From TECHFEST to strategy – Vietnam’s innovation journey in the new era

Innovation and start-ups will play a decisive role in moving Vietnam forward and turning the goal of industrialised-nation status into reality. TECHFEST Vietnam 2025, which took place for the tenth consecutive time from 12 to 14 December 2025, has become a national innovation platform and a visible symbol - and accelerator - of this transition. Far beyond the borders of Hanoi, the event represents the spread of entrepreneurial spirit, the strengthening of multi-level connectivity, and the promotion of technological openness and investment.

In this sense, TECHFEST should not be understood merely as an annual start-up festival. Rather, it reflects Vietnam’s broader ambition to embed innovation more deeply into its economic and institutional fabric, and to position itself internationally as a forward-looking, innovation-oriented economy.

TECHFEST Hanoi 2025 from the organiser’s perspective

Prime Minister Pham Minh Chinh experiences Vietnamobile's Face ID facial recognition technology at TECHFEST 2025. (Photo: Ministry of Science and Technology)

As a member of the organizing committee, co-author Nguyen Phuong Quynh, believes TECHFEST Vietnam 2025 was a watershed moment, signifying a substantial change.

With over 60,000 participants, it was not just the scale that was impressive, but the quality of convergence. For the first time, we saw a genuine, high-level dialogue between international VCs, local founders, and senior policymakers, all in one place. The National Policy Forum on International Cooperation in Investment for Innovative Startups, held within the framework of TECHFEST, was a prime example.

This forum provided a structured platform for discussing global venture capital trends and the new legal frameworks in Vietnam, such as Decree 264 on VC funds. The focus was sharp: AI, green innovation, and, critically, the talent required to power both. The event’s success lay in its ability to act as a multi-level connector, linking government initiatives with academic research, startup needs with investor capital.

This direct feedback loop is invaluable and a testament to the government’s increasing openness. This is not a trivial achievement. In emerging markets, the cost of capital is often inflated not by fundamental risk, but by uncertainty - the fear of the unknown. TECHFEST, by making the ecosystem transparent, understandable, and accessible, helps to mitigate that cost.

From TECHFEST to strategy: Innovation as statecraft

In recent years, TECHFEST Vietnam has increasingly evolved into a magnet for innovators, entrepreneurs, and investors. Its appeal now extends far beyond Vietnam’s borders. It is therefore no exaggeration to view TECHFEST as an integral component of Vietnam’s emerging ”innovation diplomacy“.

Prof. Dr. Andreas Stoffers is from FOM University Essen, Germany. (Photo courtesy by author)

The event fits seamlessly into Vietnam’s strategy of presenting itself to the world not only as a reliable trading partner and an attractive destination for foreign direct investment, but also as a country that actively emphasises its innovative capabilities. Vietnam is positioning itself as a trustworthy partner for high-quality investment and as a destination for technologically sophisticated cooperation, including in the area of mergers and acquisitions.

Vietnam seeks to act as a legally secure and predictable anchor within the Asia-Pacific region. Its geographical location at the heart of this dynamic region reinforces its natural role as a connector and mediator - an advantage the country has increasingly learned to utilise.

This is particularly evident in Vietnam’s agenda-setting role within ASEAN and APEC, where innovation, digitalisation, green growth, and technological openness are gaining strategic importance. A strong innovation ecosystem is thus not only a driver of economic competitiveness, but also a key element of Vietnam’s internationally recognised soft power, extending well beyond the ASEAN region.

Key insights: Vietnam’s next development phase

Vietnam is entering a new phase of development - one characterised by innovation, qualitative growth, and increasing technological sophistication. A visible indicator of this shift is the fact that Vietnam is no longer known solely as a manufacturing base for consumer goods, but increasingly as a location for high-tech investment. The €150 million investment in R&D by the German software company SAP in 2025 is a telling example of this transformation.

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When examining the breadth and depth of reforms implemented over the past twelve months, it is difficult not to draw parallels with the landmark changes introduced in 1986. These reforms include strategic resolutions adopted by the Politburo, dozens of laws and resolutions passed by the National Assembly, and hundreds of decrees and implementation measures issued by the government. Taken together, these initiatives form a complex mosaic aimed at removing thousands of administrative obstacles and creating a more innovation-friendly environment.

