Luận văn thạc sĩ impacts of start ups and smes on the nature of work and employment in vietnam perspectives from evolutionary economics

Le Anh Khanh Minh | 187

Impacts of start-ups and SMEs on the nature of
work and employment in Vietnam:
Perspectives from evolutionary economics
LE ANH KHANH MINH
The University of Queensland –

Abstract
Never has the trend of start-ups and small-and-medium enterprises (SMEs) risen so rapidly
in Vietnam. In this context, these new business entities alter thoroughly the nature of work and
employment in the economy. The impacts can be studied using evolutionary economics because
the mainstream, traditional thoughts have failed to incorporate institutional and social factors
into analysis. While traditional schools of thoughts view the main economic figure to be
individual who is tasked with making decisions at a period of time under resource scarcity,
recent heterodox perspectives start to adopt the fact that agents are also subject to history and
complex systems of rules. It is the meso-level movements that drive evolutions in behaviours of
the micro, individual rule-carriers and in the macro domain of the whole industry or economy.
The continuum does not range from ‘micro-’ to ‘macro-’, but also includes ‘meso-’ in between.
Using micro-meso-macro framework from the evolutionary school, the paper seeks to explain
the impacts of start-ups and SMEs at micro- and macro-level by looking from the mesoperspective. In doing so, this exploratory paper also aims at laying out ideas for further research
into the economic dynamics of start-ups, while adding, though little and incremental,
contribution to the literature on evolutionary economics in Vietnam.
Keywords: start-ups and SMEs in Vietnam; nature of work and employment; evolutionary
economics; micro-meso-macro; rule; complex system.

1. Introduction
Although the start-up and SME trend is blooming in Vietnam, the start-up ecosystem
remains an understudied aspect. The rise of these new economic entities has altered the nature
of work and employment in the country. More focus is placed on soft skill training and extra-

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curricular experience rather than traditional education. Huge and successful companies now
invest more in new businesses and talents. The idea of life-long career in one organization is
becoming less common, replaced by the tendency to hop between jobs and freelancing. These
are only a few movements in the recent employment scene in Vietnam. In the near future when
there are more resources pouring into innovation and entrepreneurship, more changes can be
expected. It is time to start studying start-ups and SMEs and their impacts on the economy.
As innovation, entrepreneurship, start-ups and SMEs are dynamic by nature,
frameworks from mainstream, neoclassical economics may not serve well to analyse the
impacts of them on the nature of work. Therefore, the author feels the need to take the
perspective of evolutionary economics, in particular the micro-meso-macro framework by
Dopfer et al (2004), to look at the changes. At this stage of research, the paper aims to provide
an exploratory survey of the impacts that start-ups and SMEs have on the employment scene in
Vietnam.
The outline of the paper is as followed: First, the paper seeks to provide an overview of
evolutionary economics and its main idea in contrast with mainstream neoclassical school,
followed by the micro-meso-macro framework. It then discusses the impacts of start-ups and
SMEs at three levels: meso, micro and macro. Among these, the meso-level analysis is further
divided into four categories based on the taxonomy of rules: cognitive, behavioural, social and
technical. For readers’ convenience, these impacts are denoted as [Mic], [Mac], [C], [B], [S] and
[T], corresponding to micro-, macro-impacts, cognitive, behavioural, social and technical rules.
A full summary table of these impacts can be found in the conclusion part of this paper.

2. The Evolutionary Economics Perspectives
2.1.

Evolutionary economics – An overview

Evolution economics emerged as a new economic school of thought only a few decades ago.
However, the original idea of the branch was rooted since the late nineteenth century. In a 1898
article, Thorstein Veblen called into question “Why is economics not an evolutionary science?”
and coined the idea of a new branch of economic thinking – evolutionary economics. Veblen
argued, in the article, that economics, as with other modern sciences, are evolutionary sciences
(Veblen, 1898). Since then, many famous economists have made significant contributions to this
modern, evolutionary line of thinking. Besides Veblen with the notion of institutions, habits and
norms as determinants of economic choice, there have also been other economic philosophers
who have exerted considerable influence on the branch. These include Joseph Schumpeter with
his work on entrepreneurship, innovation and creative destruction, Friedrich Hayek with his
notion of self-organization via knowledge, Kenneth Boulding and the parallel comparison

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Le Anh Khanh Minh | 189

between biological economics and evolutionary economics, Richard Nelson and Sidney Winter
with their evolutionary theory of economic change, and Geoffrey Hodgson with his extended
work on social institutions. Following the tradition of evolutionary economics, there have also
been recent economists in the field: Kurt Dopfer, John Foster and Jason Potts with their micromeso-macro framework for economic analysis, Jason Potts and Brian Loasby with complex
system theory, Peter Earl and Tim Wakeley on business economics and consumer theory, and
Thomas Mandeville on information economics.
In essence, evolutionary economics takes its main idea from biology’s Darwinism – it treats

