Overview of Entrepreneurship

TABLE OF CONTENTS
INTRODUCTION..................................................................................................................................................................... 3
PART 1........................................................................................................................................................................................ 4
ENTREPRENEURSHIP OVERVIEW........................................................................................................................... 4
WHO ARE ENTREPRENEURS?............................................................................................................................... 4
DEFINITION OF ENTREPRENEURSHIP............................................................................................................. 5
DIFFERENT TYPES OF ENTREPRENEURIAL VENTURES AND RELATION TO THE TYPOLOGY
OF ENTREPRENEURSHIP.............................................................................................................................................. 6
SMALL BUSINESS ENTREPRENEURSHIP.......................................................................................................... 6
SCALABLE STARTUP ENTREPRENEURSHIP................................................................................................... 6
LARGE SCALE ENTREPRENEURSHIP.................................................................................................................. 7
SOCIAL ENTREPRENEURSHIP................................................................................................................................ 7
THE SIMILARITIES AND DIFFERENCES BETWEEN ENTREPRENEURIAL VENTURES....................8
Similarities between entrepreneurial ventures........................................................................................... 8
Differences between entrepreneurial ventures............................................................................................ 8
INVESTIGATING DIVERSE RANGE OF ENTREPRENEURIAL VENTURES TO DEMONSTRATE AN
UNDERSTANDING OF ENTREPRENEURSHIP IN BOTH PUBLIC AND CORPORATE SECTOR......9
In public sector.............................................................................................................................................................. 9
In corporate sector...................................................................................................................................................... 9
THE SCOPE, DEVELOPMENT AND GROWTH OF ENTREPRENEURIAL VENTURES.......................11
The scope of entrepreneurial ventures.......................................................................................................... 11
Development and growth of entrepreneurial ventures.........................................................................12
PART 2..................................................................................................................................................................................... 12
HOW MICRO AND SMALL BUSINESSES IMPACT ON THE ECONOMY...................................................12
THE IMPORTANCE OF SMALL BUSINESSES AND BUSINESS START-UPS TO THE GROWTH OF
THE SOCIAL ECONOMY............................................................................................................................................... 14
Contribution of SMEs and small business toward Vietnam’s Economy..........................................14
THE DIFFERENCES MAKE BY SMALL, MEDIUM AND LARGE BUSINESSES TO THE VIETNAM’S
ECONOMY.......................................................................................................................................................................... 20
HOW SMALL BUSINESSES HAVE AN IMPACT ON DIFFERENT LEVELS OF THE ECONOMY IN A
GLOBAL, REGIONAL, NATIONAL AND INTERNATIONAL CONTEXT.....................................................22
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CONCLUSION......................................................................................................................................................................... 23
REFERENCE........................................................................................................................................................................... 24
2

INTRODUCTION
Entrepreneurship is one of the key materials used for starting any business organization
to accomplish the set goals as well as objectives. Entrepreneurship is maintaining and
managing and organization activities to start and establish a successful business. These
businesses are required in creating a profitable result for the organization to implement
new innovative ideas in practice targeting a new corner market. Entrepreneurship is the
ability to carry the risk and changing this risk into a profitable business. Entrepreneurship
is having a great scope in the countries. The market is continuously growing with
developing new trends and demands that are achieved by the implementation of new ideas
in the market to help new technological development in the countries. The small and
medium-size business is showing enormous growth and mainly contributes to the
economy of the country. This will improve the employment in-country and eventually
increases the spending capacity of the client to buy new products existing in the market.
This cycle keeps in going and continuously helps in the overall development of the
organization. The study provides an explanation of various types of entrepreneurial
ventures as well as their relation to entrepreneurship. It also presents an exploration of the
difference and similarities among the entrepreneurial ventures as well as the
entrepreneurship they carry with themselves. The study explains the importance of small
businesses as well as the start-ups on achieving the growth of the economy. The
contribution of entrepreneurship and the development of small businesses in the
organization in the local economy and national economy as well are also described in this
report. The reader will able to conclude his knowledge about the types of entrepreneurial
ventures and the typology of entrepreneurship in the following report.
