Tet in Vietnam

Hanoi is currently shut down; countless stores are closed, it’s hard to find a meal in town (in certain areas), and at times, the city almost feels as if it is under curfew. However, Hanoi is not the only city that is experiencing these conditions–across the entire country, Vietnamese are currently in the middle of celebrating Tet, which marks the transition from the Year of the Horse to the Year of the Goat. This year, the Tet holiday (Tet Nguyen Dan) is officially observed from February 15 to February 23, but the New Year’s Day is on February 19.

To foreigners, Tet is New Year’s, Christmas, and Thanksgiving all rolled into one extended holiday. It is based on the same lunar calendar that other Asian cultures, such as the Chinese, Korean, and Japanese, subscribe to. Indeed, it can be difficult to celebrate Tet as an expat or tourist unless there are existing familial or close friendly ties with people here. For Vietnamese, the holiday is a time to remember ancestors and a time to spend with young and old family members alike. During Tet, people look back on the old year and look forward to the new year. Overall, people wish each other health, happiness, and success; and hand out lucky money to children and old people. For many Vietnamese, Tet is the only vacation that they will have the entire year, which is the main reason why there are so many pilgrimages to respective hometowns (where they gather with the rest of the family to have meals together).

To historians (and some Americans), hearing the holiday’s name may remind them of the Tet Offensive, which took ARVN and American forces by surprise in 1968 during the Second Indochina War when, before going into battle, General Vo Nguyen Giap ordered the forces under his command to “Crack the Sky, Shake the Earth.” As with many national holidays, Vietnam’s flag is flown from almost every home and business, reflecting the deep nationalism and patriotism that permeates every facet of Vietnamese society. In this sense, tradition, national sovereignty, and history are all intertwined in the celebration of the Tet Nguyen Dan holiday in Vietnam.

Preparing for Tet

In the days leading up to New Year’s Eve (February 18) there are a number of preparations that must be carried out for every family. These duties range from cleaning to paying off debts to stocking up for food to celebrate the holiday during “hibernation.” There are a number of fairs that pop up throughout the country, which allow Vietnamese to shop for essentials and new items to bring in the new year. All kinds of rooms, transportation, and everything else travel-related is nearly fully booked weeks in advance. Even getting a taxi in the days before Tet becomes a challenge (and the experience reminded your author of trying to get a taxi in San Francisco before Uber and Lyft were available) and makes running simple errands take even longer than usual. Traditionally, a family must clean their home (and vehicles) and prepare Tet food—some of which can take hours to make (like banh chung). However, in recent years the widespread availability of Tet foods at local markets have allowed some families to transition away from preparing Tet foods themselves.

But really, preparation for Tet begins weeks before—perhaps even as far back as the western New Year. There’s a festive attitude and laid back mindset that seems to swallow Vietnam entirely; it is a distinct “post-Tet” and “pre-Tet” atmosphere that affects everything from meetings to schedules to business deals. As early as January people are already looking forward to Tet and many business activities will be pushed into next (lunar) year. Thus, the focus around this time before Tet is on end-of-the-year parties for workers, which begin shortly after a workday and continue late into the night (as allowed by local ordinances).

That’s not to say that Tet isn’t a busy time—it is, just from a personal orientation (and relationship—but that too can blur the line between personal and professional) rather than a professional orientation. Everyone is rushing around to wrap up last minute items and to get everything ready for Tet and the subsequent shutdown. Flowers are everywhere; in the north, orange kumquat trees are preferred, while in the south yellow flowers are associated with Tet. Interestingly enough, a week before the Tet holiday, the kitchen gods must be appeased (by releasing fish) so that a family will have a good report for the Jade Emperor; this year even US Ambassador Ted Osius and his family joined in the festivities to release fish into Hoan Kiem lake.

All over town, “Mung Dang, Mung Xuan” banners are seen in various shapes and forms; it means, “greet the party, greet the spring.” Here, spring is the first three months of the year, the first season of the year, and the new start as well as the start of prosperity for the new year. (During this time, prisoners who are eligible for good behavior are released so that they too can spend the new year with their families and to have a “new start.”)