Darwin’s evolutionary theory as a starting point of the new thinking line. Whereas the main
analysis figure of biology is gene and genetic material, those of evolutionary economics are rules
or routines (Boulding, 1983). Dopfer & Potts (2015) denoted a rule as the idea that organizes
actions or resources into operations and, as such, economic actions or resources are the product
of rules. At individual level, routines or rules are the knowledge within the socio-economic
context that shapes human’s cognition, behaviour, convention, and habit. At firm level, routines
are what determine corporate structure, organizational culture and features of the goods and
services that a firm offers to the market. These routines are emergent phenomena that are
socially sourced, although they may have started with individual experimentation (Earl, 2017).
As with the passing down of genes to later generations, evolutionary economics places emphasis
on the passing down of rules and routines in the economy across time. Mutations are viewed as
similar to innovation, which is an origination of new rules and routines in the economic
complex system. Innovation ultimately changes relative competitive fitness of rivals. Any rules
or routines that have the best competitive fitness are retained and replicated by other rule
carriers, leading to wider application of the routines or rules on which the success was based.
The process of changing rules is necessarily the process of knowledge growth, which in turn, is
key to economic development.
Darwin’s biological evolution

Evolutionary economics

Gene and genetic material

Rules and routines as socially sourced, emergent
phenomena

Selection and passing down of genes best adapted
to changes in external context

Competition, selection, diffusion of rules and

routines with competitive fitness to the system

Mutation

Innovation, knowledge growth, origination of new
rules and routines

Figure 1. Evolutionary economics and Darwin's biological evolution
By definition, Veblen notes that evolutionary economics “must be the theory of a process of
cultural growth as determined by the economic interest, a theory of cumulative sequence of
economic institutions stated in terms of the process itself”. His view places emphasis on the
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190 | ICUEH2017

feature of path dependency, co-evolutionary process, and sets of institutions in economic
analysis. In other words, economics is not merely a computational cost-benefit analysis; rather,
economics should also incorporate insights from other sciences that study human’s nature and
behaviour, such as sociology, history, philosophy, and moral studies. Movements in the
economic sphere, including behaviour, decision, thinking, and evolution, are all products of the
interactions in the complex system of rules and routines throughout history and across context.

Evolutionary economics differ from the currently dominant, mainstream neoclassical
economics in many ways. Firstly, the two lines of economic thinking hold contrast views on the
nature of human, or more broadly, economic agents. In mainstream economics, the economic
human, homo economicus, is portrayed as having perfect rationality and computational
capability. He is self-interested and utility-maximizing creatures whose quest is to optimize his
welfare under certain resource constraint. Meanwhile, evolutionary economics consider human
to be product of contexts. This is in line with Veblen’s institutionalist view that human is a
creature of habit that follows socially embedded rules and routines unconsciously. In deed, we
do not simply gather information from the environment, compare the cost and benefit of each
scenario and make decisions. Our actions are drawn from a pool of habits, depending on their
contingencies. The use of a habit reinforces its probability of being chosen again in the future. In
this way, there is no given set of ranked preferences, but a set of habits with varied propensities
(Veblen, 1898).
Secondly, evolutionary economics also differ on the assumption of information in the
economy. Mainstream thinking assumes an environment of perfect information, where
everyone is fully aware of all metrics and variables necessary for making decisions in his or her
best interest. This is not usually the case in reality as human is subject to bounded rationality
with a certain set of available information (Simon, 1972). As a consequence of this imperfect
information world, there exist transaction cost, search cost, cost of switching or changing
mindset and behaviour, marketing cost of making the products known to target consumers, and
barriers to entry and exit. Evolutionary economics assumes the above as problems of
knowledge.
Thirdly, evolutionary thinking does not view the economy to tend toward a state of
equilibrium. In mainstream economics, after a change in the economic system, such as a price
change, the system eventually pulls back to the state before the change happens. This reflects a
conception of time as logical and reversible (Robinson, 1980). In this sense, any future events
can be predicted upon probabilities of scenarios. Recent heterodox economics hold a contrary
view of irreversible time flow: Any disturbance in the economic system does not lead back to the
previous state, but to a new state of new habits and their attached propensities. As Bausor
(1982, 1984) and Shackle (2010) denoted, a particular choice results in a certain outcome and

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Le Anh Khanh Minh | 191

new information, which alters perception and worldview of the decision-maker, who would
then change the choice in the next stages of time, making an endless loop. Evolutionary
economics also emphasizes the role of history and institutions in economic evolution. Small
shocks can lead to big difference in the long run, creating system lock-ins that make it
impossible to go back and do differently. As such, evolutionary economics do not see the
economy under the equilibrium approach. Instead, it pictures the system as a process of
interactions and selection of rules and routines underlying micro- and macro-level decisions and
behaviours: a co-evolutionary process. Economic evolution is essentially evolution of knowledge
embedded in the socio-economic ground of society.
Mainstream economics

Evolutionary economics

Human agent as self-interested, utility-maximising
creature with perfect rationality and hedonistic
computational capability

Human agent as creature of context, habit and
bounded rationality, following embedded rules;
actions drawn from a pool of habits according to
the habit’s propensity of use

Perfect, symmetric information

Only some certain set of available information;
assume problems of knowledge and costs of
transaction, searching, switching, changing
lifestyles, marketing, and barriers to entry and exit

Logical, reversible, ergodic view of time; future
events happen according to predicted probabilities

Historical, irreversible, non-ergodic view of time;
small shocks lead to big changes and system lockins; history and institution matters, loop of new
information and new decisions

The economy tends toward an equilibrium state
after shocks

No equilibrium; the economy cannot return to the
state before shock; co-evolutionary process of
information, rules and decisions keep the economy
changing