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PART 1
ENTREPRENEURSHIP OVERVIEW
Entrepreneurship is the way to set up a business by analyzing different risks related to it
such as financial or managerial. The entrepreneurial ventures can have different ownership
structures and the entrepreneurs need to have certain skills and characteristics to the
development and management of a business. The experience and personal background can
have a diverse effect on the entrepreneurship that can foster or hinder a business. The
report is going to focus on different types of entrepreneurial ventures, their effect on the
economy. Additionally, the skills and mindset needed to set up a business will be
elaborated along with the ways experience and personal background can affect a start-up
business (Rushworth, 2000).
WHO ARE ENTREPRENEURS?
 People who start and/or operate a business
 Individuals who discover market needs and launch new firms to meet those needs
 Risk takers who provide an impetus for change, innovation, and progress
 All active owner-managers (founders and/or managers of small businesses)
 People who introduce a new product in an existing organization
 The owner of an enterprise who by RISK and INITIATIVE attempts to make a profit
Vietnam’s entrepreneurs: highly educated, but inward looking
The survey shows entrepreneurs Vietnam tend to be older (aged 35 and over), mostly
male, highly educated, and with little international background. Sixty-four per cent of the
entrepreneurs surveyed were aged 35 and above, 63 per cent were male, 78 per cent had a
university or college degree, and 85 per cent had no professional or academic experience
outside of Vietnam.
4

Figure 1 Profiles of entrepreneurs in Vietnam
DEFINITION OF ENTREPRENEURSHIP
 According to (Drucker, 2014), the process of entrepreneurship has been defined as
one of the most creative approaches towards business and business activities to
build, manage and lead people within the organization towards the organizational
goal. It is also significant sufficient entrepreneurship will bring forth positive change
and development for the organization. (Drucker, 2014) points out that the overall
entrepreneurial activities consist of an innovative way of developing and setting
materials, the techniques in which the developed materials are used and adopted,
and finally expand the entire process of production or manufacturing.
 Entrepreneurship is an activity which leads to the creation and management of a
new organization designed to pursue a unique, innovative opportunity (Hindle &
Rushworth, 2000)
 Entrepreneurship is about using enterprise to create new business, new businesses
and ‘’can-do’’ organizations and services (Nixon, 2004)
5

DIFFERENT TYPES OF ENTREPRENEURIAL VENTURES AND
RELATION TO THE TYPOLOGY OF ENTREPRENEURSHIP
Entrepreneurial ventures are typically focused on providing advisory services to mid-stage
as well as early-stage companies. The role of entrepreneur ventures varies depending upon
the stages of the company. The major goals connected with any entrepreneurial venture
are considered as growth and profitability and the particular business is described through
innovative and strategic practices. Entrepreneurial ventures are said to be for new and
innovative offerings. The entrepreneurial ventures have been habituated in undertaking
huge risks (Kolk, 2015). The principal aim of these entrepreneurial ventures is higher
returns on productivity as well as rapid growth.
Nowadays, entrepreneurship has grown significantly and several groups under this kind of
business have appeared. The main range of venture type mainly starts from the small
business entrepreneurship to scalable startup entrepreneurship, large scale
entrepreneurship and social entrepreneurship. The difference in producing the product
and capturing the market has made the range more important as far as the business field is
concerned. The distinctions between types are mainly made depending on the style of the
business. The entrepreneurial ventures are different in types as follows:
SMALL BUSINESS ENTREPRENEURSHIP
When it comes to small businesses, Vietnam has an immense rate in the sprout of start-ups.
Local and regional supermarkets, internet cafes and stores, consulting companies,
automobile retailers and even small-scale production houses constitutes some of the small-
business startups emerged in the last few years in Vietnam. The formations of these
companies are through few members or even as a family business model. These types of
startup businesses can only be run by the owners and the number of employees is very
low. Along with this, the revenue generations are not much and these organizations
continuously focusing on getting more customers and developing its products or services.
This kind of business can be run with family members and with friends as a partner
(Drucker, 2014).
In recent years, small business entrepreneurship is very popular. There is one individual
among three in Vietnam who has a small business regarding the business field. Small
businesses are like groceries, storefront, electrician, internet connection provider and
many more. There are more than half the people of any country who rely on small
businesses if they are not employed in the government or high-class private sectors.
Therefore, it can be said that the impact of small businesses among the employees of the
company is enormous.
6

SCALABLE STARTUP ENTREPRENEURSHIP
These types of businesses start business with innovative ideas and focus on providing
innovative products or services from the starting. These types of entrepreneurs believe
that their ideas can change the world and they search for investment from venture
investors. These organizations search for the most brilliant talent for the business and they
tend to establish a scalable business model (Kirzner, 2015).