Then, starting on the day before New Year’s Eve most shops close their doors for at least several days. There is an eerie sense of calm in usually busy areas of the city and the few motorbikes and cars on the road are sparkling clean. Daily trash pickup occur earlier than expected to accommodate the vigorous spring cleaning and the Tet fairs have all shut down, replaced by flower sellers. The first day of the new year is on the horizon.

Tet Arrives

The last meal of the year is one of the most important because it brings family, the ultimate glue of Vietnamese society, together: banh chung, the traditional Tet cake, is the most widely known Tet food but there are several other side dishes that are only prepared for Tet. If Hanoians don’t stay at home to bring in the new year with family then they go to Hoan Kiem lake (also known as Ho Guom) to see the fireworks. Another popular gathering point is My Dinh stadium, which was built several years ago as part of a sports initiative for the New Tu Liem District and where we celebrated the new year.

Vietnamese began assembling around My Dinh stadium early in the night so as midnight approached the area was full of motorbikes and cars. As the fireworks began shortly after midnight almost everyone took out their smartphones and began recording the illuminating display overhead. Those who weren’t transfixed by the fireworks were riding (at times, driving so fast that they appeared to fly) their motorcycles between the improvised lanes of spectators. Some riders honked loudly while others waved Vietnam’s flag behind them, procession style. About twenty minutes later, when the fireworks had ended, a mass exodus began and the entire area transformed into a frenzied parking lot. It is considered good luck and tradition to bring home a tree branch so several were on sale on the side of a few roads leading away from My Dinh stadium–there were also envelopes for lucky money as well as giant red balloons which had the traditional new year greeting, Chuc Mung Nam Moi (Happy New Year!), on them. Some children who were riding on the back of motorbikes wished those around them a “Happy New Year” as their parents looked on approvingly.

Superstitions dictate many activities in Vietnam so it is important to pay respect to spirits, especially ancestral ones. Some Vietnamese rush to the pagodas in the early hours of the new year in order to be the first to pay respect to ancestors, spirits, ghosts, and other otherworldly elements. For those who can wait until daylight, the pagoda is perhaps even more crowded than shortly after midnight. For us, we started the new year off with a bottle of Hanoi beer and then proceeded to go home to rest after a long and enlightening night.

The first official visitor of the new year at a house needs to be good (character, esteem, success, etc.) in order to bring the family good luck for the rest of the year. Tet is celebrated in a series of days: traditionally, the first day is for the father’s family, the second day is for the mother’s family and the third day is for teachers. Lucky money, “li xi,” is presented to older family members as a sign of respect—as well as to younger children (up to around 21, in some cases). $2 bills are given out to children (with particular attention paid to the serial numbers or other significant numbers) and all money must be in crisp, new condition. The numbers two, six, and eight are particularly auspicious numbers in Vietnam.

The Effects of Tet

Tet is a deeply family-oriented and nationwide experience. Any manager must be aware of the impact that Tet has on the country during the actual holiday but also for the schedules that it may impact. Business will mostly return to normal within 15 days after Tet but in reality the economic climate is affected for five or six weeks before and after Tet. For example, to some, it is considered bad luck to do real estate transactions in the first lunar month (until March 19). A few years ago, many stores and shops used to be closed. But now there are places that remain open for tourists and expats. Many workers look forward to the Tet bonus or “13th month salary” (and some workers even plan job changes around it) which can drive up the costs for a company–or negatively impact morale if the Tet bonus is not aligned with workers’ expectations.

Tet has its origins in the old agrarian society in Vietnam—it gave workers a chance to rest before doing hard work on the fields. However, as Vietnam has shifted to a service oriented economy, some have called to get rid of or shorten Tet because of productivity and other economic losses. Sometimes, there are some negative elements that are associated with the holiday season. For example, criminal activity can sometimes increase shortly before Tet as a result of people trying to pay off their debts. However, the real danger during Tet is the drunken driving and traffic accidents. One reason is lack of experience: people rent cars to drive to their hometowns and do not really have experience or skills to drive larger vehicles (since most of the time they are driving motorbikes).

