The tech that is fuelling Vietnam’s ‘economic miracle’

Vu Van grew up in rural central Vietnam where her parents ran small businesses. Following their path of hard work and ambition, she built a career in international business before winning a place at Stanford Business School.

At Stanford, Van suffered a crisis of confidence. Although she spoke fluent English from working at global shipping company Maersk, her fellow students had trouble understanding her Vietnamese accent.

It inspired her to launch an English-language teaching app that uses speech recognition and artificial intelligence to help people master American accents. Today the app ELSA has 4 million users from Vietnam to Latin America and recently won $7 million in Series A funding.

ELSA is among numerous startups including e-commerce platform Tiki and online gaming service VNG – which has 100 million users – that are together driving the next phase of what the World Economic Forum calls Vietnam’s “economic miracle”. Vietnam has become one of Asia’s hottest venture capital destinations, rapidly catching up with Singapore and Indonesia in startup funding. In the first half of this year, it accounted for 17 per cent of Southeast Asian VC funding, compared with 5 per cent in all of last year.

The momentum keeps growing: startup investment is projected to exceed $800 million by the end of this year, representing an 80 per cent rise over last year’s $444 million.

From the tragedy of war, Vietnam has grown fast to middle-income status – and its 6.8 per cent economic growth rate is now higher than China’s. The first chapter of Vietnam’s ‘economic miracle’, built on manufacturing, was fostered by trade liberalisation, domestic deregulation and investment in human and physical capital.

The next phase – orientated on tech – is powered by the imaginative force of Vietnam’s nearly 100 million people, with a median age of just 30. That means Vietnam hits a sweet-spot of scale and demographics for stellar economic growth. A report by Standard Chartered forecasts that Vietnam’s GDP is on course for 7 per cent growth through the 2020s – and will surpass the $10,000 per capita GDP mark in 2030.

Education is key to Vietnam’s success. The OECD’s latest international student assessment – which tests high school students in maths, science and other fields – ranked Vietnam 8th out of 72, ahead of countries such as Germany and the Netherlands. According to Google engineer Neil Fraser – who has toured the country – Vietnam has some of the world’s best computer science students, with many 5th graders outperforming Bay Area 11th and 12th graders.

Crucially it’s women such as Van who are largely behind Vietnam’s impressive performance in tech and other spheres. Other prominent Vietnamese business leaders include Huong Tran, CEO of Epomi, an online shopping platform specialising in beauty products, and Ngyuen Thi Phuong Thao, the founder and CEO of budget airline VietJet and Southeast Asia’s only female billionaire.

Van, Tran and Thao stand at the pinnacle of an overall encouraging picture for Vietnam’s female entrepreneurs. According to a Grant Thornton report, women hold 36 per cent of senior management positions in Vietnamese businesses, ranking second highest in the region after the Philippines. And a Mastercard study showed that 31.3 per cent of businesses in Vietnam are owned by women, placing it first in Asia and sixth out of 53 surveyed economies, ahead of the US and many European countries.

Van’s childhood dream was to be a UN ambassador so she could be “a voice for many people”. Now she is helping Vietnam speak to the world with confidence – as it deploys tech talent to conquer global markets.