Start up in university and the university enterprise partnership

In 1810, he íòunded the University of Berlin with a diíĩerence from other universities at that time being that it shiữed its íòcus to research and made research a vital factor for educat

ICECH2016 - ỉntenĩational Conference on Emeỉ-ging Challenges: Partnership Enhancement

START-UP IN UNIVERSITY AND THE UNIVERSITY-ENTERPRISE

PARTNERSHIP

Dinh Van TOAN and Nguyen Phuong M A I1

Abstract

Start-up in universities and university - enterprise partnership is becoming a very popuỉar trend ỉn the world, especially

in d e v e lo p e d c o u n tr ie s s in c e u n iv e r s itie s p r o v id e a b u n d a n t s u p p ĩy o f id e a s, k n o w le d g e a n d te c h n o ỉo g y f o r th e In d u stries

and societal needs, and at the same tỉme human resources, equipment and workspace are readily avaỉlable in universities ưniversity has the role to create an environment o f innovation, and to encourage entrepreneurship In retum, entrepreneuriaỉ activities heỉp to promote and tighten the effective and sustainabỉe connectỉon and cooperation between the university and enterprìses that contributes to the optimal utilừation o f university resources fo r socioeconomic development In recent years in Vìeừiam, startup in universities is increasingỉy attracting attention from the relevant stakehọlders Various programs, projects and initiatỉves have begun to be implemented wìth the expectation that more start-ups wilỉ succeed This paper discusses the issue o f start-up in universities and its role to promote the cooperation between universities and enterprises Based on theoreticaỉ arguments and the current síatus o f actuaì start-up activities in universities, the authors analyzed more cỉearly the contribution o f start-up in university - enterprise partnership It is shown in this paper that the resuỉts o f start-up activities in Vietnam in generaỉ and in universitỉes in particular are very lỉmited, thus its role is stiỉỉ insubstantial Notably, the authors suggest several/easibỉe solutions and recommendations aiming at promoting start-up activities, at the same time enhancing the effective parừiership between unỉversitỉes and enterprises in Vieừiam.

Keywords: Start - up in university, ưniversity - enterprise partnership

Tóm tắt

Khởi nghiệp và hợp tác vói doanh nghiệp tại cảc trườỉig đại học đang trở thành một xu hướng khả p h ổ biến trên thế giới, đặc biệt là ở các quôc gia đã phát triển, bởi các trường đại học luôn ỉà ngiiồn cung cấp dôi dào các ỷ tường, tri thức, và công nghệ phục vụ cho các ngành công nghiệp và nhu cẩu xã hội, lại là nơi săn có các nguôn lực về con người, trang thiết

bị, không gian làm việc Đại hoc có vai trò tạo mỏi tivờng đổi mới sang tạo, khích lệ tinh thằn khỏi nghiệp Ngược lại, hoạt động khởi nghiệpgiủp thúc đẩy và thắt chặt hơn mối liên kết và hợp tác hiệu quả, bền vững giữa nhà trường với doanh nghiệp,góp phần khai thác tối ưu các nguồn lực cùa nhà trường cho sự phát triển kinh tế - xã hội Tại Việt Nam trong những nâm gần đày, khởi nghiệp trong trường đại học đang ngày càng thu hút nhiều hơn sự quan tâm của các chủ thể cỏ liên quan M ột số chương trình, dự án và nhiều sảng kiến bắt đầu được triển khai với kỳ vọng ngày càng nhiều doanh nghiệp khởi nghiệp thành công Bài viết này bàn vê vắn đê khởi nghiệp trong các đại học và vai trò của nỏ đối với thúc đẩy hợp tác giữa nhà trường và doanh nghiệp Dựa trên các luận chứng lý thuyết và thực tế hoạt động khởi nghiệp trong trường đại học hiện nay, nhóm tác giả phân tích rõ đỏng góp của khới nghiệp trong hợp tác đại học - doanh nghiệp

và đưa ra các kiến nghị nhằm thúc đầy hoạt động này, góp phần tầng cường hợp tác hiệu quả nhà trường và doanh nghiệp

ở Việt Nam hiện nay.

