WHO ARE THE 25?

Early Đổi Mới   

Approximate Time Frame: This era began in the late 1980s and extended into the early and mid-1990s.

Though Đổi Mới was introduced in 1986, there was not a lot of activity in the first few years. There were a few milestones such as the land law, freeing up of the agricultural sector, and some decentralization of decision making to the provinces, but the country’s command economy structure was still mostly in place. State-owned enterprises (SOEs) still ran the show in terms of business.

In terms of foreign investment, the first companies in were from Taiwan and South Korea. Many of them were labor intensive industries (e.g., shoes, garments, furniture-making, etc…) whose owners were attracted to the relatively cheap land and labor available in Vietnam. They brought in capital, machinery, and perhaps most importantly foreign customers (purchase orders) for Made-In-Vietnam products. While there were opportunities in the early years of Đổi Mới, there was nothing easy about doing business during this era.

The individuals who made a difference during this era were true trailblazers.

The American Embargo Era

Approximate Time Frame: Technically, this era started immediately after the end of the American War on April 30, 1975 when the USA government imposed an embargo on all of Vietnam. Prior to Liberation, the Americans had an embargo on the government of North Vietnam which was extended to the entire country after the war was over and unification took place. This embargo was lifted in February 1994. This led to USA – Vietnam Normalization of diplomatic relations in 1995 and eventually the USA-Vietnam Bilateral Trade Agreement in 2001.

One of the biggest obstacles for the Vietnamese economy in the early years of Đổi Mới was the US Embargo. It severely hampered Vietnam’s attempts to grow its economy and join the international market place. Beginning in 1989 and due to the political upheaval in Eastern Europe, most of Vietnam’s established business and trading relationships were in flux. The Soviet Union, for example, was dissolving and could barely feed itself much less support an old socialist ally.

In addition, the US Embargo was not just an American issue. Multilateral institutions like the International Monetary Fund or the World Bank were restricted in what they could do in and for Vietnam. It also applied to private business. For example, important private companies like Airbus could not sell airplanes to Vietnam Airlines because the planes had American-made parts. Obviously, the American company Boeing had no opportunity to sell anything in Vietnam. The lifting of the embargo and the eventual normalization of diplomatic and trade relations between the United States and Vietnam changed nearly everything. There was suddenly a ‘Green Light’ for American companies and numerous other companies and institutions with American ties to do business in Vietnam.

The individuals profiled during this era knew these issues extremely well and worked hard to move forward despite the obstacles.

Free Trade

Approximate Time Frame: This era was kick-started by the American bilateral trade agreement (BTA) in 2000 and was firmly stamped as a durable and irreversible trend by Vietnam’s entry into the World Trade Organization (WTO) on January 1, 2007. This was followed by a series of trade agreements with countries and trade pacts around the world in the 2010s and beyond.

Vietnam’s entry into the WTO on January 1, 2007 could arguably be considered the country’s “Point of No Return” moment. This meant a point in time when a specific trend was established and it could not be easily reversed because doing so would be too disruptive. Vietnam had made the choice to not restrict imports or exports, not implement import substitution policies, and not coddle or protect large SOEs from outside competition. Instead, the message to Vietnamese business people was that the free market would decide who won and who lost.

With its entry into the WTO, this free trade path had been laid out, the rules of engagement were put into place, and essentially everyone had to play by the rules or not play at all. The result was the launch of thousands of companies who began to make products for export to overseas markets. It also meant a plethora of trade agreements with foreign countries and a huge spike in the country’s globalization rate (i.e., total trade divided by total GDP reflected as a percentage). Vietnam’s rate is around 160 percent which is one of the highest in the world among countries with a population of more than 10 million. High globalization rates are normally a feature of countries with small populations and city-states like Hong Kong and Singapore (both nations had globalization rates of 353 percent in 2023 according to the World Bank). Vietnam’s entrepreneurial manufacturers and logistic companies have begun to establish their country’s claim as the legitimate “Workshop of the World” that can deliver Made-in-Vietnam products to markets around the globe.

Perhaps the most striking feature of this era was that the ‘free trade’ trend was not just about tariffs, imports, exports, and other free trade types of issues. It was about a free trade of anything and everything, e.g., ideas, concepts, data, etc… The individuals profiled were among the leaders of this ‘point of no return’ trend.

COVID & VIetnam’s High Tech Future

Approximate Time Frame: This era focuses on Vietnam’s post-Covid environment and the range of leap frog technologies that have arrived to Vietnam. This includes the boom of ecommerce and e-learning to block chain developments and on up to the introduction of A.I. and Nvidia investing in two data centers in Vietnam.

There was a lot learned by Vietnamese from the Covid-19 era. One was the affirmation and growth of ecommerce and the use of ‘e-’ anything such as elearning, ebooks, epayments, ebanking, etc… Prior to Covid, these tools and platforms existed, but not a lot of Vietnamese people were using them because of a mistrust with the payment system. During the Covid-19 pandemic, cash could not be easily used so other forms of payment had to be created or used.

There are also “leap frog” technologies that allow countries and companies to skip legacy systems and adopt the most modern, newest type of technology available in the world. In most countries, this is happening, but there is also a resistance to using these technologies because of perceived job losses, technology owners still earning rents from the technology, resistance to change, etc… In Vietnam’s case, these old technologies did not exist in substantial volumes and thus the leap forward has been easier. Vietnam’s large labor force also allows for the execution of computer software coding projects and the development of block chain ventures which would be more difficult in other countries because there are not enough coders and workers. When A.I. is added on top of all this, this mix becomes quite interesting especially considering the Vietnamese government’s mostly hands-off approach to digital firewalls.

The individuals profiled here knew these leap frog issues very well and acted on them with a clear focus and a vision for the future.