The younger Vietnamese entrepreneurs and their venture investors mainly do the scalable
startup entrepreneurship. These businesses start their careers based on the investors and
their main motto is to change the face of the country. They attract investors from every
corner of the world to find the right path to reach the top of the market. Their main job is to
find repeatable and scalable businesses that have similarities with the business. When they
find it, they try to take the business by perfect strategies and it increases the opportunities
of taking the business to a different level of success.
LARGE SCALE ENTREPRENEURSHIP
These companies are larger comparing to the previous two entrepreneurs. When it comes
to large corporations, it has a certain life cycle; and this mainly because they acquire
growth as well as sustainability through synthesizing new services and products, and also
through the business of the persisting products and services respectively. They concentrate
on offering new products or services to the clients for the sustainability and survival of the
business. When it comes to large corporations, they are always subjected to competition;
hence they need to make their products and services accordingly with the changing
business environment and trend, and the most adaptive and effective change can be bought
forth by efficient entrepreneurs (Dees, 2017).
The demand for the clients and trends is changing finally with the competition, legislation
that required the large organization in disruptive innovation and produces new products
for a wholly new market. Existing companies only can do this by making innovation in the
current product or by producing the extended version of the products. According to
(Kirzner, 2015), the innovative and creative ability of the entrepreneur shows best during
the turning point or the imminent change. Nevertheless, it can be difficult to disruptive
innovation because of the large size of the organization.
SOCIAL ENTREPRENEURSHIP
Social enterprises are businesses with a social mission, set up to address these challenges
such as poverty, unequal access to public health and education and the need for
environmental sustainability. This type of entrepreneurship focuses on solving different
social problems by delivering their products or services. It must be said that unlike the
other two businesses, its target is to make the world a better place so these organizations
focus on creating a better world for the people and can be for-profit, non-profit. The share
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of the market or the profit is not mattered of concern for this type of entrepreneurship
(Scarborough, 2016).
In the past decade, interest in social enterprise and social entrepreneurship has become
significantly in Vietnam. It is observed that the social enterprise sector in Vietnam is
distinct, energetic and growing. There is a new wave of start-up social enterprises in
Vietnam. These are profitable businesses and optimistic about the future. They take
different legal forms and work across a range of sectors across the country. Most social
enterprises in Vietnam are on a mission to create jobs. They are helping disadvantaged
people and are training spaces for women and young people to take on leadership roles.
Approximately half of social enterprise leaders are women, compared to 37 percent of
small and medium enterprises (SMEs) more widely.
THE SIMILARITIES AND DIFFERENCES BETWEEN
ENTREPRENEURIAL VENTURES
SIMILARITIES BETWEEN ENTREPRENEURIAL VENTURES
The main similarities of the business venture are that every venture is of start-up business.
It means that the businesses of the ventures are new to the market or will appear in the
market very early. All the businesses in the venture are trying to capture the market with
the uniqueness of their products. These are the possible similarities of the ventures.
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DIFFERENCES BETWEEN ENTREPRENEURIAL VENTURES
Small business
entrepreneurship
Scalable startup
entrepreneurship
Large company
entrepreneurship
Social
entrepreneurship
OBJECTIVES
These
organizations do
not have
structured goals
and objects,
works on
achieving lesser
profitability and
growth.
These business
aims to provide
innovative
products
regularly and
reach high
profitability for
investors.
These
organizations aim
to maintain the
market by
developing new
products or
services and
marketing
strategies.
These
organizations aim
to provide quality
products or
services to make
the world a better
place.
RISKS
The risks are
lower but
competition is
high with same
sized
organizations.
The risks are high
because of the
high amount of
financial
investment and
pressure to
return a high
amount to the
investors by
achieving high
sales volume.
The risks are
medium as large
businesses
usually manage to
sell high volumes
because of their
brand value.
The risks are not
much high as
these businesses
often receive help
from the
government and
public because of
their vision.
NUMBER OF
EMPLOYEES
No more than 50
employees
Rely on structure
and size
Can be more than
1000 employees
Rely on the size of
the business
STRUCTURE
No suitable
organizational
structure and run
with individual
proprietorship in
partnership.
Mostly
corporations or
limited
partnerships.
Often
complicated and
can be public
limited or private
limited company.
Mostly
administrator
based
organizations.