Figure 2. Mainstream economics and Evolutionary economics

3. Micro-meso-macro

A framework used to analyze the evolution of economic system is the micro-meso-macro
framework. Dopfer et al. (2004) developed the framework based on the ontology of
evolutionary economics that the economic system, in nature, is a “population of rules, a
structure of rules, and a process of rules”. The authors do not see the division of economics into
macro and micro sufficient to examine economic evolution: “From the evolutionary perspective,
one cannot directly sum micro into macro”. In line with this thinking, economics is not merely
defined by decisions and behaviours of individuals, firms, and the aggregate consequences.
Indeed, there must also be consideration for history, institutions, norms, and rules in the
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192 | ICUEH2017

society. From micro-level to macro-level, there needs an intermediate level that describes the
underlying institutional factors that are actually driving economic changes. This level is the
meso-level lying in between the micro-macro continuum.
Micro

Meso

Macro

Individual agent

Generic rule

Aggregate movements

Figure 3. Unit of analysis
Dopfer et al (2004) characterize the economy as a highly complex system of rules, which
interact with each other and change over time. These dynamic interplay and evolution of rules
give rise to new rules or enhance existing ones, driving economic evolution. These drivers
happen at the meso-level of the system in a process of origination, adoption, and retention of
rules. A meso unit consists of a generic rule and its population of actualization, which is made
up of agents and agencies carrying the rule. From micro perspective, economic agent is “a ruleusing and rule-making animal”; in other words, human is a product of institutions,
expectations, surroundings, that creates and follows these rules simultaneously and
unconsciously. Such rules shape the cognitive reasoning and behaviour of economic agents,
such as perception of work, organizational culture and division of labour. From macro
perspective, meso units make up the entire system or structure of concern. Many rules from the
broad environment, including economic, social, technological, political, ecological, and so forth,
all dynamically interact and construct the big picture, particularly an industry or a whole
economy. The meso units within a system define the features of such system, such as industrial
organization, market structure, management and governance. Any change in generic rules at
meso-level induces changes at other levels. In the micro domain, it is the change in the cognition
and behaviour of rule carriers and how they interact, whereas in the macro domain, it is the
change in the coordination structure between meso units.

4. Impacts on the Nature of Work and Employment
4.1.

The meso domain

At meso level, the main unit of analysis is the meso unit, comprising of a generic rule and its
population of actualization. One way to classify generic rules is the taxonomy of rules (Dopfer &
Potts, 2015), which divides rules into subject rules and object rules. Subject rules are those that
shape agents’ internal mind and external interaction with other subjects, which are then
categorized into cognitive and behavioural rules. Object rules are rules for organizing things,
either between many subjects or objects, and further comprise of social and technical rules.

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Le Anh Khanh Minh | 193

Generic Rules
Subject

Object

Cognitive

Behavioural

Social

Technical

Figure 4. Rule taxonomy
In the case of Vietnam, the trend of start-ups and SMEs has given rise to changes in many
rules and routines in the economy. The rules not only originate, diffuse and retain by
themselves, but also affect and be affected by other rules, creating a co-evolutionary process of
cognitive, behavioural, social and technical rules in the economy.
Cognitive rules [C]
Cognitive rules are subject rules for thinking and perceiving the world that operate in the
internal mind of the subject – the economic agent. In Vietnam, the perception and expectation of
job and career have transformed dramatically since the rise of start-ups and SMEs. Office hours
are still 8 hours per working day, but the actual hours people are on the job can exceed the total
amount of time they spend in the office [denoted C1; a complete table of impacts can be found in
the conclusion]. With the aid of technology [T1, T2] jobs can now be brought to places other
than the office, even home and on holiday, so people can be “at work” outside office hours [C2].
The emergence of new types of jobs on part-time, contractual or voluntary terms [Mac2] leads
to the concept “freelance” [C3]. Prior to the wave of start-ups, labour would view employment
as having a job with long-term contract and secured wage and benefit. However, people now
also see freelance, or self-employment, as a type of employment where labour do not work for a
firm or an employer, but manage their own business. Due to the contractual, short-term nature
of freelancing jobs, freelancers are also seen as job-hopping individuals [C4]: They switch fast
between jobs and can work on many jobs at a time. The retention rate of freelancers is much
lower than of payroll staff, but that does not mean payroll staff do not job-hop. Such shifts to
flexible working hours and spaces, freelancing, and job-hopping have altered the traditional
mind-set for life-long career in one single organization [C5]. As society becomes more open to
new types of work, it is possible that a person has experience across many positions and
organizations.
An entrepreneur, whether on payroll or self-employed, in this new scenario also looks
different from the one before the start-up trends. He is a risk-taking, failure-tolerating [C6]

person who desires to have his own business [C7], as well as a self-starter [C8]. To do so, one
must be aware that an inventor is not necessarily an innovator: A new invention or discovery
does not always lead to a breakthrough. If one is to characterize the new invention as a codified
rule or knowledge, there must also be tacit knowledge to complement and diffuse the invention
into an innovation (Leonard & Sensiper, 1998). Tacit knowledge is the knowledge that is
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194 | ICUEH2017

difficult to codified into writing or visualization or transferred between agents. Examples of tacit
knowledge include interpersonal skills, ability to build network, leadership traits, and intuition.
Hence, employers in the new scenario place a stronger focus on soft skills to complement the
codified knowledge from their academic education [C9]. Furthermore, in early stages of
operations, start-ups and SMEs do not usually have clear and specialized division of tasks inside
the organization [B1, B2]. One person may take on many tasks of different functions. Therefore,
there is also a tendency of employers to develop a diverse set of skills instead of focusing on a
narrow specialization [C10]. For example, someone who is in charge of communication may
also take on marketing, or one who works in the finance department can also do crowd-funding
for the organization. Because of these changes in the nature of work and division of labour, the
internal cognitive rule of economic agents – labour – also experience a change from recognition
of tacit knowledge (soft skills) and multi-tasking ability.

