Framing policies for startup development in universities in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY - NGUYEN PHUONG ANH FRAMING POLICIES FOR STARTUP DEVELOPMENT IN UNIVERSITIES IN VIETNAM MASTER'S THESIS Hanoi, 2018 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY NGUYEN PHUONG ANH FRAMING POLICIES FOR STARTUP DEVELOPMENT IN UNIVERSITIES IN VIETNAM MAJOR: PUBLIC POLICY SUPERVISORS: Professor Hiroichi Kawashima Professor Tomokazu Arita Associate Prof Dr Dao Thanh Truong Hanoi, 2018 ACKNOWLEDGEMENT As time goes by, years studying at Vietnam Japan University is a very memorable time in my life Here I was studied in a modern international and professional environment, with professors, lecturers who are extremely enthusiastic and dedicated to work Especially, month internship time in Japan brought to me much useful knowledge in public policy major and wonderful experiences about the life and culture of Japan that I still wished to have before Although the learning process faced many difficulties in balancing and arranging time between work and study, however, it can be said that the results received are worth with the effort made First and foremost, I would like to send my thanks to JICA, VJU and University of Tsukuba for giving me this amazing opportunity I would like to express my endless thanks and gratefulness to my supervisors, Professors Hiroichi Kawashima, Professor Tomokazu Arita, Associate Prof Dr Dao Thanh Truong, who always support my master study and research, for their patience, motivation, enthusiasm, and immense knowledge during my research process I would like to send my sincere thanks to the lecturers and staff members in the Master of Public Policy program for the kindly support and dedication in creating the best studying environment for students during last years I also acknowledge my thankfulness to universities, experts, and startups for spending their valuable time, kind assistance and support in participating in the interviews of my research Last but not least, my special thanks approve to my family and my office who always encouraged, supported and created the best conditions for me to study and complete this course i TABLE OF CONTENTS ACKNOWLEDGEMENT i LIST OF TABLES v LIST OF FIGURES vi CHAPTER 1: INTRODUCTION .1 1.1.Research background 1.2.Research purpose 1.3.Research question .4 1.4 Research scope 1.5.Research limitations 1.6 Structure and overview of the thesis CHAPTER 2: LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK 2.1 Startup 2.2 Startup ecosystem 2.3 Role of startup 2.3.1 Role of startup in general .9 2.3.2 Role of startup in university 12 2.4 Role of University in Startup ecosystem .13 2.5 Startups in universities 16 2.6 Some views on promoting startups for development in universities .19 2.7.Experiences from foreign countries in promoting startups in universities .23 2.8 Experiences from universities in the world 26 CHAPTER 3: STARTUP SITUATION IN VIETNAM 33 ii 3.1 Policies for startup promoting from Government 33 3.2 Policies to promote university startups 37 3.2.1 Policy to promote student-driven startups 37 3.2.2 Policy to promote faculty-driven startups 38 3.3 Startup ecosystem situation in Vietnam 39 CHAPTER 4: RESEARCH METHODOLOGY 45 4.1 Research methodology 45 4.2 Research process 46 4.3 In-depth interviews plan 47 CHAPTER 5: FINDINGS 50 5.1 Startup situation in universities .50 5.2 Difficulties startups often encountered 54 5.2.1 Comparison between startups in university and startups outside university 54 5.2.3 Difficulties that startups in universities usually meet 55 5.3 Startup support programs of universities .59 5.3.1 Departments in charge of startup support and promotion in universities 59 5.3.2 Activities to support and promote startup at universities .62 CHAPTER 6: RECOMMENDATIONS 76 6.1 Recommendations for National policy 76 6.1.1 Building effective policy system support for startups 76 6.1.2 Identify startup development as a national strategy .76 6.2 Recommendations for Universities 77 6.2.1 Promoting startup as an important part of general strategy 77 iii 6.2.2 Building startup support model and entrepreneurship education model 77 6.2.3 Policy facilitates the formation and development of spinoffs 78 6.2.4 Promoting university-industry collaboration 78 CHAPTER 7: CONCLUSION 79 REFERENCES 81 ANNEXES 86 iv LIST OF TABLES Page Table 2.1 Programs enhancing entrepreneurial efforts for commercializing technologies in university 19 Table 2.2 Characteristics of experiential programs of universities that have a highimpact entrepreneurial culture 21 Table 3.1 Startup policy development objectives integrated from Project 844 35 Table 3.2 Startup ecosystem of Vietnam 2017 41 Table 4.1 Interview plan 47 Table 5.1 Enterprises formed from universities 52 Table 5.2 Department in charge of startup support and promotion in universities 59 Table 5.3 Startup support programs from universities 63 Table 5.4 Comparison between the universities with good practice entrepreneurship education with the universities interviewed 75 v LIST OF FIGURES Page Figure 2.1 U.S Job growth at startups vs existing firms, 1977-2005 10 Figure 2.2 Ideal university ecosystem and resulting synergies 15 Figure 2.3 The university ecosystem turns into the ideal startup launch pad 16 Figure 2.4 Business model generation canvas in the lean launchpad courses 23 Figure 2.5 The University