Kinhtedothi – Social-impact entrepreneurship is considered a distinctive startup model, realizing founders' entrepreneurial dreams while pursuing positive community values. However, businesses in this field remain constrained by many barriers that need to be removed.
Great potentialIn today's entrepreneurship trends, young startups increasingly prioritize social impact, addressing issues such as environmental pollution, climate change, and employment for disadvantaged people… In fact, when Covid-19 struck, these businesses demonstrated adaptability and breakthroughs, as well as their important role in solving social problems through advanced solutions and innovative business models.
As a social-impact startup, RecSports Vietnam creates positive impact by promoting health training and physical fitness and meeting people's exercise and recreation needs. After more than 5 years, it has achieved some success. Founder Nguyễn Phương Tùng says the market potential for social-impact products is enormous: international integration and growing domestic awareness of social-impact businesses help companies develop their capacity to deliver such activities. These businesses also receive special government attention. Through the Startup Nation movement, they participate in specialized seminars, gaining opportunities to connect with markets, capital, investors, technology experts, management knowledge, financial knowledge and more.
Associate Professor Dr. Trương Thị Nam Thắng, Director of the Center for Social Innovation and Entrepreneurship (CSIE), points out that social impact businesses have enormous growth potential. Around 80% of people in developing countries face environmental pollution, poverty, natural disasters, and inadequate education and healthcare. These are both challenges and opportunities for individuals and organizations seeking new business models that solve social problems while remaining commercially viable and scalable.
Why is success difficult?
Business ideas from enterprises creating social impact represent an inevitable and sustainable trend. However, few enterprises in this field succeed because they face many difficulties, including a lack of capital, weak access to financing, limited management and executive capabilities, and a shortage of support services.
Tạ Minh Tuấn is one of the first 2 Vietnamese people honored in Forbes ASIA 30 UNDER 30 in Science and Healthcare. He is currently Chairman of TMT Group, with nearly 20 businesses and organizations operating across various fields. Recently, he has become a strategic investor, particularly in businesses that create social impact. In Tuấn’s assessment, one weakness of social impact entrepreneurs is a lack of practical experience. Startups live with dreams and ideals but are not ready to engage with the market. In reality, the company that engages with the market first will understand it best. To gain practical experience, you must leave the office, meet your customers, and speak with them as early as possible. “To raise capital, businesses need to demonstrate that their business model is sustainable, generates a rate of return for investors, and addresses social problems in line with their original objectives,” Tuấn says.
Sharing this view, Đỗ Hồng Vân of Patamar Capital (a venture fund investing in social-impact companies in Asia) said impact businesses in Vietnam often struggle with social measurement, branding, human resources, management capability, and scalability. Funds investing in this field usually require their investments to generate both social impact and profit. Alongside these difficulties, businesses face unpredictable market changes amid Covid-19. “With new markets and customers, impact businesses need to balance financial strategies without harming the business, seek differentiation in the value chain, and train employees in new ways of operating,” Đỗ Hồng Vân shared.q
| “Policies are needed to promote social-impact businesses, such as support for access to capital and corporate income tax exemptions for retained profits from grants. They also need support to develop market access and scale up.” – Phan Đức Hiếu, Deputy Director of the Central Institute for Economic Management |
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