Behavioural rules [B]
Behavioural rules are embedded in the subject’s mind, operating his or her interaction with
the external environment. Vietnam’s employment scene has not stayed out of the world changes
in the way people interact with each other in the workplace. As start-ups are brought about by
self-starters [C8] who desire to have their own business [C7], these small companies are usually
short in finance and thus, lack of staff to cover every area of the business. They manage to
operate with limited resources by having the small personnel to multi-task different functions.
This means that the division of labour is not clear between staff [B1]; nor is the task division
specialized to suit each person’s capabilities. One staff can work on jobs of many functions, and
the tasks can intersect with the others, creating a complex personnel structure [B2]. Unclear
division of labour leads to the need to communicate for better collaboration, resulting in a mindset toward cooperation and network [B3]. Also arise in this behavioural rule change is the
notion of appraisal and feedback mechanism [B4].
Along with the rising need to cooperate, another result of the lack in human resources is the
requirement of independence [B5]. With limited resources and the demand to be multi-tasking,
personnel of start-ups must be able to work independently without little supervision. This is
also the common requirement in job advertisement nowadays. For start-ups with insufficient
internal capabilities, outsourcing parts of its functions is an option to get the job done [B6].
Outsourcing activities not only give rise to freelancing [C3], but also reorganizes the labour
market: By introducing new types of jobs, such as part-time, contractual, or voluntary to the
market [Mac2], these start-ups become competitors to full-time job companies, competing for
labour supply and talents [Mac2].

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Le Anh Khanh Minh | 195

Changes in labour division and mind-set for cooperation affect the physical organization of
interpersonal organization [B7]. Previously, each firm would have its own office, however small
it might be. For larger firms, it is common to see long lines of desks separated into cubes so that
each employee has his own workstation. This is because the jobs in large firms are specialized to
each staff; there is still the need to communicate, but the interactions do not need to be as
intense and frequent as in start-ups. With the rise of start-ups and increasing need to
collaborate, these small firms have to work around its budget constraint by arranging all its
functions in one office space. Alternatively, firms can choose to share the workplace with others,
as seen in co-working spaces and hubs [Mic2] where a large office-furnished hall hosts
employees from many different start-ups. Apart from changes to open, collaborative workplace,
there emerges the habit of working from home and round-the-hour work, thanks to advances in
technology [T1, T2]. In addition to changes in physical workplace, the total time spent on the job
also faces tremendous extension from 8 hours to however long the job requires [C1].
Collaborative mind-set also gives rise to the supportive attitude of successful businesses
towards start-ups and SMEs. In neoclassical economics and in earlier times, firms are seen as
competitors to each other, competing for resources and revenue. Large, incumbent firms in the
market would see new firms as a threat to their profit and would take strategies to hinder their
entry into market. Beside such substitution view, the late reality has also embraced a
complementarity view that both large firms and start-ups can be beneficial from strategic
alliances. Embedded pedagogic nature [B8], along with expected value in return, drives
successful businesses to invest and build capacities in start-ups in many forms, ranging from
angel investment, venture capital, to incubation and idea camp [Mic3].
Social rules [S]
Social rules are object rules that bring together people into social organizations. While
behavioural rules define the way people interact with social surroundings within the subject’s

mind, social rules look at it from an external perspective, examining how many subjects
influence and get influenced by others. Social organizations exist in many forms, from firms,
hierarchies, networks, to markets, laws, and other institutions.
In Vietnam, there have been dramatic changes in social organizations since the rise of startups and SMEs. Firms have started to adopt a less hierarchical management system [S1],
allowing more communication and feedback between staff and functions [B4]. It is less common
to see U-form structure of firm, in which the firm is clearly divided into functions (e.g
production, marketing, finance, and research), with management at the top notch. More of Mform structure is embraced, in which the firms is divided into sets of miniature U-form
companies, each handling a particular product line (Williamson, 1991)). In this organizational
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196 | ICUEH2017

structure, each sub-firm acts as a sub-system of the whole one that is independent in terms of
making profit and tactical operations. The head office remains in charge of overall strategic
management to align all sub-firms with overall direction, marketing and funding. Just as in
start-ups where each staff can be doing various tasks of different functions, sub-firms have
sovereignty and flexibility in allocating resources to internal departments. For large firms, this
decomposable structure [S2] is also a way to reduce risks of shocks on the entire company
because the system is composed of sub-systems. In case of disturbances, only a part of the firm
is damaged, while the others are not harmed as much.
Industrial structure has undergone major changes, too. The substitution and competition