However, good food, which is only cooked at this time of the year, can lift the spirits of everyone—-although if you are a foreigner, finding a meal can be a challenge with the exception of chains and larger retailers. But basically, it is the few days per year when everyone is nice to each other (or so we have been told by locals). Most expats leave during the holiday, but Tet in Vietnam is something that you should try to experience for yourself. The bottom is line is: do not underestimate Tet, its significance, or the impact it has on plans and travel—the impact on business here is real. But do not worry–soon, the hustle and bustle will be back, the deals and money will start flowing again, and things will be back to normal (for better or for worse).

We wish you and your family a happy, healthy, and prosperous Year of the Goat–Chuc Mung Nam Moi!

Phonsavan, Xiengkhouang Province

Phonsavan is the capital of Xiengkhouang Province, arguably the most heavily bombed area of the most heavily bombed country (per capita), Laos, in the world. Phonsavan itself is a relatively new city—the old capital Muang Khoun, about 30 kilometers south of Phonsavan, was largely affected by the Second Indochina War (Vietnam War). In fact, the old capital was so damaged by the bombing that many of the original stupas were destroyed.

Besides these and other artifacts of war (e.g., a crumbling French hospital), the surrounding landscape here is quiet and peaceful; the sun pierces through limited cloud formations to form stunning arrays of light and long stretches of crisp blue sky seem to hang overhead indefinitely. At night stars and other space objects are clearly visible to the naked eye—a rare sight coming from hazy and smoggy Hanoi.

The main strip of Phonsavan has the distinct feel of an Old West town, especially with the backdrop of nearby rolling hills. At times, “Montana” comes to mind, however this thought is quickly squeezed out of mind when the surprising amount of Vietnamese and Chinese signage comes into focus. Throughout Phonsavan there is a healthy mix of Chinese and Vietnamese nationals; the Vietnamese influence is most visible in the form of late night pho restaurants and neon red lit massage parlors (tam quat) dotted on the main strip.

Passing through Phonsavan, it’s easy to spot the Vietnamese—they drive more erratically (locals here drive recklessly enough when compared to Vientiane drivers but Vietnamese-driven buses were described to us as “torpedoes”), speak more loudly, and have more aggressive demeanors (work ethic and attitude) than the laid-back Lao locals. Your author stopped by a banh mi shop on the side of the road and asked one Vietnamese man who had been in Phonsavan for five months what he thought of Lao people; he held out his right hand, rubbed his fingers together with his thumb, and quickly shook his head while grimacing. Nothing more needed to be said.

Interacting with Locals

At a local club called Dok Mai Daeng (“red flower” in Lao) young Hmong people dance in relentless synchronization which eventually morphs into equal parts mosh pit and dance battle as the music picks up in tempo and the MC directs their abundant energy from center stage. Young men lift each other up and attempt to publicly determine who between them is taller, pausing every so often to forcefully crash and jump into young women on the dance floor—who equally seem to enjoy the rough contact. In between songs, all parties return to their respective tables or the young men find suitable partners to dance slowly to, depending on the next song. Interesting as it may be, this excited and loud scene is a far cry from the typical expat experience in Phonsavan.

The consistent westerner expat community in Phonsavan is fairly small with a majority of backpackers and tourists rounding out the western presence; the latter mostly in town to check out the mysterious Plain of Jars or using the town as a rest stop on the way to Luang Prabang. The Plain of Jars (PDJ according to the French abbreviation) is the main tourist attraction nearby, with a different feel from backpacker tubing in Vang Vieng or high-end resort tourism in Luang Prabang. Most nights, longterm expats can be found at Bamboozle, a restaurant run by a Scot named Mark, and perhaps the best place in town to find a quality meal. These “local” expats are almost certainly working for an NGO or doing volunteer work in town related to the continued effects of the bombing campaigns from decades ago.

Mines Advisory Group (MAG) is out in the field on a daily basis and there are a number of other NGOs (such as UXO Lao) that focus on Unexploded Ordnance (UXO), ranging from clearance to victim support assistance. The UXO sector in Laos (“mine action” in the official parlance) comprises three areas: clearance, mine risk education, and victim assistance. These services are badly needed here because an estimated 30% of the more than 270 million cluster submunitions dropped on Laos failed to explode. To put that figure in perspective, an average of one sortie (a roundtrip flight by one aircraft) was conducted every eight minutes for nine years (1964-1973).