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INVESTIGATING DIVERSE RANGE OF ENTREPRENEURIAL
VENTURES TO DEMONSTRATE AN UNDERSTANDING OF
ENTREPRENEURSHIP IN BOTH PUBLIC AND CORPORATE
SECTOR
IN PUBLIC SECTOR
Public sector organizations are managed by the government directly or indirectly. The
government invests a higher amount on those organizations and different private
organizations implement strategic help to those. These types of organizations have an
establishment in different sectors and aims to provide quality products or services to the
clients. These organizations do not importance on profitability rather than social welfare
and development (Baum, 2014)
IN CORPORATE SECTOR
These types of organizations work privately and can be owned by individual or the public.
These organizations develop marketing strategies to provide quality products or services
to clients to intensify their profitability and longevity of the organizations. Many large
organizations, scalable entrepreneurship ventures are connected with corporate sectors
that concentrate on sustainable development by focusing on its competitors and
developing strategies to achieve aggressive advantages (Baum, 2014)
Comparing Corporate and Public Entrepreneurs
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CATEGORY CORPORATE
ENTREPRENEUR PUBLIC ENTREPRENEUR
ORGANIZATIONAL TYPE Existing business Public sector organization
PERSON Corporate executive Public officer
MAIN ACTIVITY
Create value within an
innovate project
Create value for citizens by
bringing together unique
combinations of resources
SKILLS
Strong technical skills or
product knowledge; good
managerial skills; weak
political skills
Strong political skills; able to
develop power sources
beyond those formally
assigned; adept at using
public relations and the
media to advantage
FOCUS
Internal and external; builds
internal networks and finds
mentors or sponsors
Learns to co-opt or use
external forces to
accomplish internal change;
builds constituencies of
support among politicians,
unions, the private sector,
the media and the
community
RISKS AND FAILURE
Likes moderate risks;
principal risks are career
related: sensitive to need to
appear orderly within
corporation; hides risky
projects so can learn from
mistakes without political
cost of public failure
Calculated risk-taker; takes
big organizational risks
without taking big personal
risks by managing the
process by which risky
decisions are made: tends to
deviate from rules only
slightly at first, then
progressively more; since
failure is harder to define,
will manage events to
promote positive outcomes
COURAGE AND DESTINY
Self-confident, optimistic,
and bold; cynical about the
system but believes he/she
can influence/manipulate it
Self-confident, optimistic,
and bold; high tolerance for
ambiguity; uses ambiguity as
a source of managerial
discretion
(Zerbinati & Souitaris, 2005)
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THE SCOPE, DEVELOPMENT AND GROWTH OF
ENTREPRENEURIAL VENTURES
According to (Kuratko, 2016), the vision, mission, and goals of different entrepreneurial
ventures are different that affect the scope of those organizations. If those organizations
can improve products that can fit the demand of the clients, then they can maintain for a
longer time by creating profitability. The entrepreneurial ventures need to concentrate on
growth by making investments and plan to develop their products or services in suitability
with popular trends and demand. In the opinion of (Storey, 2016), those have to develop an
efficient organizational structure that can improve communication with different
departments to run its regular activities. The growth of different entrepreneurial ventures
is dependent on the quality of products and services, how much they can fit the demand of
the clients, pricing and sustainable strategies.
THE SCOPE OF ENTREPRENEURIAL VENTURES
Entrepreneurship as a profession gives an immense job satisfaction and a sense of
independence. It’s a great career option and has become one of the favorites for
Vietnamese students. These days more and more students are opting for entrepreneurship
as a career option.
Starting their own business is the first choice but even if they are not willing to start their
own business still there are various options available to use their entrepreneur degree and
skills. Mentioned here are the few other options which can be considered while opting for
this Entrepreneurship degree.
 Business Consultant
 Small Business Owners
 New Venture Developers
 Development Officers
There are a various job and business options for students who have completed their degree
in entrepreneurship. Few of the areas are mentioned here: Sales, Marketing, Mid-level
management, Finance Analyst, Office Administration, Accounting, jobs in industries,
Business Reporter.
It can be said that there are ample scope and opportunities for the young entrepreneurs in
Vietnam. Such opportunities will help small business owners to remain self-employed. This
will also help as a key development factor to fight against unemployment.
DEVELOPMENT AND GROWTH OF ENTREPRENEURIAL VENTURES
There are several kinds of business firms that focus on business development activities.