of Cambridge entrepreneurship journey map 28 Figure 3.1 A number of awareness raising and startup promoting activities in Vietnam 43 Figure 3.2 Number of startup deals & deal value 44 Figure 3.3 Startup deal volume in 2017 44 Figure 4.1 Research flow 46 vi CHAPTER 1: INTRODUCTION 1.1.Research background The world economy is experiencing a slow growth pace International Labor Organization ILO has indicated that the unemployment rate will increase in the coming years due to the slow growth of the world economy It is worth worrying that the unemployment rate of young people aged 15-24 will increase to even over 13% of 2014 (ILO, 2015) In this context, startup which is defined as companies applying “innovative technology and/or business models and having significant growth potential” (Monitor European Startup, 2017) as the key to solve the problem Many studies have shown that startups promotion is focused in many countries and is seen as a way to promote economic growth and job creation (Sobela, R S & King, K A, 2008) (Lee, S.M., Lim, S., Pathak, R.D et al., 2006) Many countries around the world have developed policies to promote the startup of young people, especially startups in universities (Spike Innovation, 2015) (Lee, S J & Lee, Y M, 2015) Startups have appeared in Vietnam since the last decade, but have really bloomed and received the attention of policymakers and universities just a few years ago The wave of startup has grown rapidly, covering all the fields and spreading across the country 2016 was selected as the year of startup in Vietnam Vietnam has developed a number of policies to facilitate the development of startups Typical policies mentioned are Decision No.844/QD-TTg dated 18 May 2016 by the Prime Minister approving the project “Supporting the National Startup ecosystem up to 2025”, Decision No.1665/QĐ-TTg dated 30/10/2017 of the Prime Minister approving the Scheme on “Supporting pupils and students to start their business up to 2025” The Small and Medium Enterprise Support Law passed in 2017 together with the accompanying circulars are forming the legal corridor for startups Although the role of the university in the startup ecosystem has been confirmed to be very important and necessary, there has not been any study of policies for developing startups in universities in Vietnam The situation of the startups as well as the number of startups in universities, is not included in any the materials This research aims to understand the startup situation as well as startup support activities at a number of universities in Vietnam, thereby developing policy recommendations for startup promotion in the university in Vietnam Studies on startups in universities There have many researches on startup in universities of authors from many different countries: Research “What policy approaches are needed to improve startup education in university” of authors Sin-Jeong Lee and Young-Min Lee confirms the important role of startup education as the plan to activate a foundation for the young Therefore, the research gives some direction of startup education programs in Korean universities (Lee, S J & Lee, Y M, 2015) Universities must focus more on the startup education program, focusing on the student business, connecting with the society, giving students more startup opportunities and pay attention to the opportunity to practice of the student This view is summarized by Hong and his colleagues in the article “Entrepreneurship Quality of College Students Related to Entrepreneurial Education” Accordingly, he affirms the quality of the student's startup in relation to the startup education program, as it enriches entrepreneurial knowledge and develops entrepreneurial skills for students (Hong, Z., Hong, T., Cui, Z., & Luzhuang, W., 2012) Rae and Ruth Woodier-Harris (2013) in “How Does Enterprise and Entrepreneurship education influence postgraduate students’ career intentions in the New Era economy?” also state that it is important to develop a comprehensive startup program for students to promote the entrepreneurial spirit, to provide the knowledge and skills and create a startup environment to support students to realize features not yet specific and prominent Therefore, it is necessary to develop a separate plan, focusing resources to promote startup development In addition, the government should consider and soon establish a state agency responsible for overseeing startup programs and activities, avoiding the spread of resources in many places, resulting in inefficient and poorly focused supports 6.2 Recommendations for Universities 6.2.1 Promoting startup as an important part of general strategy Universities need to recognize the promotion of startup development, creating anentrepreuneurship environment as a key objective in their development strategy These objectives need to be clearly defined, with specific indicators (eg business motivation, conceptualization, business attitude, building capacity and business skills; support startups, commercialization of research results through technology transfer and startups, generate revenue for research institutes from spin-offs, and strengthen collaboration between academia and local business) 6.2.2 Building startup support model and entrepreneurship education model Most of the universities in Vietnam are currently implementing discrete, unstructured startup programs