view is not as dominant as before; rather, actors in industries now have a more open view
towards complementarity [S3]. Network of firms and start-ups [S4] are formed and serve as
platforms for knowledge sharing and exchange between those who would previously compete
for resources. These networks can be in the form of forum, strategic alliance, partnership,
competition, and co-working space [Mac2]. This movement has transformed industrial
organization into a complex network structure where entrepreneurs and expertise not only
compete for financial and human resources but also interact and share ideas together [Mac2].
For such networks and alliances to sustain, an essential institution is trust [S5]. Trust is an
underlying element of interpersonal interaction that helps reduce transaction costs and failure
risks. In particular, in the case of recruitment, there is a growing trend of recruitment within a
network of entrepreneurs who recruiters would expect to be like-minded and passionate about
start-ups. Cooperation between actors also requires trust as a foundation for them to work
together. Here, the institution acts to bind actors to their commitment, or else they would face
distrust and lose credit in the start-up community.
Technical rules [T]
If social rules are rules for organizing human subjects, technical rules are for organizing
matter and know-how. Changes in these rules are best seen in several advances in technology,
especially in information and communication, which have been facilitating the emergence of
start-ups and SMEs. Technical rules are embodied in electronic device (computer, laptop,
smartphone, and tablet) [T1], connection network [T2] (the Internet, wireless connection, and
4G), and websites, applications and social media channels [T1, T2, T3, T4]. These rule changes
have enhanced the access, processing and communication of information and knowledge in the
economy. According to Live Stat Internet (Internet Live Stats, 2017), more than 49 million
people in Vietnam had access to the Internet in 2016, making a penetration rate of 52% out of
total population.

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Le Anh Khanh Minh | 197

Electronic devices and Internet connection have made possible the concept of work-fromhome and round-the-hour work [C1, C2]. Anyone with a laptop or smartphone can work,
whether he is at home, on the road, or at any other places with Internet connection. In Vietnam,
cafes and restaurants are now places for people to come and do their work [Mic2, Mic3],
especially for those who are at the start of their entrepreneurship and cannot afford an office
yet. For example, jobs can be worked on on-road when Uber or Grab drivers receive their trip
details on screen, without having to talk or report to a real-person coordinator. The Internet
also gives rise to platforms for project management and teamwork [T3]. Asana, Zoho and Slack
are some of the commonly used applications for collaboration, task management and progress
tracking in small start-ups, so the nature of work is now less physical and more online [C2].
The perception of workplace is no longer confined in office desks and cubes, but extends to
outside the office and on the Internet [B7]. The Internet and the rise of websites boost the
communication of knowledge; several sites, forums, and blogs have been set up to share
experience and know-how to others who are in need of expertise [T4]. Contents on these
websites are contributed voluntarily by the community based on the tendency of natural
pedagogy [B8].
Self-employment [C3] also benefits from technological changes. More people are now
participating in e-commerce and become owners of their own businesses thanks to e-commerce
platforms such as Lazada and Vatgia [T5]. Besides online retaling, transportation and shipping
have also seen self-employed actors, as in the case of Uber, Grab, and Delivery Now. Selfemployees and start-ups can as well market their services faster on a wider scope by using social
media channels such as Facebook and Zalo.
Furthermore, advances in technology facilitate the coordination process in the economic

system [T6]. In particular, they match demanders and suppliers of resources and labour
services. For example, websites such as Upwork, Vlance and Vietfreelance bring together those
looking for short-term job and those needing to outsource part of their operations. Websites
about start-ups such as Khoinghiepvietnam.org and Startupvietnam.org are also where
investors and starting entrepreneurs find matching partners. Forums and social media of startup-related interests are some other channels for people to look for like-minders. In short,
changes in technical rules, specifically in technology, have made significant transformation in
the nature of work and employment by reducing transaction costs as well as facilitating
communication between agents.

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198 | ICUEH2017

5. The micro domain
Changes in embedded rules of society affect the way economic agents – individuals and firms
– make decision and behave. For individuals, particularly entrepreneurs, employees and
students, cognitive, behavioural, social and technical rules work together to shape their view of
work nature and employment. In the new employment scene, a labour now has certain
portraits: He is pro-active, self-starting, and initiative in making decisions about his career [C3,
C4]. He copes better with disturbance, risk and failure, as well as has more flexibility and
resilience [C6]. He is competent in terms of knowledge and skills, and is able of multi-tasking

[C9, C10].
Enabled by social [S] and technical [T] rules in the meso domain, economic actors have also
modified their decisions and behaviours to adapt to changes in routines. They now demand
start-up related services [Mic1]. As soft skills become essential requirements for jobs, more and
more individuals now develop demand for opportunities to acquire these skills. In universities,
students are becoming more interested in extra-curricular activities. Whereas previously,
students only focused on studying, they are now more engaged in clubs and activities outside
the class to gain the tacit knowledge that cannot be otherwise taught in their majors. Young
people also opt to take training courses on soft skills such as communication, public speaking,
presentation and teamwork. Besides activities and soft skills, there is also a growing demand for
gaining practical experience. Internship or work experience has now become an important
element in the profile of those who seek good jobs. Furthermore, there is also a desire to
showcase start-up ideas and run one’s own business, shown through participation in
competition and start-up network events. In short, changes in rules of work have allowed and
encouraged labour, especially students, employees and entrepreneurs, to become more capable
and prepared to cope with the fast-changing, more demanding employment scene.
From the above demands come accordingly supplies [Mic2]. Following the start-up trend,
many skill-related services are born to meet new demands in the employment field [Mic].
Training centres such as YUP Institute Vietnam, Youth Spark Career Readiness by Microsoft and
Vietnam Chamber of Commerce and Industry, and Information Technology Park (ITP) by
Vietnam National University, thrive on the need to gain soft skills of students and young
entrepreneurs. Several clubs and organizations seek to provide opportunities for young people.
Even clubs that work for causes other than youths also recruit these targets into their teams, so
more are added to the overall opportunity pool. Some popular organizations within the young
community are VietAbroader, Project Sugar, and International Youth Club (an affiliate of the
Communist Youth Union), to name a few.