Startup businesses are particularly concerned about developing business opportunities
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with support from innovation. The company that contains start-up values is commonly
focused on offering unique and innovative products so that customers can be attracted to
such change. These companies are focused on increasing innovative products as well as
earning a better profit boundary. Besides, it can be said that small-scale businesses are
ordinarily referred for companies that also focus on profit boundary (Kerr, 2013). These
kinds of businesses are frequently run on a limited scale of the market. Social scale
organizations are referred to as non-profitable a business that helps in efficient
consideration of social development. They regularly try to spread the cost of operations
and make sure that their services are benefitting society.
PART 2
HOW MICRO AND SMALL BUSINESSES IMPACT ON THE
ECONOMY
Small and medium-sized enterprises (SMEs) founded by younger entrepreneurs (aged 34
and under) are more likely to be innovative and use technology, be aware of impacts on
environmental sustainability, and hire employees with post-secondary education and
international experience.
In Vietnam, SMEs are officially defined by the Government as enterprises with chartered
capital of under VND55 billion and fewer than 200 staff. In 1998 there were more than
30,000 registered enterprises in Vietnam, including more than 23,000 non-state
enterprises. Of these registered firms, approximately 22,000 were SMEs. SMEs in Vietnam
account for 87.7 percent of the number of State firms, 30 percent of joint ventures, and 96
percent of total private firms in Vietnam (Central Institute for Economic Management,
1998).
SMEs have played an important role in the national economy. The sector has long been a
major source of employment generation accounting for about 85 percent of the total
corporate workforce in 2004 (LeXuanBa, 2006). SMEs are a main vehicle for poverty
alleviation particularly in rural areas and narrowing development 328 gaps among
provinces, urban, and rural areas. In addition, SMEs help maintain the high flexibility of the
labor market. It also contributed significantly to absorb the “shocks” associated with the
transition from a centrally planned economy to a market-oriented one especially the
collapse of the socialist bloc in Eastern Europe (LeXuanSang, 1997).
According to results of Economic Census in 2017 by General Statistics Office of Vietnam
(GSO), around 98% of all companies in Vietnam are classified as a SME. Of SMEs around
75% are considered as micro-sized enterprises (such as small restaurants and small
agricultural businesses) with a total market size of 97billions USD, it is a major part of the
13

Vietnamese economy, however the net result of these companies records a negative of
1.2billions USD in profits. The low profitability of micro-enterprises is due to operational
inefficiencies and lack of strategic direction. These companies also have difficulties
attracting capital as a lack of organization and professionalism make them a high-risk
investment with small potential for scalability.
(GSO)
There is no exact data indicating the number of SMEs in Vietnam but researches show
SMEs account for 98% of total number of enterprises in Vietnam. SMEs use 50.1% of the
labor force and contribute over 40% to the country’s GDP. SMEs have also provided
employment for about 3.4 million people. Number of new enterprise for each year
continued to grow in the last 10 years. In 2000, there were 14 453 newly established
enterprises. This number was estimated to be more than 7 times larger in 2010. Until
December 2010, the total number of enterprise in Vietnam was about 520,000.
14

Figure 2 Newly established enterprises from 2000 to 2010
The growth of small businesses nowadays is supporting the economy of the country in a
huge way. Though the amount of the profit of the small businesses is less, the number of
small businesses promotes the start-up business is uncountable in a country. Therefore it is
actually clear that small businesses are affecting the economy of the place in a positive way.
In the period of 2008-2012, there was a significant rise in the number of enterprises being
active, reached approximately 347,000 companies. These SMEs can be state-owned, non-
state-owned, or foreign invest and working in several sectors but their contribution to the
country is undeniable. First, the establishment of a firm will create jobs for people, which
can affect the GDP in a good way. Thus, firms take responsibility for the insurances of
employees, union fee as a way to reduce the social security burden for the government.
Secondly, a direct dedication of enterprises to the state budget is through taxes. The total
contributions of SMEs in 2012 were estimated to be 34.26% of the whole business sector.
Also, the growth rate in taxes by SMEs was higher than the overall rate (VSIC, 2007).
Accordingly, the Vietnamese government has paid more attention in supporting SMEs by
creating a business environment to enhance the potential advantages of this sector.