and activities that not have the strategy and the overall model, this makes the support activities not yet effective and quality Universities should soon set up a model, a startup support system so that support programs are implemented in a harmonized, non-overlapping manner, while ensuring the achievement of common goals in the overall strategy as well as exploiting the potential and resources in the universities The Lean Startup theory and the Launch Pad course model should be considered for applying in universities in Vietnam This model can overcome the limitations that startup training programs in Vietnam are experiencing for a number of reasons: - The course offers many opportunities for practice and encourages action 77 - Inspire student action and self-discovery entrepreneurship Students are inspired to act and discover entrepreneurship for themselves 6.2.3 Policy facilitates the formation and development of spinoffs Universities should develop mechanisms and policies that promote the formation and development of university-driven startups (spinoffs) through detailed regulations on ownership rates, principles of royalty, using facilities, people in accordance with the principle that maximizes the spinoffs business exists and grows: - The ownership of the university is small so that spinoff becomes more attractive to investors, as well as create more startup motivation for scientists - Charges, in particular licensing fees, are recognized but will be reimbursed when the business is profitable - University support with spinoff is limited in time, and after the support period, spinoff must be fully charged with the university Universities typically divest to make spinoff grow stronger with new investors, as well as return on investment and profits (if any), or simply create support space for the other spinoffs 6.2.4 Promoting university-industry collaboration Promoting university-industry collaboration will help the university to come closer to the needs of market to improve curricula, research content, which makes research results have high opportunities to be commercialized In addition, successful businesses are also potential guest speakers, mentors; effective persuasive trainers for start-ups in the university 78 CHAPTER 7: CONCLUSION Startups which have an undeniable role in creating jobs and promoting economic growth are becoming a matter of concern in many countries around the world A university is known as an entity that is able to connect many resources in society such as government, businesses, investors, international organizations, etc By leveraging their resources, universities can become the launch pad for successful startups.Currently, legal framework for startup in Vietnam is in the stage of formation, so the policies support for startup are still not specific, especially the mechanism to support startup development in universities Research results in scope of universities show that startup activities in Vietnamese universities are quite vibrant, with the majority of student-startups Very low faculty-driven startup rates can be explained by the fact that the current policy mechanism does not encourage spinoff development, especially because institutions have not built the appropriate policies on business ownership ratio incentive researchers In addition, the startup support activities at universities are still fragmentary, so the efficiency is not high Some suggested solutions are the government should identify startup support as an important target in its national development strategy and spend adequate resources to it It is necessary to soon complete the legal corridor for startups to attract investment from abroad and make Vietnam to become a potential destination for startups development For universities, the role of startup development should be well understood and given in the development strategy as an important mission Depending on their own conditions and characteristics, universities should build an appropriate model and plan for startup development as well as entrepreneurship education Lean Startup concept which is applied successfully in many universities in the world is a good model to consider applying in universities in vietnam Promoting universityindustry collaboration will improve the quality of education, orient the content of research, which makes research results closer to reality and highly applicable 79 Further study Due to limited time and resources, this research is only available in universities, so the results only represent a small group of universities in Vietnam Research on a broader scale, over a longer period of time, will give a more comprehensive view of the startups situation in universities, from which the solutions will be more clearly defined 80 REFERENCES (n.d.) 