Besides UXO, the biggest enemy these days could be boredom in Phonsavan, which can lead to heavy drinking for locals and expats alike in this rural area. Drinking is part of daily life in Lao PDR, and in Phonsanvan the national past time doesn’t divert too far away from its core. Runway Club, the largest nightclub in the area (and nestled in a bus depot), serves as another collection point in the “night life” funnel for the locals. Post-curfew, anyone who is still in the mood to continue the night reunites at one of several late night Vietnamese restaurants, which can also house snooker tables. As in much of Asia, driving is a hazard, but in Phonsavan the activity takes a higher form of danger—especially with drunken drivers careening down the main strip late at night and others making impromptu U-turns without advance warning. It’s interesting to note that at every location we went to in Phonsavan, we were either the only westerners in a venue or we were surrounded by fellow westerners, a highly segregated experience.

A Mix of History, Cultures, and Futures

A local official whom we spoke to at “Beer Party” Restaurant in Phonsavan described Lao culture as the following :

1. Having enough rice to eat;

2. Having a house to live in;

3. Having friends and relatives to come over and drink with; and

4. Having a partner to share life with.

However, this official also spoke about the foreign exchange of technical skills with Lao people, i.e., needing advanced knowledge from other places. This official was the second person out of six or seven who proceeded to come to our table to introduce themselves to us and speak with us in a mix of Lao, English, and Vietnamese (in that order). One constant throughout the entire experience was the warmth and hospitable nature of the Lao people—always smiling, always greeting, and always trying to help foreigners adjust to the local settings.

Even when the subject turned to the Secret War, and the massive bombing campaign carried out by the US government during the 1960s and 1970s, our counterparts seemed apologetic when referencing what had partly transpired where we were standing over 30 years ago. On this subject, we had an experience which ended up being the most sobering of all during the time we spent at this local eatery: one man, a chemistry teacher at a local teacher’s college, explained to us that his father had been killed by the bombing. It wasn’t clear whether his father was a civilian, Pathet Lao, or Royalist supporter, but this man was still visibly affected by events leading up to the revolution in 1975.

Chinese and Vietnamese influence in Xiengkhoang Province during that time took on a different form but presently, the Chinese focus on the commercial development projects while the Vietnamese focus on residential construction; these activities give one the distinct feeling of the area being carved up for neighborly consumption (or competition, depending on perspective). One 27-year-old Chinese national whom we spoke to at Desa Restaurant had been in Lao PDR for about a year; he had learned the language by spending time working in the chemicals sector.

Almost as soon as we had sat down at our own table, we were quickly invited to his table where he had been drinking with three other similarly aged Lao colleagues. Together, we shared several rounds of Beerlao and exchanged questions and answers about our respective backgrounds; at one point, one of the Lao men expressed his desire to visit the US in the future while the others nodded in unison. Our other discussion topics ranged from marriage to work to travel plans. Toward the end of our night, we toasted our newfound friendships with each other: three Lao nationals, two Americans, and one Chinese citizen sitting together in a local hangout in one of the most heavily bombed areas in the world.

Taking a Closer Look at the IPP

In our last post, we outlined the IPP, explained its goals, and touched upon some of the challenges ahead for the program’s stakeholders. This week we are going to take a deeper look at the IPP and the cultural, comparative, and collaborative challenges ahead for the program in Vietnam.

Last weekend we sat down with Chris Zobrist, the Senior Innovation Partnerships Expert at the IPP, and he shared his thoughts on operating in Vietnam, the potential for entrepreneurship and innovation on a local level, and how the IPP factors into the changing landscape in Vietnam.

  • Can you share a bit about yourself? What’s your background, your role in your organization, and where are you located?

CZ: I’m currently working as Senior Innovation Partnerships Expert for IPP, which is a joint program funded by the Foreign Ministry of Finland and the Ministry of Science and Technology of Vietnam.  My background is as both an entrepreneur, having started many businesses over the last 15 years, as well as an entrepreneurship educator, spending part of my time teaching entrepreneurship and developing curriculum in several universities in Vietnam.