SMART CANE FOR THE ELDERLY – VIVIAN
Nowadays, our country has witnessed remarkable demographic changes culminating in the
emergence of aging populations and life longevity phenomena. Vietnam's number of
elderly, exceeding the age of 65, reached 10.3 million in 2010 and is expected to attain 20
million by the end of 2020, and 40 million by 2050. Projections for 2150 have shown that
the proportion of elderly people is expected to represent the third of the Vietnam
population, which makes the goal of maintaining healthy aging a priority at the national
level. In a bid to improve the elderly living conditions, several solutions integrating new
15

technologies within the health system have been proposed by a specialist in e-healthy. This
new field of research is intended to help grant a privilege to users by facilitating life and
making it rather convenient. In this context, the members of Group 4 with the help of
students at the Technical Pedagogical University came up with an idea and conducted a
project called ‘’a smart cane to support the elderly’’ to create the best conditions for the
lives of the elderly. The traditional stick does not fulfill the requirements of the modern
world. Our stick comprises of sensors and Bluetooth module to allow it to communicate
with a smartphone and make it effective.
Currently, the proportion of the elderly in our country is reaching an alarming rate, while
social welfare, as well as medical care for them, has not been pushed up. They are facing
health risks such as stroke, stroke, difficulty in moving or in the process of rehabilitation.
Such elderly situations affect not only themselves but also their families. The problem is
extremely urgent when their families are always working in a state of worry for their loved
ones themselves, not focusing on work that reduces the effectiveness of society. Traditional
sticks cannot help them detect the health and safety of relatives at home. It is outdated.
Therefore, it is necessary to update it with today's technology.
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THE IMPORTANCE OF SMALL BUSINESSES AND BUSINESS
START-UPS TO THE GROWTH OF THE SOCIAL ECONOMY
CONTRIBUTION OF SMES AND SMALL BUSINESS TOWARD VIETNAM’S ECONOMY
To sustain the growth of the social economy, start-up businesses have an important impact
in different countries. The startup businesses often come with innovative ideas of products
and services that can fit certain demands the people comparatively other businesses.
Moreover, sometimes startup businesses can capture the market very quickly and managed
to create higher revenue in a very short time. In this process, those businesses need to
provide a high amount of business tax that can be helpful for the growth of a country.
Besides, to run a business, startups hire people which can reduce unemployment in a
country (Baum, 2014). Many startups cannot afford high salaries to the employees because
of lack of capital and those hires some of the lesser skilled employees with lower salaries
that are also helpful in decreasing the unemployment problem.
Many startups are connected with different types of activities related to social,
environmental and economic problems to enhance the brand value. In this program, those
businesses provide education to the people in rural areas or people with poor financial
background. Those people can apply that education in the future to get work that is also
effective in economic growth. Furthermore, there are a large number of startups
businesses are established in different industries in Vietnam, which have a high
contribution to the GDP of a country.
CONTRIBUTION OF SMES BY REVENUE
Net revenue of SMEs increased by 1.7 times in 2008-2012, from VND 2,974,326 billion in
2008 to VND 5,032,576 billion in 2012. However, in terms of percentage of total net
revenue for the whole business sector, net revenue of SMEs tended to decline, from 53% in
2008 to 43% in 2012. Although their revenues increased in absolute terms in last 5 years
but earnings before tax of SMEs was only VND 48,110 billion in 2011, down nearly half
compared to 2010 (VND 80,588 billion) and this number continued to decrease 50% in
2012 compared to 2011 (VND 22,819 billion). This is a notable indicator of business
performance of SMEs (White Paper, 2004).
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Table 1 Revenue and profit of enterprises in 2008-2012
2008 2009 2010 2011 2012
Business capital of the
whole business sector 5,888,053 7,936,671 10,841,067 13,622,801 15,697,950
Business capital of
SMEs 2,723,008 4,197,475 4,681,677 5,396,536 5,930,800
Net revenue of the
whole business sector 5,593,946 5,956,245 7,773,984 10,706,286 11,509,089
Net revenue of SMEs 2,974,326 3,351,404 3,641,191 4,673,543 5,032,576
Net revenue from
business of the whole
business sector
5,384,268 5,785,146 7,487,724 10,301,985 11,120,756
Net revenue from
business of SMEs 2,869,669 3,272,300 3,466,498 4,578,538 4,831,696
Earnings before tax of
the whole business
sector
244,033 320,698 356,301 334,407 314,289
Earnings before tax of
SMEs 36,579 78,386 80,588 48,110 22,819
(Business performance of enterprises by Vietnamese standard industrial classification, VSIC 2007,
Statistical Yearbook 2012, the General Statistics Office)
CONTRIBUTION OF SMES BY TWO FIRM SIZE CLASSIFICATION
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Enterprises are categorized into different groups. It can be seen from Table 2 that most of
the micro- and small-sized enterprises in terms of labor are small-scale enterprises in
terms of capital. Similarly, large-sized enterprises in terms of labor are often medium and
large-scale enterprises in terms of capital. However, there are differences in the share of
medium-sized enterprises in terms of labor and capital. In particularly, micro and small-
sized enterprises in terms of labor account for a large proportion of medium-sized
enterprises in terms of capital, while approximately 50 percent of large-sized enterprises in
terms of capital is small-sized enterprises in terms of labor in 2015.
