At the International Startup Forum: “Applying the Circular Economy Model in Impact Startups” on November 15, Vice President of the Vietnam Confederation of Commerce and Industry (VCCI) Nguyen Quang Vinh said his company Circular Economy is the new business model. Not only does the circular economy create many money opportunities, but the circular economy also creates new business models with millions of jobs.

This is also a solution for economic development combined with valuing and preserving the environment and ensuring social progress. It is also the mission of Vietnamese companies in the 21st century to create new value for society.

CHALLENGE COST, CAPACITY

The development of circular economy is seen as an important and irreversible direction. In particular, many developed markets have paid more attention to promoting trade development in the context of sustainable development and have incorporated commitments related to this content into new generation FTAs, such as the Free Trade Agreement between Vietnam and the European Union (EVFTA), etc.

Therefore, start-up companies must adhere to a sustainable business model from the beginning, a responsible business model, in order to move towards green growth and sustainable growth.

However, there are many challenges for startups adopting the circular economy model. Mr. Nguyen Tien Huy, Director of the Corporate Office for Sustainable Development, VCCI, pointed out that the implementation of circular economy initiatives always involves huge costs and is not easy to mobilize from the sources of capital.

Also, the ability to create and obtain technology, as well as the ability to link production in the chain.

All of this requires start-ups to clearly grasp market movements; accurate planning of business goals; prioritize technology and data statistics; select and build partnerships; Pilot operation, completion and survey.

From a business perspective, Mr. Luong Nguyen Duy Thong, founder of his hometown Agriculture Company Limited and vice chairman of Young Entrepreneurs Association of Dong Thap Province, said that the Mekong Delta is currently severely affected by the impact of climate change. If the circular economy is applied in the agricultural sector of this region, it will be a great resource that can transform the linear economy.

But the application of circular economy in enterprises in the Mekong Delta is still difficult due to the low-lying economic and transportation area, the capacity of enterprises is still limited compared to the whole country, the establishment rate of enterprises in some provinces is still difficult, because this is the hurdle that makes it difficult for companies to start a business in the circular economy model.

NEED “LIGHT” ONLY FROM POLICY

To encourage start-ups to adopt the circular economy model, Mr Thong said the mechanisms need to focus on the five words “power”.

The first is intelligence. Small and medium-sized companies and start-ups still have very little knowledge about the green economy to take advantage of opportunities from free trade agreements and environmental regulations in large markets.

Therefore, it is necessary to equip and provide more information and training courses so that companies in this economic sector have better knowledge about the application of the circular economy model in business activities.

Monday is physical strength. There should be a mechanism to link companies together, which is good material for building a cyclical chain.

Tuesday is talent. More mechanisms are needed to facilitate access to finance for small and medium-sized enterprises and startups to apply the circular economy model.

Wednesday is capacity. Many start-ups themselves in the Mekong Delta have a low level of knowledge, corporate governance, market access, etc. compared to the whole country and region. Therefore, policy should focus intensively on strengthening the capacity of companies in this area.

Thursday is the driving force. It is necessary to build motivational mechanisms for companies to engage more deeply in the circular chain and innovate in order to apply the circular economy model.

Ms. Ramla Khalidi, representative of the United Nations Program in Vietnam (UNDP), said Vietnam has emerged as the largest startup ecosystem, forming a golden triangle of startups together with Singapore and Indonesia.

“Although I have only been in this position in Vietnam for a few weeks, I am very impressed with the number of young people involved in starting a business and with a lot of consideration for the impact on the community. This shows that this is a new generation of Vietnamese entrepreneurs who are committed to a new business model and making a positive impact on people and the planet,” said a UNDP official.

In addition, Vietnam is currently a climate-sensitive country with a coastline of more than 3,200 km and many cities and deltas located below sea level. Therefore, we must consider the response to climate change.

To promote the circular economy, Vietnam needs to have a whole society approach, with stakeholders such as enterprises, agencies, institutes, schools, young companies as well as related entities, investment regulations, research and innovation to achieve common goals.

“The number of Vietnamese startups is increasing day by day. This is a very good ecosystem, but there is also a need for longer-term solutions to environmental problems,” the UNDP Vietnam representative recommended.