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Le Anh Khanh Minh | 199

The need for increasing teamwork and collaboration in start-ups and SMEs gives rise to a
new form of workplace: co-working spaces and hubs. In Hanoi, popular places for
entrepreneurs are HATCH! NEST Hanoi, HanoiHub, 5DESIRE Co-working space, Hub.IT and
Up Co. Meanwhile, young people in Ho Chi Minh City turn to Work Saigon, Dreamplex, Circo,
Fablab Saigon, and Citihub (Shona, 2016a). These hubs provide a wide variety of services,
ranging from hot desk, meeting room to Internet connection, printing and document storage.
Not only do they build up infrastructure for the start-up community, they also support young
entrepreneurs with events and workshops, as well as chances to network with investors and
other entrepreneurs. Saigon Coworking even offers legal, financial and accounting consulting as
part of their package. These hubs tend to locate where the environment is calm and quiet and
there is good view out on the city or green spaces, such as Work Saigon equipped with
swimming pool and organic garden. There is also the search website Coworker.com where
users can visit and compare different hubs in Vietnam. Cooperation and network among firms
lead to the physical organization in which these firms are located into start-up districts, such as
Hoa Lac Hi-tech Park (HHTP), Saigon Hi-tech Park (SHTP) and Quang Trung Software City.
These are areas where many companies are based, reducing proximity among them and
fostering more collaboration.
Besides the increasing supply of co-working spaces and hubs, restaurants and cafes have also
transformed their functions to suit the trend. Previously, these places were mainly for eating
and social hangouts, but cafes have now become destinations for working and meeting as well.

Toong and Clickspace in Hanoi are typical model of a mix of start-up hub and coffee shop.
Besides, 24/7 cafes are also spots for working, such as Thuc Coffee and The Factory in Ho Chi
Minh City.
The third change in the micro domain is the rise of new economic actors that specialize on
supporting start-ups and new businesses [Mic3]. Venture capital is a kind of investment by
wealthy individuals as part of their investment portfolio (Velayanikal, 2014). IDG Venture
Vietnam, CyberAgent Venture, DFJ VinaCapital, and Prosperous Vietnam Investment are some
popular venture capitals that have successfully invested in businesses like Vietnamworks,
VinaGame, Vatgia, Foody, Tiki, and Yeah1 (Khoi Nghiep, 2016). Firms and organizations, which
were previously not related to start-ups, are now developing programs to support new
businesses, such as FPT Ventures, the Communist Youth Union, Ho Chi Minh City Start-up and
Innovation Fund (HSIF), and even the Ministry of Science and Technology. Next, there are
incubators to provide entrepreneurs training and support for start-ups in their first stages of
development. Some examples of incubation programs in Vietnam are the government-led
Vietnamese Silicon Valley Project, Hatch!, Founder’s Institute, X-Incubator, and Vuon Uom Vat

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200 | ICUEH2017

Gia (Shona, 2016b). In addition to the above new actors, there are also angel investors, nonprofit organizations, and competition organizers in the start-up scene.

The next change in the micro domain is in the emergence of other related actors in the startup scene. Following the demand and supply of start-ups and supporting services are the rise of
further related actors, such as book authors, websites, support centres, and television programs.
Unlike previous times, there are now books written by successful innovators to share their
experience on their start-up journey. Besides books from Vietnamese authors such as Smart-up
(Khoi nghiep thong minh, by Ngo Cong Truong) and Start-up Handbook (So tay khoi nghiep, by
many authors), those from international writers such as Zero to one (by Peter Thiel), and
Business model generation (by Alexander Osterwalder and Yves Pigneur) are also titles to look
for (Son, 2016). Many websites are published to cover news about start-ups, match investor and
entrepreneur, and build network: These include Life-changing Books (Tu sach nen tang doi doi,
by Dang Le Nguyen Vu), Start-up Vietnam (startupvietnam.org), Khoi Nghiep (khoi.nghiep.vn)
and Khoi Nghiep Tre (khoinghieptre.vn). Support centres such as the Business Start-up Support
Centre (BSSC) were born. News media also feature a column on their newspapers for start-up
related news, as seen on Thanh Nien News, Tuoi Tre News, and VnExpress. In addition,
television broadcasters now develop programs about start-ups, too, such as VTV with Start-up
Trip (Chuyen xe khoi nghiep) and HTV with Start-up Cafe (Ca phe khoi nghiep).

6. The macro domain
The macro perspective looks at the changes in work nature and employment as changes of
rules and of the populations carrying the rules. These rules are cognitive, behavioural, social and
technical rules, which all develop and interact in a dynamic way, resulting in a co-evolutionary
process that shape movements of rule populations in society. Rule populations include but are
not limited to, entrepreneurs, employees, students, firms, investors, and media agents. In short,
the evolution of work and employment nature in Vietnam is a process of enhancing existing
rules [Mac1] while constantly leaning towards the ‘new’ [Mac2].
Several of the ‘new’, influenced by changes in rules and routines of economic actors, can be
observed since the rise of start-ups and SMEs. Less fixed-term, full time employment [C3, C4,
C5] and intersecting labour division [B1, B2, B3, B6] have led to the rise of new types of job
contract in the labour market: short-term, voluntary, or part-time jobs. New expertise, such as
entrepreneurship and innovation management, emerges as the result of increasing demand for
information and knowledge in the economy. The tendency for network and collaboration has

paved way for partnership and alliance between previously competitors in the economy, leading
to physical organization for cooperation such as co-working offices and start-ups districts.
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Le Anh Khanh Minh | 201