Table 2 Distribution of enterprises by two firm size classifications, 2006-
2015 (%)
(The Authors’ Calculation from Vietnam Enterprise Census)
It can be seen from the table 2, there is a worth noting point that compared to 2006, the
proportion of small-sized enterprises in terms of capital fell rapidly, by 20 percent; while a
similar increase was mostly observed in medium-sized enterprises in 2015. In terms of
labor, the growth rate of micro- and small-sized enterprises was much higher than that of
medium- and large-sized enterprises.
CONTRIBUTION OF SMES BY INDUSTRY
19

In terms of employment, the number of employees working in these industries shows the
labor shift from agriculture, forestry and fisheries, and manufacturing industries to service
industries. Furthermore, in the 2006-2015 periods, there was a dramatic growth of capital
in services and slight increase in agriculture, forestry and fisheries, and manufacturing
industries, which led to the declining capital share of these industries in the total capital of
SMEs
Figure 3 Distribution of employment and capital of SMEs by industry, 200 6-
2015 (%)
(The Authors’ Calculation from Vietnam Enterprise Census)
20

DISTRIBUTION OF SMES BY ECONOMIC REGION
Because of being the two largest socio-economic centers of Vietnam, most SMEs are based
in the Southeast and Red River Delta regions. According to The Authors’ Calculation from
Vietnam Enterprise Census, the total number of SMEs is located in the Southeast and Red
River Delta is 42.87 percent and 42.47 percent, respectively. The figures for the Red River
Delta and Southeast are approximately 42 times higher than that of the region with the
lowest percentage of SMEs-Northwest (0.44 percent). This suggests that there is
considerable scope for an expansion of SMEs in the north of the country, where in the past
State-owned enterprises have traditionally dominated.
Table 3 Distribution of SMEs by economic region in 2015
REGION PERCENTAGE
Red River Delta 42.47
Northeast 2.17
Northwest 0.44
North Central Coast 3.38
South Central Coast 3.91
Central Highlands 0.95
Southeast 42.87
Mekong River Delta 3.81
TOTAL 100.0
(The Authors’ Calculation from Vietnam Enterprise Census)
Additionally, concerning particular province/city, Ho Chi Minh City and Hanoi collectively
are the home to more than 50 percent of total SMEs. Other provinces with a considerable
number of SMEs are Hai Phong, Da Nang, Dong Nai, and Binh Duong. With other regions,
although the number of SMEs has been increasing, the proportion is low and tends to
decrease over time. This is related to the overall trend of the total business sector in
Vietnam: expanding business in Hanoi and Ho Chi Minh City areas.
21

Figure 4 Distribution of SMEs by province, 2015 (thousand enterprises)
As discussed above, the small businesses in Vietnam play a very significant role in the
economic growth and sustainability of the country. A larger percentage of the populations
within Vietnam are employed or in other words working in small-businesses and these
small-enterprises act as a core generator of employment in the industry. With this
employment, the flow of cash within the economy becomes and effective (Lewis, 2013).
Many of the small businesses, which became successful and also emerging, are opening up
significant opportunities for the local and regional population of Vietnam. With these facts,
information and data discussed, it becomes clear that small-businesses are without a doubt
one of the main components and spine for the economic growth and sustainability in
Vietnam. Many startups are associated with different types of CSR activities related to
social, environmental and economic problems to enhance the brand value. In this
22

procedure, those businesses provide education to the people in rural areas or people with
poor financial background. Those people can use that education in the future to get work
that is also helpful in economic growth.
