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14 Feb 2023

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Vietnam Drawing Tech Startup Attention as Digital Economy Develops

Vietnam was identified as an “emerging giant in Asia Pacific” in a new report from KPMG. The country now has more than 3,000 startups as part of its digital economy, according to the report, almost double that of three years ago. A total of $2.6 billion has been placed in 233 private deals.

Ho Chi Minh City appears to be the primary area for this new wave of tech-related startup activity. The largest of the startups are focused on e-commerce, healthcare, crypto and fintech, real estate, HR, and education.

Southeast Asia has more than 700 million people and has been developing dynamic digital ecosystems for the past several years. The city-state of Singapore was the first nation in the region to emerge economically, as one of the “Asian Tigers” of the 80s. In recent years, there has been competition among the five other largest economies in the region – Indonesia, Malaysia, Thailand, the Philippines, and Vietnam – to vie with one another and vie with Singapore as the region's economic hub and leader.

EESG Score Leads Competitors
Vietnam has the highest overall score among the five competitors in the new IDCA EESG Digital Readiness of Nations Index. Its economy is vibrant. It has the most robust renewables grid in all of Southeast Asia and and a relatively dense server structure that leads its four big competitors.

Vietnam had previously developed a low-end industrial base for outsourcing, serving as an alternative to China, and has moved upstream in recent years. As a result its GHG emissions have risen steeply, and the country has an economic efficiency with its emissions that is less than half that of the US, even as it is more efficient that China.

Growing Population in a Diverse Region
Vietnam has a growing population that has now reached almost 100 million people. It is similar to the Philippines in population size, about half of Indonesia, and well ahead of Thailand and Malaysia. Its income level still remains low; IDCA Research classifies the country as a Frontier Market, the fourth of five income tiers among the 147 nations under survey.

The Communist Party has been in power in Vietnam sine 1975. The country's scores in the Social and Governance categories are middling, around the world average.

Southeast Asia region is highly diverse economically, with Singapore now classified in the top income tier as a Developed Economy, and other nations within the region falling into all of the four other tiers.

The KPMG report presents the dynamism found in recent years in Vietnam. But the spirited competition among the big nations of Southeast Asia will continue, as each of these nations has notable strengths along with areas that could be improved.

Photograph of Ho Chi Minh City.

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