T ừ khóa: khởi nghiệp ứong trường đại học, hợp tác đại học - doanh nghiệp

1 School o f Economics and Business (ƯEB), VNƯ Hanoi

ỈCECH2016 - ỉnteniational Conference on Emerging Chalỉenges: Partnership Enhancement

1 START-UP AND UNIVERSITY - ENTERPRISE

PARTNERSHIP

1.1 University - enterprise partnership

The idea o f connecting university - enterprise was

initiated by the German philosopher Humboldt

Willhelm According to Humboldt Willhelm, besides

education, universities must also have the íimction o f

research and collaborate with industries In 1810, he

íòunded the University of Berlin with a diíĩerence from

other universities at that time being that it shiữed its

íòcus to research and made research a vital factor for

education activities that contributes directly to social

and economic development, especially the

development of the íields o f technology for both

civiỉian and military purposes, contributing to

Germany becoming the most powerful country in the

world

As the role o f technology in the development process

becomes increasingly more important and has more

positive contributions, the connection between

universities and enterprises also becomes the

development trend Many universities around the world

have studied ứie model that Willhelm Humboldt

proposed to focus on developing connection and

collaboration with the industries to form the

development triangle: Government - ưniversity -

Enterprise Some íòrms o f this partnership is presented

inTable 1

1.1.1 The roỉe o f each component in the university —

enterprise partnership

In many countries, the competitive advantages o f a

number of major universities in combining education

and research have created links between universities

and enterprises; created the innovated system o f

three-dimensional spiral * model represents the

relationship: govemment - university - enterprise The

development o f this relationship depends on the

viewpoints and policies o f the components mentioned

above:

For the govem m ent: In developed countries, most

economically beneíĩcial technological improvements

are all related to universities through education,

knowledge sharing and collaboration with industries

The connection facilitates universities and enterprises

to jointly participate in research and development

(R&D); thus the technological products o f universities

constantly increase, are commercialized and the role o f

universities for enterprises is highly regarded

Govemments in developing countries often imitate

developed countries in the formulation o f national

policies to promote research activities in universities,

creating links among universities and between

universities and industry The development strategies

o f high quality human resources and technological

innovation are promptly used by the govemment,

which address questions such as: how much investment

for higher education, how to allocate budget for universities policies to support and encourage the universities and enterprises collaboration in R&D and the transference, commercialization o f R&D results,

which area o f Science and technology that we need to

íòcus on developing, the extent o f university autonomy, suitable policy system is critical for the universities competitiveness, creates strong linkage between universities and enterprises

In the ƯK, since the 1990s the govemment has begun

to take steps to encourage collaboration between universities and enterprises, as represented by the establishment o f Department for Innovation, ưniversities and Skills (DIUS) and later became Department for Business, Innovation and Skills (BIS)

In addition, organizations such as the Higher Education Innovation Funding (HEIF) and Research Councils

(RCs) also are great sources of Capital support for the

collaboration activities between universities and enterprises (Wilson, 2012)

For enterprises: The govemment policies ha ve a major impact on the development potential o f universities to conduct research projects However, the decision to create partnerships and put them into practice is made

by enterprises In many countries, particularly ones with developed industry, R&D activities are usually only carried out by large enterprises Small enterprises

invest only a small amount o f Capital for research

activities; focus on Products quality control system,

Consulting services or set up some smali laboratories

With the aim o f reducing research cost, expanding the scope o f operations, opening up more technological development choices, large companies can choose to takeover small and medium-sized companies or

cooperate with universities — research and application

centers where they search for new knowledge, technologies and applications Enterprises need the cooperation from universities to rapidly innovate technology, stay at the forefront o f R&D or to solve engineering, environmental and technological problems which reality poses with short completion time, aíĩòrdable cost and a solid team o f professional (Tran Anh Tai & Tran Van Tung, 2009)

One of the large enterprises that have been actively investing in R&D collaboration with universities is IBM As early as 1956, the Zurich Laboratory was established, dứectly organized and participated in numerous cooperation projects with universities throughout Europe And in 2011, IBM along with Swiss Federal Institute o f Technology in Zurich (ETH Zurich) established the Binnig and Rohrer Nanotechnology Center, with the main research goal o f developing Nano structures to develop energy technology and míòrmation technology (AISBL

2012).

