Promoting innovation in businesses

However, to promptly achieve the set goals, it urgently needs solutions to promote the development of enterprises in accessing science and technology, digital transformation, and capital.

Barriers

Le Bo Linh, former Deputy Chairman of the National Assembly's Committee on Science, Technology and Environment, said that there are two barriers for enterprises doing science and technology or digital transformation: limitations on finances of enterprises themselves, and the inadequate financial mechanisms and institutions to support innovation and science and technology application.

BKAV Group is an example. From a small group researching free software, the group has now invested thousands of billions of VND in high-tech products such as Bphone smartphones, anti-virus software, and network security systems.

These products carry significant intellectual value, have been thoroughly researched, and bear the mark of Vietnamese intelligence. However, despite great efforts and taking initiative, they still face serious difficulties in capital to commercialise their products and expand the market.

Nguyen Tu Quang, CEO of BKAV Group, suggests that investment in science and technology is never enough. A single enterprise, no matter how dedicated, cannot "embrace" the entire investment chain from research and production to commercialisation and market expansion.

This must be a game for the whole system, the whole society, as seen in countries that have gone before. For example, over the past 15 years, China has successfully built an extremely strong fund system supporting science and technology development. There are two large funds: the Technology Insurance Fund, disbursing an average of 100 billion USD/year, and the National Guarantee Fund, which also disburses on a similar scale.

Thanks to these funds, millions of Chinese technology enterprises have been supported from the stage of not having a product to the stage of expanding scale, dominating the global market.

Meanwhile, in Viet Nam, the National Technology Innovation Fund, after nearly 19 years of operation, has only disbursed about 200 million USD — an average of about 10 million USD per year — which is too little compared to the actual needs and compared to what other countries are doing.

Moreover, the fund mechanism is still too cautious as most funds only provide non-refundable grants, or if loans are offered, there is no guarantee mechanism, resulting capital often fails to reach businesses when they need it most.

If the fund is only used in the form of allocation, it will only be effective once. However, if the fund is operated as a financial institution with a mechanism to mobilise, lend, invest for profit, and reinvest, each initial capital flow can create many times more value.

“One idle dong is just one dong. However, if it operates as a financial institution, it can generate much more,” shared Le Bo Linh.

In addition, it lacks a mechanism for valuing intangible assets, while technology enterprises’ assets are mostly intellectual property, software, and core technology, which cannot be valued as "tangible assets".

Banks always require customers to have collateral, but innovative enterprises do not have real estate to mortgage and current regulations remain vague on allowing the use of intangible assets as loan security.

Redesigning ecosystem for innovative enterprises

According to Nguyen Thi Bich Lan, Director of the Institute of Innovation and Digital Transformation under the Viet Nam Union of Science and Technology Associations, Singapore is a typical example of an effective capital approach in supporting innovative small and medium-sized enterprises.

In this island nation, the state gives each enterprise a sum of money when implementing digital transformation or technological innovation activities, and also mobilises large enterprises to contribute infrastructure under the model where the state covers 70% and large businesses 30%.

Large companies not only contribute their capital, but also directly provide technology infrastructure, digital platforms, data resources, and consulting experts to support smaller enterprises in implementing new technology products.

Particularly, Singapore not only supports finance or technique, but also creates conditions for small enterprises to test products on large enterprises’ infrastructure. If the products prove its effectiveness, the businesses will continue to receive support in trade promotion, communication and access to domestic and international markets.

This model creates a seamless innovation ecosystem, in which small businesses are not alone in their digital transformation journey, but are "responsibly supported" by both the state and the private sector.

According to Nguyen Tu Quang, it is necessary to establish a national guarantee fund, which has sufficient scale to support technology businesses that are in the stage of having products but lacking capital for commercialisation and expansion.

This fund not only provides loans but also guarantees loans at commercial banks, helping to unblock social capital flow into the high-risk but necessary field. It is essential to have more detailed guidance on intangible asset valuation, while creating a legal corridor to create confidence for commercial banks.

Hoang Huu Hanh, Deputy Director of the Department of International Cooperation, Ministry of Science and Technology, said that one of the key solutions to promote the development of small and medium-sized enterprises in accessing science and technology, digital transformation and capital is to build a truly effective innovation ecosystem, with close links between three parties: enterprises, universities, and the state.

About 90% of Vietnamese enterprises are small and medium-sized enterprises facing great difficulties in accessing new technology and investment capital. Therefore, policies need to be built flexibly and closely to reality, in which the state plays a creative role by investing in shared research infrastructure, providing financial support for small-scale applied research tasks, while prioritising key investments in several universities and research institutes with the capacity to connect with local enterprises.

In addition, encouraging large enterprises to participate in sharing research platforms and innovative value chains with small and medium-sized enterprises will create a "push" to transform the system. This cooperation model is being implemented by a number of pioneering corporations and can become a replicable solution.

Universities need to clearly orient applied research tasks, directly solving the production-business problems of small enterprises, instead of only theoretical research.

When each link in the ecosystem is connected, "activated" in the right role, small and medium-sized enterprises will truly have the opportunity to access technology, innovate, and overcome barriers in terms of capital, human resources, and infrastructure.

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