Following the changes in rules, new products and services are born, as well as supply and, at
the same time, demand for these products and services. There are now markets for labour,
talents investments, funds, training courses, competitions and awards, as well as books and
programs on entrepreneurship and innovation to meet the trend of start-ups. Several names
and brands emerge, as do the actors behind these names: HATCH! NEST, 5DESIRE, Dreamplex
and CitiHub for co-working spaces; IDG Venture Vietnam, CyberAgent Venture, DFJ
VinaCapital, and Prosperous Vietnam Investment for venture capitals and funds; Vietnamese
Silicon Valley Project, HATCH!, Founder’s Institute, and X-Incubator for incubation programs.
There are also book titles such as Smart-up, Start-up Handbook, Zero to one, and Business
model generation; websites such as Start-up Vietnam (startupvietnam.org), Khoi Nghiep
(khoi.nghiep.vn) and Khoi Nghiep Tre (khoinghieptre.vn); support centres such as the Business
Start-up Support Centre (BSSC) and as in co-working hub providers. Media channels are also
new actors in the start-up scene: Thanh Nien New, Tuoi Tre News, VnExpress with columns for
start-ups, VTV with Start-up Trip (Chuyen xe khoi nghiep) and HTV with Start-up Cafe (Ca phe
khoi nghiep).

In essence, the entry of new actors and the formation of new markets for start-up related
services reflect an allocation of resources to the ‘new’ in the economy. In addition, there is also a
reallocation of resources towards start-ups and supporting activities. For example,
organizations, whose businesses or purposes were not related to start-ups, are now becoming
more involved in the scene. In 2015, FPT Group – a leading information technology company in
Vietnam, launched its venture capital arms FPT Venture (FPT, 2015). Life-changing books was
initiated in 2012 by CEO Dang Le Nguyen Vu and is now affiliated with his coffee brand Trung
Nguyen Group. The Communist Youth Union, Youth Cultural Centre, Women’s Union, Ministry
of Science and Technology and other governmental bodies are now offering short courses,
mentor programs and competitions for the start-up community (Van, 2012; Anh, 2017). More
widely seen, cafes, restaurants, and bookstores are investing more in their facilities and services,
such as 24/7 opening hours, broadband connection, furnishing and decorations, to target at
young entrepreneurs. Moreover, universities are now placing stronger emphasis on
entrepreneurship. Curricula and assessment now have more elements of teamwork,
communication or research skills, which are those that will be required in the real working
environment. Students are also encouraged to participate in extra-curricular activities and
university’s student clubs. Furthermore, the start-up community also witness the rise of
networks and alliances between entrepreneurs and start-ups. Competitions, co-working spaces,
incubation programs, and idea camps are where young people can meet and find like-minders.
Several competitions are commonly known among young people who wish to start-up: Viet

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202 | ICUEH2017

Youth Entrepreneurs (VYE) Bootcamp, VietChallenge, Start-up Wheel, Creative Idea Contest
(CiC), and i-Start-up.
Finally, one huge change at macro-level comes from the government and its strategic
direction. Although the concept of start-up and start-up activities has been around since early
2000s, it is not until 2016 that the Vietnamese government publicly takes innovation and
entrepreneurship into policy and planning consideration. Prime Minister Nguyen Xuan Phuc
announced 2016 to be “the year of start-up” and further stressed that never before has
entrepreneurship received much attention from the government (Do, 2016). In the same year,
Vietnamese government proposed a concept of Chinh phu kien tao, in which it aims at
encouraging innovation, providing a stable, dynamic and favourable business environment, as
well as more engagement, transparency, and accountability towards the public (Vu, 2017). In
this sense, government becomes an economic actor who not only regulates or manages but also
facilitates innovation and entrepreneurship.
Several government programs are created to foster the ecosystem of start-ups in Vietnam
(Shona, 2016c). Ministry of Science and Technology plays a leading role in Vietnam’s innovation
system, with two agencies under its management: The National Technology Innovation Fund
(NATIF) and National Agency for Technology, Entrepreneurship, and Commercialization
Development (NATECD). These two government-led programs provide start-ups and
entrepreneurs with training, mentorship, incubation and acceleration as well as financial
support for R&D activities. Vietnam Silicon Valley is another initiative of the government in
nurturing a knowledge-base economy and building network. Apart from government-led ones,
there are also programs that are in partnership with foreign and international agents. These
include The Finland-Vietnam Innovation Partnership Program (IPP), The Fostering Innovation
through Research Science and Technology (FIRST, in cooperation with World Bank) and
Mekong Business Initiative (MBI, funded by Asia Development Bank). Furthermore, a new
development plan called Fostering start-up ecosystem and innovation to 2025 was officially in

effect since 2016. Several support are proposed by the government, ranging from building startup infrastructure and research facilities, to investment in start-up education and tax incentives.
In the near future, the government pledges to develop investment procedures, legal and
statutory frameworks for venture capitals, funds, labour, and a favourable tax scheme so as to
better cope with constant, dynamic changes in the start-up environment (Anh, 2016; An, 2017).

