Vietnam is ramping up as a destination for tech startups, with its stable political environment, increasingly tech savvy and educated public and growing tech startup ecosystem.But one major part of the equation is missing – a government that stays out of the way. And that could inhibit innovation and investment in the long run.
Indeed, the government has forced the shutdown of popular websites whose message it didn’t like, and provided no details on what specifically is allowed to be published online and what is not. Cumbersome government regulations also inhibit the digital economy. If those issues are not fixed, the country’s Internet economy may never see its true potential.
One major example happened last year, when the government forced the shutdown of a popular humor site that had 4 million Facebook followers. Since then online companies have kept their heads down, not wanting to grab the attention of officials who might not like their content.
On the plus side, there are an abundance of new startups, increasing Internet access and a 27 percent increase in demand for mobile phones from last year — the way most people go online in Vietnam — and a pool of highly educated talent. Internet access is expected to increase from 44 million people to 59 million people by 2019. And with a population of 92 million people, Vietnam ranks as the world’s no. 34 market.
But at the same time, Vietnam ranks no. 148 in global economic freedom and has many restrictive regulations regarding content, as well as bizarre regulations that stipulate, for example, that administrators posting content need to have a university diploma. There are recent signs that the government at least recognizes this problem – Tech in Asia noted in August that Vietnam’s deputy minister met with several prominent leaders in the country’s online economy — but change may take a while.
Could Vietnam become a leader in technology in Southeast Asia? Yes, but the government will have to back off a bit first.
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