In July, the US Treasury Secretary Janet Yellen, in her first official visit to Vietnam, picked an electric scooter production factory located in Gia Lam district of Hanoi, as her field trip destination. The factory was owned by a Vietnamese startup, Selex Motors, who has been developing the supply chain ecosystem from manufacturing electric scooters, batteries, and battery swapping stations to a smart management platform.

Juhern Kim, Country representative in Vietnam, Global Green Growth Institute

The startup received $8.1 million in investments from global investors, according to TechinAsia. This was in the context of the Vietnam government’s forward-looking commitment to the green energy transition and emission reduction in the transport sector, which also included a roadmap to phase-out of internal combustion engine cars in the country by 2040 to achieve zero emissions in this sector by 2050.

The net-zero transition is happening in Vietnam, backed up by the government’s commitment, and geared up by entrepreneurship, global climate tech transfer, and investments.

Efforts towards a net-zero transition and sustainable development are required, not only for the transport sector but across the whole economy. Ongoing technology revolutions include advanced batteries, hydrogen electrolysis, and direct carbon capture, utilisation and storage, which can greatly contribute to CO2 emissions reductions between 2030 and 2050.

As businesses are increasingly committed towards emission reduction, beyond research and development, it is crucial to enable the application of climate technologies via commercialisation. To reach that stage, innovation will be key throughout the iterating process of technology testing, adjustment, and scaling-up while creating a robust supply chain ecosystem.

This is where innovative entrepreneurship can be an important piece of the puzzle and step in as the much-needed disruption to accelerate green technologies across sectors.

A rising startup hub

In Vietnam, the innovation ecosystem is gaining growth momentum fuelled by startup investments, especially in the mobility and transport, manufacturing, and fintech sectors. Startups are increasingly able to secure funding from credible investors. Policies are backed up, as the government assembles different initiatives related to supporting startups.

According to the Asian Development Bank, in 2019 Vietnam attracted about 3 per cent of all venture capital in Southeast Asia, which rose to 19 per cent in 2022, going from fifth to third place in the region. According to the Vietnam National Innovation Centre, Vietnamese startups attracted nearly $2 billion in foreign investments in 2020-2022.

Vietnam is poised to become a new startup hub in Southeast Asia, with a young and tech-savvy population, a pro-entrepreneurship culture, and a rapidly developing economy. The question is how we power this momentum towards the net-zero transition and sustainable development.

In a recent sharing on increasing interests from global impact investors in the Vietnamese venture ecosystem, Jeongtae Kim, CEO of MYSC, a South Korea-based impact investing firm, echoed that factors such as stable domestic politics, a young and highly educated workforce, digital skills, and innovation capacity, as well as the support of the government of Vietnam create favorable conditions for startups.

The government has made significant strides to support startups, yet nurturing green and climate startups that can play a part in the net-zero transition is a new area.

Gibs Song, general partner from Vietnam Silicon Valley Capital, noted that achieving the UN’s Sustainable Development Goals (SDGs) by 2030 and transitioning to a net-zero society by 2050 is the global and national zeitgeist. Investing in innovative startups that can accelerate these goals will not only help Vietnam play its part in net-zero, but also present significant economic opportunities for the country. Given its young population, this is a golden time for Vietnam to transform the country as a rising economic powerhouse in the medium term, and the net-zero transition is an opportunity in that.

Therefore, achieving the SDGs by 2030 and transitioning to a net-zero society by 2050 will require significant progress in innovation across all major sectors of the economy.

Greenpreneurs

From the ecosystem building perspective, entrepreneurs striving to make an impact in sustainable development and net-zero transition in Vietnam still lack access to the right technologies, training, network, mentorship, and strategies to open doors to resources matching their plans. Such startups need technology transfer, coaching and mentoring to absorb innovative climate tech and customise it for local context.

An example is the Net Zero Challenge 2023 led by Touchstone Partners, Temasek Foundation, and Ho Chi Minh City Institute for Development Studies. Khanh Tran, managing partner at Touchstone Partners, highlighted that scaling climate solutions requires joint efforts of a wide range of stakeholders from the government and corporates to startups. There is a great deal of talent working to develop innovative solutions to the climate issues facing Vietnam and the rest of the world.

The goal of boosting climate tech or the green tech investment ecosystem is to apply useful climate technologies in Vietnam, and delivery immediate impacts.

Accelerators, deal sourcing, and investment mobilisation initiatives will facilitate such growth conditions for startups, build synergy with existing communities, and attract stronger capital flow in this sector.

Aside from technologies themselves, human capital will also be critical. Increased availability of cross-sector knowledge and expertise in climate innovation will be a key driver of growth for the climate tech ecosystem in Vietnam.

That is why the Global Green Growth Institute (GGGI) is also joining forces to support this dynamic startup ecosystem, focusing on direct impact generation. Any technologies and services, global or home-grown, from startups and smaller businesses, that hold the potential to directly contribute to Vietnam’s net-zero transition should have opportunities to accelerate.

Globally, the GGGI has provided established support in the early-stage startup investment space with various initiatives under the theme of Greenpreneurs – an initiative designed to supercharge green growth startups, particularly in and for emerging economies.

The successful rollout of the programme included an online global competition amid the pandemic, and country level incubators and accelerators focusing on specific segments such as forestry in Colombia, waste and circular economy in Uganda, off-grid energy for the marginalised in the Philippines, and small businesses in the Caribbean and Pacific regions, among others.

In Vietnam, we are now gearing up for startup acceleration programmes in collaboration with both public and private sectors to help enable the scale up of potential climate champions who can deliver direct sustainable impacts, and ultimately contribute to the country’s net-zero transition.

Vietnam’s adoption of net-zero emission target marks its ambition to pursue prosperous economic growth and sustainable development. This was followed by a series of efforts spanning various key sectors of the economy to accelerate the transition. These won’t be easy.

Propelling Vietnam to a net-zero pathway will only happen if it taps into the opportunities for public-private partnership, utilising much-needed international support, and making the right boost for green entrepreneurship and startups investment as a catalyst to speed up the efforts.

*The views reflected in this article are the views of the author and do not necessarily reflect the views of the Global Green Growth Institute or its members.