7. Discussion and Conclusion
Taking the evolutionary perspective, the impacts of start-ups and SMEs can be seen at three
levels of analysis: micro, meso and macro. A summary table of the possible impacts can be
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C.33.44.55.54.78.65.5.43.22.2.4..22.Tai lieu. Luan 66.55.77.99. van. Luan an.77.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.33.44.55.54.78.655.43.22.2.4.55.22. Do an.Tai lieu. Luan van. Luan an. Do an.Tai lieu. Luan van. Luan an. Do an

C.33.44.55.54.78.65.5.43.22.2.4..22.Tai lieu. Luan 66.55.77.99. van. Luan an.77.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.33.44.55.54.78.655.43.22.2.4.55.22. Do an.Tai lieu. Luan van. Luan an. Do an.Tai lieu. Luan van. Luan an. Do an

Le Anh Khanh Minh | 203

found on the next page. By nature, these impacts can be explained at meso level by looking at
the changes in cognitive, behavioural, social and technical rules in the Vietnam’s socio-economic
context. Evolution of meso-level rules consequently enhances or reshapes decisions and
behaviours of economic agents in the micro-level, such as individuals and firms. At the same
time, this evolution causes movements in the overall economic systems, particularly in
industries and government planning.
Micro
[Mic1] Increase in demand for start-up related services.
-More recognition for soft skills, leading to decision to acquire soft skills through extra-curricular

activities, competition, internship, work experience.
-Higher need to collaborate and teamwork, leading to demand for co-working hubs and hi-tech districts
[Mic2] Increase in supply of soft skills opportunities.
-New services: soft skill courses, clubs organizations, co-working spaces, start-up districts, consulting,
funding, incubation, idea competition, books, websites, support centres, news coverage and television
programs.
-Change in function of existing firms and organizations to suit micro demands: cafes, bookstores,
government bodies.
[Mic3] Rise of new economic actors: Angel investors, venture capitals and their investors, incubators,
book authors, bloggers, and reporters on start-ups.
Meso
[C1] Flexible working
hours

[B1] Not clear task
division between staff

[S1] Less hierarchical
management style

[T1] Increasing use of
electronic devices

[C2] Change in
perception of workplace
to outside office hours
and online

[B2] Intersecting
functions and tasks

[S2] Decomposable
organization structure

[T2] Widespread
Internet connection

[C3] Freelancing and
self-employment

[B3] Mindset for
cooperation and
teamwork

[S3] Less substitution
view, more focus on
complementarity

[T3] Rise of platforms
for project
management and
teamwork

[C4] Job-hopping,
lower staff retention

[B4] Appraisal and
feedback mechanism

[S4] Networks of firms

and start-ups

[T4] Rise of websites,
forums, blogs for
sharing experience and
know-how

[C5] Less inclination
towards life-long career
in one single firm

[B5] Independence and
ability to work on own

[S5] Trust as an
institution for
collaboration and
exchange

[T5] Rise of ecommerce and online
marketing

[C6] More tolerance for

[B6] Outsourcing
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[T6] Better


C.33.44.55.54.78.65.5.43.22.2.4..22.Tai lieu. Luan 66.55.77.99. van. Luan an.77.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.33.44.55.54.78.655.43.22.2.4.55.22. Do an.Tai lieu. Luan van. Luan an. Do an.Tai lieu. Luan van. Luan an. Do an

C.33.44.55.54.78.65.5.43.22.2.4..22.Tai lieu. Luan 66.55.77.99. van. Luan an.77.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.33.44.55.54.78.655.43.22.2.4.55.22. Do an.Tai lieu. Luan van. Luan an. Do an.Tai lieu. Luan van. Luan an. Do an

204 | ICUEH2017

risk and failure

functions

coordination of supply
and demand for
resources

[C7] Desire to have
own business

[B7] Changes in
physical organization of
firms to open-space,
collaborative workspace

[C8] Self-starter

[B8] Natural pedagogy
and support for new

firms

[C9] More focus on soft
skills to complement
academic knowledge
[C10] Multi-tasking
rather than narrow
specialization
Macro
[Mac1] Enhancing existing rules and populations – relocation of resources in different purposes towards
start-ups and supporting activities.
[Mac2] Emergence of new coordination and organization in the economy – the allocation of resources in
the economy to the ‘new’.
-New types of jobs (fixed-term, contractual, freelance) and expertise (financial, legal, marketing,
consulting).
-Rise of network, partnership and strategic alliance.
-New market due to new demand and supply for start-up related services: Market for labour, talents,
investments, funds, training courses, competitions and awards, books, programs and so on.
[Mac3] Change in government strategic planning and direction.
-More emphasis on entrepreneur and innovation in government’s policy.
-More support in terms of funding, training, legal and statutory framework.

Figure 5. Impacts on nature of work and employment
One caveat remains in the analysis above: The impacts are only observations. This leads to a
situation where incidents are merely coincidence without any correlation between them. For
example, changes in perception of workplace [C2] may be attributed to more of a result of
technological advances rather than of the start-up and SME emergence. Similarly, increasing
use of electronic device [T1] may stem from overall trend in the world rather than from the
increasing need to communicate and cooperate. While this caveat makes up the paper’s
limitation, it can as well be, on a brighter note, topics for future papers. Further research can

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C.33.44.55.54.78.65.5.43.22.2.4..22.Tai lieu. Luan 66.55.77.99. van. Luan an.77.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.37.99.44.45.67.22.55.77.C.33.44.55.54.78.655.43.22.2.4.55.22. Do an.Tai lieu. Luan van. Luan an. Do an.Tai lieu. Luan van. Luan an. Do an

Le Anh Khanh Minh | 205

take up from these unanswered questions and expand into econometric models for these
impacts.

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