, in cooperation with other Vietnamese groups, would become a ‘Red River miracle’, like Samsung and its partners, which created the ‘Miracle of the Han River’.

The government of Vietnam offers big preferences in tax, land and capital access to technology firms, especially startups, showing its strong determination to develop science and technology.

In 2019, the government plans to approve the national project on digital transformation, paving the way for the development of startups. For startups, the government has a plan to support the national startup ecosystem and establish innovation centers.

Tri Thuc Tre commented that the ‘weapon’ Vuong is using to implement his strategy and attract talent is not money, but an ecosystem for them to show their talent.

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