The Ministry of Science and Technology is working on a plan to create a Vietnamese venture capital fund, in a move to promote the Silicon Valley model in Viet Nam.

Vietnamplus online newspaper talked with Minister of Science and Technology Nguyen Quan on the sidelines of the Viet Nam-Finland Innovation Forum on October 23-24 in Ha Noi.

Minister of Science and Technology Nguyen Quan. Photo baodatviet.vn

Why did the ministry choose the Silicon Valley model to commercialise tech products?

Minister Nguyen Quan: Scientists know that lots of top technology brands, such as Google, Microsoft and Apple, originate from Silicon Valley in the US. The model is a driving force for scientists' creativity and connects closely to the founding of scientific and technology companies.

Big enterprises in the Silicon Valley started their business with large stocks of intellectual capital. They expanded their operations after receiving support from venture capital funds and other firms.

There are a great number of successful Silicon Valley models in the world, such as those in India and South Korea as well as in the US. Which model will Viet Nam follow?

Minister Nguyen Quan: We have been following the Silicon Valley model in the US. We have invited experts from America, especially Vietnamese specialists working there for a long time, to supervise the project.

We hope that their experience will help our model be equally successful.

Could you tell us how companies and scientists will take part? Is there any requirement for the scale of the firms?

Minister Nguyen Quan: Any scientists and companies who have interest in science and suggest new ideas can participate in this project. They must be determined to invest in scientific research and new technology.

Investment in projects is risky in Silicon Valley. However, successes will bring huge profits for investors and researchers.

As for the scale of participating companies, it depends on the capital resources of the fund we are building. The law on high technologies [which came into effect in 2009] referred to the fund, but it has not yet been established due to policy constraints, especially in the state budget law. First we will source capital from organisations and individuals to contribute to the fund.

The venture capital fund is expected to support scientific and technology researches. Photo toquoc.vn

Intellectual gatherings played an important role in the success of Silicon Valley. However, "brain drain" is a major problem in Viet Nam. How will the ministry prevent this?

Minister Nguyen Quan: In my opinion, there are two factors that can gather Vietnamese intellectuals: the passion of local scientists and the fact that work conditions in Viet Nam are not worse than in other countries.

We have to find a solution for brain drain, as it's becoming an increasing problem. The US, Japan and Russia face the same difficulty.

I think that if we create the most convenient workplace for scientists, they will feel comfortable doing research here, which will lead to the invention of scientific products that can be applied in economic development.

We hope that the amended law on science and technology will improve research conditions for scientists, preventing brain drain.

Scientists normally choose to work in places where they can contribute the most, yet we may attract them back to Viet Nam by reminding them of the good work conditions and their responsibilities for the country.

What facilities will the Silicon Valley in Viet Nam have?

Minister Nguyen Quan: Viet Nam is a developing country, so the government's capability to invest in science and technology is limited. We do not have any big research centres with modern facilities.

Still, Silicon Valley in the US was not equipped with modern facilities when it was first established. The core problem here is how to make businesses and scientists care about the project. If we can build a venture capital fund to support research, everything else will follow.

The state budget is never enough to support all necessary research, and its expenditure must follow strict regulations. If scientists receive state funding but their research does not succeed, they are investigated.

A venture capital fund is different. Capital comes from organisations and individuals, and their only requirement is to receive products on time as written in contracts. All expenses are paid in a simple and convenient way. The fund will be used effectively because investors themselves will decide who and what to invest in.

Could you tell us about the roadmap of the Vietnamese venture capital fund?

Minister Nguyen Quan: We will carry out pilot models and will expand them based on their success rates. The fund welcomes contributions from organisations and individuals.

I hope that 2014 will be the first year an unofficial fund of Viet Nam comes into operation and can support initial projects.

At the moment, there are a few foreign venture capital funds operating in Viet Nam. Although they have made achievements, their effectiveness is limited. Scientists have not heard of them and policies partly limit Vietnamese companies and experts from accessing international funds.

Obviously this creates an opportunity for us. If we do not build up a system of venture capital funds in Viet Nam soon, we will lose our market share in tech transformation as well as in local hedge funds. — VNS