  • What kind of opportunities do you see in Vietnam over the next five years?

CZ: Vietnam has a lot of talent, especially in engineering and software development, and there are already a few high-growth companies as well as local start-ups planting entrepreneurial seeds here.

  • What’s the best way to establish trust with Vietnamese business counterparts?

CZ: It depends a lot on the individual with whom you are trying to build a relationship, specifically in terms of their background.  Generally, the best way to get to know someone is through someone they already know and trust, as in many cultures, Vietnamese really value social capital, and this can be transferred from one person to another through a proper introduction.  Besides introductions, sharing meals, and drinking together are also good ways of building trusting relationships which is an essential element of working together.

  • What’s the biggest difference between American and Vietnamese mentalities?

CZ: Coming from a developed country that churns out high quality products as well as infrastructure (roads, public buildings, etc), Americans as well as people from other developed countries have a natural expectation to see and make things at a high standard of quality.  Vietnam is still a developing country, so many things are made with what little resources were available, and so the expectation for quality coming from domestically produced goods is not high.

  • What’s the hardest part about doing business in Vietnam?

CZ: Ensuring high quality standards.

  • Do you have a favorite quote?

CZ: “I’m all for progress, it’s change I object to.” – Mark Twain, I like this quote because it is the most apt description of the greatest challenge facing entrepreneurs and innovators in almost every context, and especially true in a country like Vietnam.

  • What are the biggest differences between Hanoi and Saigon in terms of doing business?

CZ: Saigonese are generally much more open to new people and ideas, as long as there’s a clear opportunity and logic in place.  Hanoians are much more conservative, so even if they are presented with an attractive opportunity, they will be reluctant to mobilize the needed resources to capitalize on it.

  • What are the necessary attributes to succeed in Vietnam?

CZ: Social networks and building trusting relationships are keys to success in Vietnam.

  • Do you have any advice for expats/locals who want to be entrepreneurs in Vietnam?

CZ: Entrepreneurship is a team effort, so if you want to be successful, you need to learn how to network and collaborate with others to get things done.

Entrepreneurship, Innovation, and the IPP

During our discussion, Mr. Zobrist made it clear that the IPP is looking for people who have the necessary motivation, connections, and capacity to scale a company globally. That means that local companies will eventually have to implement international accounting standards, utilize English as an official working language (especially if looking to raise funding from foreigner investors), and clearly communicate a company’s Unique Selling Proposition (USP) across markets and cultures (differentiation).

While it might sound challenging, what the IPP is seeking to achieve isn’t impossible because it’s already been done before in Japan. Mr. Zobrist pointed out that Japan went from a ravaged post-World War 2 economy to the world’s second largest economy in the 1990s. What enabled Japan to be successful in its economic transformation was a stark shift in the workforce mindset, which even facilitated new vocabulary to implement innovative solutions.

Before this paradigm shift in Japan, specific industry terms did not exist to describe small batch, high quality production to factory workers. The Japanese created their own processes with their own resources to drive economic growth in 20 years; Japanese engineers, managers, and leaders took innovative ideas, applied them to manufacturing and processes and the result was innovative products from brands such as SonyHonda, and Toyota. Thus, the development of a new technical language was necessary, which involved a social level (individuals, units, company culture, etc.) of change in innovation, and ultimately led to a change in output of manufacturing (lean manufacturing).

Vietnam currently has a similar language challenge ahead of it; for example, the terms doanh nhân and doanh nghiệp can mean “entrepreneur” or “businessman” and are used interchangeably (and sometimes ambiguously) in Vietnamese. Along those same lines, sáng tạo means “creation” while đổi mới means “renovation” so combining the two (sáng tạo đổi mới) is the closest meaning to “innovation” (literally “creative renovation”) in Vietnamese. The language will have to evolve in order to reflect the high standards and creative thinking that are necessary to maintain a competitive advantage in the global marketplace.