Against this backdrop, it is justified to speak of the new era (ky nguyen moi) - a new reform phase that could provide Vietnam with the decisive momentum needed to escape the middle-income trap.

The key challenge in the coming years will be to translate this ambitious vision into a coherent institutional architecture. There are good reasons for optimism. Vietnam is not merely adapting to global trends in digitalisation and innovation, but has the potential to actively shape them and, in selected areas, to act as a first mover.

To achieve this, however, the country’s venture capital ecosystem must be further strengthened. Progress has already been made, but significant gaps remain, particularly in terms of transparency, institutional depth, and long-term support structures for the start-up landscape.

Technology showcases at TECHFEST Vietnam 2025. (Photo: Ministry of Science and Technology)

Financial hubs as enablers of innovation

In institutional terms, this reform momentum is closely linked to the two planned financial hubs in Ho Chi Minh City (international hub) and Da Nang (national hub) are likely to play a pivotal role in promoting innovation in Vietnam. Beyond their signalling effect at the international level, these hubs are expected to generate substantial spillover effects across the broader economy.

Both financial centres should be understood as essential components of Vietnam’s future innovation infrastructure. They have the potential to support the development of modern financial instruments, including those incorporating AI, to accelerate the growth of fintech and green finance, and to raise transparency and professional standards in areas where further improvement is still needed.

It is therefore important to view the financial hubs not as symbolic prestige projects, but as functional institutional platforms. If implemented decisively, they can create effective linkages between start-ups, VC, financial institutions, and international investors. In this way, the hubs can contribute to closing existing gaps in Vietnam’s innovation ecosystem.

The targeted use of new technologies within these financial centres also offers opportunities for leapfrogging, allowing Vietnam to implement future-oriented financial and technological solutions more rapidly than through incremental development alone.

TECHFEST, APEC, and Vietnam’s leadership narrative

TECHFEST Vietnam 2025 is no longer just an event showcasing booths of technology companies, but has become a crucial pillar in Vietnam's growth plan for the next era.

Nguyen Phuong Quynh is a Program Director, CBS - Hoa Sen University - M&A, IPO & Fundraising Consultant. (Photo courtesy by author)

Key themes of APEC 2025, such as digital transformation, AI governance, green growth, and human resource development, are all included in the TECHFEST agenda. This is no coincidence, but a deliberate strategy to use TECHFEST as a domestic laboratory for ideas and initiatives that Vietnam is pioneering internationally.

From a long-term perspective on M&A and integration, this represents a profound shift. Previously, Vietnam participated in international forums; now, Vietnam is stepping up to a pioneering role.

Through initiatives such as proposing an APEC Innovation Center or taking a stance on AI governance, Vietnam is demonstrating its role as a nation actively building a dynamic innovation ecosystem.

Conclusion: From event to long-term capability

Vietnam today stands at a critical inflection point. The national ambition around artificial intelligence, venture capital, semiconductors, smart manufacturing, and innovation-driven growth is no longer in question. Policy documents are increasingly sophisticated, pilot programs are multiplying, and Vietnam’s presence on the regional innovation map is visibly rising.

While TECHFEST Vietnam 2025 showcased many positive changes, it is only the starting point in Vietnam's innovation journey. The real challenge lies in "institutional memory" - the ecosystem's ability to retain lessons learned, translate dialogue into action, and build on momentum rather than starting over in each cycle. Events like TECHFEST act as a bridge in a continuous feedback loop between policy, capital, and entrepreneurship. Vietnam's challenge is to build systemic capacity.

This, in turn, requires Vietnam to build three forms of continuity:

First, policy continuity. Not merely the issuance of forward-looking strategies on AI, digital economy, or venture capital, but the institutional discipline to implement them consistently over time.

Second, capital continuity. Innovation cannot be financed solely through short-term or opportunistic capital. The development of a resilient base of domestic institutional investors capable of providing patient capital across economic cycles.

Third, knowledge continuity. Innovation governance ultimately rests on people, not policies. Vietnam must develop a professional community that understands both international standards and local context.

Together, these three forms of continuity function are the infrastructure of trust that underpins any sustainable innovation economy.

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