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.
“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:
- Can they learn how to be entrepreneurs and innovators?
- 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.