An ecosystem like Vietnam’s needs both entrepreneurship and innovation in order to foster the creation of high growth and innovative companies with a global outlook. If a company chooses to keep the status quo then it will stagnate, or worse, die. Copying existing models can be valuable, yes, but not nearly as valuable as new ideas that lead to the creation of value for a large number of customers or stakeholders. High growth companies are innovative and innovation requires change–there is no getting around this fact.

New language can shape new segments of a culture and creating new and/or dedicated Vietnamese words for entrepreneurship and innovation will allow the exchange of new ideas more efficiently and also help to facilitate a change in mindset–goals that the IPP hopes to realize once its integrated system is fully operational (good inputs producing good outputs).

The IPP seeks to perfect the way of building innovation systems in order to turn them loose and harness the innovative and entrepreneurial resources here in Vietnam. Then, the IPP can develop iteratively by building and expanding on foundational knowledge (training individuals and teams who can then train other individuals and teams and so on). In short, the IPP is building a Minimum Viable Product (MVP), learning from the outcomes, and making the necessary changes (quickly and fully) in order to make the process of creating high growth and innovative companies more effective and efficient in the future.

When the first phase of IPP finished at the end of 2012 there were some major lessons that were learned, leading to a promotion of transparency, accountability, and momentum for IPP Phase 2 (which began in January). This public-private partnership, comprised of a core curriculum and fellowship program, will eventually fully integrate entrepreneurship and innovation–but this process will require time, talent, and commitment at the individual, community, and governmental levels if it is to succeed in its mission.

Toward the end of our conversation, Mr. Zobrist pointed out that the IPP will have its final evaluation in 2018 but for now, the short term focus is on capacity building and making grants available to suitable applicants in this “wilderness stage.” However, the first significant indicators of progress could be as early as the end of this year or in early 2016 as the Fast Track training draws to a close and the New Innovative Companies are eligible for external funding on Demo Day.

With approximately 200 Expressions of Interests submitted to the IPP for New Innovative Companies, we look forward to seeing what kinds of teams are selected for the IPP–and more importantly, what kinds of teams, trends, and lessons emerge from the other side of the Fast Track Training.

Thanks to Chris Zobrist for sharing his time with us.

The Innovation Partnership Program

Can innovation and entrepreneurship be taught? Does Vietnam have the ability to produce innovative and high growth companies to take on global markets? Are there people here who have the time, talent, and commitment to make an impact in the Vietnamese ecosystem?

The governments, donors, and people behind the Innovation Partnership Program (IPP) certainly believe so and with good reason.

Well, what is the IPP?

According to the IPP website:

“Innovation Partnership Program (IPP) is an Official Development Assistance (ODA) program financed jointly by the Governments of Vietnam and Finland. IPP is in its second phase running through 2014-2018.

Working closely with key national and international partners the program aims to scale up innovation training in Vietnam and improve support mechanisms for new innovative companies targeting international markets. Besides providing seed funding and connections for the best teams in Vietnam, IPP builds the capacity of public and private stakeholders through entrepreneurship and innovation training programs.”

The IPP focuses on three different but related areas: developing people, developing companies, and developing the ecosystem.

The Fellowship Program will develop future business leaders and entrepreneurs in Vietnam who will then lead the Fast Track training for the New Innovative Companies.

The New Innovative Companies component will help high growth Vietnamese companies bring a product or service to the global marketplace via Fast Track training and expense reimbursement.

And finally, the IPP will work with Innovation System Development Teams by providing funding for organizations that will raise standards, develop new resources, and positively impact the entrepreneur ecosystem in Vietnam.

In short:

“IPP supports Vietnam’s overall goal of becoming an industrialized middle-income knowledge economy by the year 2020. The program objective is to boost sustainable economic growth in Vietnam through the increased production and export of innovative products and services.”

One can think of the IPP as a pilot program, leading the way for other actors in the local ecosystem to continue on and influence the course of Vietnam’s entrepreneur development from a global perspective. The IPP is currently in its second phase; the conceptual portion started in September and the implementation phase has been ongoing since December. The Fellowship program is scheduled to begin around April, 2015.