THE DIFFERENCES MAKE BY SMALL, MEDIUM AND LARGE
BUSINESSES TO THE VIETNAM’S ECONOMY
Vietnam enterprises are classified into 4 groups according to labor size, capital size and
economic sector, specifically including: micro, small, medium and large enterprises as
described in table below
Table 4 Classification of enterprises in Vietnam
Sector
Micro
enterprises
Small
enterprises
Medium
enterprises
Large
enterprises
Labor Labor Capital Labor Capital Labor Capital
Agriculture,
forestry and
fishery
<= 10
Over 10
under
200
<=20
billion
Over
200
under
300
Over 20
under
VND 100
billion
Over
300
Over
VND
100
billion
Industrial
and
construction
<= 10
Over 10
under
200
<=VND
billion
Over
200
under
300
Over 20
under
VND 100
billion
Over
300
Over
VND
100
billion
Trade and
services <= 10
Over 10
under
50
<=VND
billion
Over 50
under
100
Over 10
under
VND 50
billion
Over
100
Over
VND 50
billion
(White Paper, 2004)
According to data released by the General Statistics Office, sorting by labor size, among
324,691 active enterprises, there are 216,732 micro enterprises; 93,356 small enterprises;
6.853 medium enterprises and 7,750 large enterprises. Group of micro enterprise
accounted for 66.75%, group of small enterprises: 28.75%, medium enterprises: 2.1% and
large enterprises: 2.4%. In total, the number of micro, small and medium enterprises
accounted to 97.6% (General Statistics Office).
In Vietnam, the number of small and medium businesses is high compared to larger
organizations. The small and medium-sized businesses have captured a larger part of every
industry and contribute to the economy of Vietnam highly. However, the larger businesses
earn the high revenue solely by providing quality products and services and due to their
brand value. Many large businesses of Vietnam have an establishment in different countries
23

that is helpful in earning foreign currencies. The larger businesses consist of different
operational activities and they employ a higher number of candidates compared to other
organizations. The large organizations also spend a higher amount on CSR activities in a
country (HoSyHung, 2017).
The small and medium-sized businesses focus on providing innovative products to the
customers to gain attraction and enhancement of business growth. Those businesses also
export higher volumes and also employ the high number of candidates in Vietnam that are
helpful in reducing unemployment.
Figure 5 Contribution of different sized businesses to total population,
employment and turnover, at start of 2016
(Schaper, 2016)
According to the graph, the number of small and micro businesses is much higher than
medium and large businesses in Vietnam. Small and micro businesses gain 33% of turnover
and contribute 48% of employability throughout Vietnam. Therefore this type of business
can be considered as a vital element that assists in the economic growth in Vietnam.
24

HOW SMALL BUSINESSES HAVE AN IMPACT ON DIFFERENT
LEVELS OF THE ECONOMY IN A GLOBAL, REGIONAL,
NATIONAL AND INTERNATIONAL CONTEXT
The small businesses in the Vietnam have a diverse effect on the economy of the country at
different levels. According to (Drucker, 2014), at the regional level, small businesses can
compete with the same types of businesses by providing quality products and services that
can fit the demand of the clients more efficiently. Those businesses are focusing on hiring
employees with lesser salaries due to lack of finance and employ people who have lesser
skill set compared to others, which is necessary for reducing unemployment. As argued by
(Kirzner, 2015), at the national level, that organization can expand to different areas of a
country and enhance revenue generation that enables them to provide higher tax for
development of the country. On the global and international level, many of the small
organizations export their products and services and set up offices in different countries. It
is helpful in earning foreign currency that contributes to the growth of the country.
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CONCLUSION
From this report, it can be concluded that entrepreneurship is having a great impact on the
economic development of the company. Various types of entrepreneurs whether it is
women entrepreneurs or men, lifestyle or social all are having some common
characteristics like risk bearing capability, consistent with their work, confident and also
motivated for the success of the new idea. The report explores the concept of entrepreneur
and entrepreneurship in an extensive way. It also discusses the contribution of business or
entrepreneurial ventures towards the growth of the region as well as for the nation.
Besides, the report also conducted a detailed study of the quality of entrepreneurs and
entrepreneurship. The startup businesses can be different types such as small, micro,
medium and large businesses. The small businesses capture a large part of every industry
and have a high contribution to the economy of a country. Therefore, entrepreneurs need
to have a certain skill and mindset to set up and run a business by considering different
risks.
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