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Retrieved from https://www.apple.com/job-creation/ 85 ANNEXES INTERVIEW QUESTIONS FOR UNIVERSITIES (Department in charge of start support ) Ask about basic information, name, age, years of activity in the education sector at university / business? How many startups are there at your university? How you assess the effectiveness of startups at your university? How does the university support or encouragestartups development? Which policies are considered effective and which policies are not effective? In your opinion, startups development at your university is meeting the expectations of the university? In the future, what policies will your university build to promote start-ups in the university? INTERVIEW QUESTIONS FOR EXPERTS How you assess the policies that encourage and support development startups in the university today? Do these policies really help and motivate startups? What are the conditions for start-up policies effectively implement? Which are theoretical basis that policies for startups in universities now based on? What is the barriers to startups development in universities? What is your expectation in policies for startups development? 86 INTERVIEW QUESTIONS FOR STARTUPS IN UNIVERSITIES General information about the startups (Name of the company / project, area, activity duration, number of employees, mobilized capital, highlights of the enterprise) Could you please list achievements of your start-up business that you think is the most successful? Could you please describe the difficulties you have had in startup process? (list the most difficulties) During your startup process, what supports did you receive from the university? How you assess these supports? Which support is most effective? If you evaluate and rate the supports in terms of their effectiveness from the highest to the lowest, how are these supports arranged? Is there any activity, support program from the university that you think is not effective? If so, in your opinion why? What difficulties did you face in the start-up process but the university didn’t have any programs or activities to support? What kind of support you want to receive in establishing and developing startups? 87 INTERVIEW QUESTIONS FOR STARTUPS OUTSIDE UNIVERSITIES General information about the startups (Name of the company / project, area, activity duration, number of employees, mobilized capital, highlights of the enterprise) Could you please list achievements of your start-up business that you think is the most successful? Could you please describe the difficulties you have had in startup process? (list the most difficulties) During your startup, what kind of support did you receive from individuals and organizations? How to know and access to these supports? In these support, which support is most effective? If we evaluate and rate the supports in terms of their effectiveness from highest to lowest, how are these supports arranged? Is there any current support program that you think is not effective? If so, in your opinion why not? In the process of starting a business, what difficulties did you have but no programs or activities support? How did you overcome this difficulty? What kind of support you want to receive in establishing and developing startups? 88 INFORMATION OF INTERVIEWEES AT UNIVERSITIES University Departments in charge of startups Interviewee support in universities Hanoi University Hanoi Technology Investment and of Science and Technology Development Joint Technology Stock Company (BK Holdings) Vietnam Center for job consulting and National student support (CJCSS) Head, BK-Holdings Incubator Manager, CJCSS University of Agriculture University Student Support Center (SSC) Director, SSC - Ho Chi Minh Communist Youth Head of Specialized Economics Union Committee - Member of University - Center for social innovation and Youth Union Standing entrepreneurship (CSIE) Committee; Incubation Languages & International Studies National Manager of CSIE Vietnam University of No department in charge of startup Team leader of startup support research group FTU Innovation and Incubator Deputy director of the Space (FIIS) FIIS Commerce Foreign Trade University 89 CODING STARTUPS IN UNIVERSITIES No Startups (brief description) University Code Automatic mushroom growing system VNUA ST1 Large capacity luminaires for ships HUST ST2 Technology solutions, equipment serving in agriculture VNUA ST3 H'mong chicken farm VNUA ST4 Application for job search on the phone NEU ST5 Phone application to enhance the motorbike user HUST ST6 FTU ST7 experience Educational games for children on the phone (sex education) Model of educational entertainment experience weekend FTU ST8 Model of entertainment, education on the bus for children FTU ST9 10 Business NEU ST10 HUST ST11 VUC ST12 model provides bonsai for companies, organizations 11 Smart helmet 12 Model of food catering for schools, hospitals, companies,… 13 Model of uniforms sewing NEU ST13 14 Equipment for Smart Homes HUST ST14 15 High quality province bus service model VUC ST15 90 CODING STARTUPS OUTSIDE UNIVERSITIES No Startup (brief description) Application for the most suitable Gym finding on mobile Code SO1 phone Virtual Reality Book for children SO2 Safe vegetable sprout production SO3 Smart shopping application SO4 Clean agricultural product distribution model SO5 91 ... situation of policies for startups development in universities in Vietnam? - How universities support startup development? - What difficulties have startups in universities met in startup process?... been any study of policies for developing startups in universities in Vietnam The situation of the startups as well as the number of startups in universities, is not included in any the materials... successfully startups development in universities Chapter 3: Startup situation in Vietnam - presents policies for startups promoting as well as the startup ecosystem situation in Vietnam Chapter