The Innovation Fellowship Program

The Fellowship Program will consist of 20 fellows who will be trained by top international and local talent. The fellows will focus on innovation entrepreneurship, and once trained (over the course of two months), they will lead the Fast Track Training (six months) for selected new innovative companies. Trainers from Silicon Valley and other startup communities will come to Vietnam and work with the 20 motivated young people.

In addition to the fellowship requirements, the fellows will be selected on the basis of two primary criteria:

  1. Can they learn how to be entrepreneurs and innovators?
  2. Can they take best practices from the fellowship program and teach others?

In other words, do they have the capacity and attitude to make an impact after graduating from the fellowship program?

The fellowship requires a 40 hour per week commitment and will consist of some classroom and about 80% field work. Fellows will spend most of their time figuring out what customers need and how to find/create value in fulfilling those needs. Each week, the fellows will cover a new framework and ultimately practice and reinforce the learned concepts by the end of the week. The fellows will each receive a $1,000 allowance per month for duration of the fellowship program; the goal is to focus and train a core group of people to have all the tools necessary to create successful companies in Vietnam.

The IPP is currently seeking two local trainers who, if selected, will receive two weeks of training at Stanford University in the US, in addition to a highly competitive salary for the two months of training.

New Innovative Companies

Innovation, high growth, global; these are the words used to describe the kind of companies that the IPP is looking to fund, and eventually, is looking to see created here on a consistent basis.

The New Innovative Companies to be selected will be held to milestones and operational requirements for the duration of the program. The IPP will restrict what funding is used for (which is intended to be used on salaries and training related to development) and will cover only up to 70% of total expenses incurred by the new innovative companies. If people within the new innovative company are being paid, or external consultants are used, then the fees and services must be directly related to business activities. Thus, the new innovative companies will need to show accounting records, show payroll stubs, and show that a bank transfer took place or that the fees were paid out accordingly.

Once new innovative companies are selected, they will be injected into the six-month Fast Track Program (led by the Innovation Fellows) which will culminate in a demo day with the hope that 20 or so investors will be present and ready to look at each new innovative company for potential investment. The IPP does not to take any equity share in exchange for funding (because ODA requires it). Also, there will be no corporate governance oversight by the IPP for the new innovative companies. However, the IPP will have the power to remove teams, whether it’s because of a violation or if it’s clear that a new innovative company won’t be ready to present a compelling final pitch when the fast track training is completed in December 2015 or January 2016.

Innovative System Development Team

Local or international companies that want to be involved in Vietnam’s entrepreneurship ecosystem transformation can opt to form a consortium and submit their plans for developing specific new parts or for enhancing existing parts.

According to the IPP website:

“IPP’s grants are for covering 70% of internal and external human resource costs related to the innovation project. The first phase grant is approx. €50,000 [approximately 1.2 billion VND]. The most successful teams can receive an additional grant of maximum €200,000 [approximately 4.8 billion VND].

The potential content of the projects may include, but are not limited to, development of a new incubator, creation of new services for existing incubators, planning of a new funding program in the province, adding startup services to existing technology park or initiating a regional cluster growth program.”

To that end, expansion and funding activities, and, most importantly, imagination will be critical to finding new ways to leverage the funding to provide new resources to aspiring and dedicated Vietnamese entrepreneurs.

What’s Ahead for the IPP

February 23 is the deadline to apply for the Fellowship Program, but there is no set deadline to submit an Expression of Interest for the New Innovative Company and Innovation System Developers portions. In the longterm, IPP seeks to train individual people—not just companies. The real value of IPP is in developing people–the human talent–and getting them to share their newfound knowledge with others. Building teams takes time, and even longer to reach the point of creating high-growth companies so things won’t change here overnight, but the program is a great opportunity to head in the right direction.

One huge part of the challenge ahead for all those involved with the IPP is creating a proper technical vocabulary in Vietnamese, and in the long term, a cultural shift for attitudes toward entrepreneurship and innovation within the training programs. While the IPP has a fund amount of approximately $10 million—and it will certainly go further in Vietnam than elsewhere in the west—it will be the people on the ground, in the training sessions, and taking risks to create something great who will show the world just what’s possible in Vietnam.