It is little wonder that Việt Nam is attracting global attention as Asia’s next ‘tiger economy’. According to International Monetary Fund data, the country’s economy has grown at a compound annual rate of 5 per cent for more than a decade now – among the world’s fastest – and its GDP is thought to be just 11 years behind China. Poverty has plummeted and growth continues apace as Việt Nam starts to join the ranks of middle-income countries.
Yet this boom brings its own issues. International grants have naturally declined as Việt Nam’s fortunes have improved and rapid development has led to unsustainable (if not downright dangerous) business practices in several quarters. As for previous ‘tigers’, pollution is becoming a real concern.
As other high-growth countries have also found, tackling these problems while continuing to foster further economic growth is a huge challenge for Việt Nam. However, the country is pressing ahead in typically innovative fashion by harnessing the power of social enterprise in multiple ways – for the benefit of society, entrepreneurs and investors alike.
So, what is social enterprise?
In short, social enterprise is business where the commercial goal is united with a social or environmental mission. Profits are certainly made, but not just on the balance sheet, via initiatives that might include local craftspeople being a provided with a nationwide distribution and retail network for their handiwork, or the poor and out of work being re-trained to work in commercial food production or the hospitality sector.
As one can easily see from these examples, commercial strategies are applied to improve social, financial and environmental well-being at both the macro and micro levels. The Vietnamese authorities are certainly convinced of the merits of social enterprise – and their confidence has already been very well repaid.
Strong Government support has created one of the most progressive ecosystems for social enterprise in Southeast Asia and such businesses have even been given their own distinct legal form.
More than 1,000 social enterprises have sprung up in Việt Nam and most are thriving as registered companies. Dynamic, socially useful business, rather than charity, has been the focus.
And it will continue like this. The Vietnamese Government has ambitions of creating a vibrant ‘start-up nation’, with a million new enterprises being born by 2020.
Not only will this wave of entrepreneurship assist in sustaining Việt Nam’s growth, it will also help assuage high levels of youth unemployment, particularly among the well-educated, which saw 225,000 graduates out of work in 2016.
Việt Nam’s ascent may have been fuelled by countries like China offshoring manufacturing jobs here due lower wages; its continuation will call for home-grown talent and innovation to be nurtured.
And much is being done to foster both entrepreneurship and the social enterprise agenda.
The National Economics University (NEU) in Hà Nội last year launched its new Centre for Social Innovation and Entrepreneurship (CSIE). CSIE functions as a springboard for social enterprises, as well a research and education hub, which owes much to the support of the British Council.
The university, along with S&P Investments, is working on a new social enterprise investment fund which will provide a blueprint for how Việt Nam’s High Net Worth Individuals can unite their personal financial goals and their wishes for how they would like the country to progress.
Due for launch in June this year, the fund will not only help in the development of new social enterprise initiatives for young people, but it will also be designed to provide steady returns for investors too.
Social enterprises can often be great businesses delivering strong financial gains alongside wide-ranging benefits for society and the environment. As such, they refute the notion that doing well for oneself and doing good for one’s fellow man are mutually exclusive.
Exciting times lie ahead for the social enterprise sector in Việt Nam – and for our forthcoming fund – with such strong support from Government, academic and financial services quarters. Now all that is required is for investors themselves to add their might to the movement and ensure that their money is used to help build a brighter future for Việt Nam while they are building up security for themselves.
By Brian Spence
Read more at vietnamnews.