For the universities: The business environment, legal

envừonment in industrialized countries or developing countries is the main reason forcing universities to

ICECH2016 - International Conference on Emerging Challenges: Partnership Enhancement

hange the administrative management activities

ưniversities must commercialize research Products,

natented inventions; connect to entrepreneurs to

accomplish this goal Traditional educators assume

regardmg commercialÌ2ed goals too highly will make

the quality of education fall and reduce the university

rankỉng But the facts have shown that most

úniversities that are reputable in education are also

leaders in research, technological transference

Thereíòre, the links between universities and

enteiprises tend to be extended In industrialized

countries, there was even competition between

universities to attract students, research resources,

human resources for research and to cooperate with

enterprises

Ị 1.2 Beneỳìts fo r university and enterprise

In today's world, knowledge and technology are the

key factors to increase the added value, promote the

development of production and improve the ability to

meet the requirements o f production and consumers

Meanwhile, universities are research and application

centers, where people seek knowledge, new technology,

new application Therefore, the combination and

cooperation between enterprises help to exploit the

strengths of each party to operate more eíĩĩciently

Enterprises that want to survive and thrive in a

competitive environment need to constantly improve

technology, product quality in order to reap the highest

profíts For enterprises to develop fast, sustainably and

enhance competitiveness in the market, the important

action is to search for inventions, patents, the Products

of Science and technology that have feasibility (Ha Van

Hoang, 2011) ưniversities oíten own the basic

research results that enterprises need For raany

enterprises, the use o f existing research results o f

universities on the basis of the research contracts will

be the fastest way to bring eíĩĩciency to production and

business activities, and at the same time be the least

costly, rather than proceed to rebuild inửastructure or

to organize research by themselves

In addition, cooperation between universities and

enterprises is considered the model of combined

research and production, has been in developed

countries successũilly applied The fmal product of the

research process is owned by parties, enterprise and

university, to share proíits In the course of this

collaboration, enterprise can beneíĩt from the creation

of new products with high competitiveness, and proíit

when selling new Products to the market (Ha Van Hoi,

2011).

For universities, cooperation will promote and enhance

the quality o f researches, confirm the value of

scientiỗc work, enhance the reputation and brand of

the school The research prọịects of universities will

have a realistic environment for comparison and testing,

thus the íurther increase their applicability in

production In addition, cooperation with other

enterprises is the method to mobilize resources from

businesses to cater school activities such as competency building for staff, lecturer, and researchers through the collaborative research activities Even the universities themselves were forced to innovate and adjust teaching and researching to meet the actual demands o f society to provide opportunities for the transĩerence o f research results to be faster (European Commission, 2007) The university students will then have broader career opportunity

For enterprises, the cooperation with universities will provide the opportunity to obtain high quality human resources, meeting the demanđs o f business production; maximize mobilization o f intellectual resources o f universities to seize and innovate technology Besides, the largest beneíit for enterprises when collaborating with universities is the revenue from the commercialization o f research Products, inventions originated from universities

(Source: Rohrberck & Amoỉd, 2006)

The modem education experts, especially those in the

ưs believe that cooperation between universities and enterprises is inevitable The university with more valuable research programs will also attract good students and fiinding from companies The innovation activities o f the university will help the local economy grow, create new jobs and attract talented people

working in the íĩeld o f Science and technology to the

university This link contributes heavily to the enhancement o f competitiveness for universities and enterprises, while bringing huge beneíỉts to society

1.2 Start-up in university and its role in university - enterprise partnership

Even though there is progress in the academic world regarding the interest for start-up research, there is no uniíying deíinition that precisely describes the start-up term In fact there is no deíinition upon which two entrepreneurs or investors will agree on (Ries, 2011) However, many authors (Ries, 2011; Robehmed, 2013; Pope, 2014; Blank, 2013) connect the term start-up with the word “uncertainty”, or to be more precise: it is

Tabỉe 2: Motives for university - enterprìse partnership University Enterprise

Promote education activities Search for modem

technology Financial resources/íunding Access to laboratory Source o f knowledge and

verifĩed data

Human resources / cost reduction

Political pressure Risk sharing in basic

research Enhance credibility Stability o f long-term

research project Job opportunities for

graduates

Recruitment channel

1CECH2016 - Intemational Conference on Emerging Challenges: Partnership Enhancement

a new venture that tries to solve a problem where there

is no obvious solution and no guaranteed success

In addition, Blank (2013) defines a start-up as a

“temporary organization designed to search for a

repeatable and scalãbỉe business model” This is a useỉul

deíinition as it illustrates that a start-up is not simply a

small version of a large and established company, it is

instead a transient State an organization goes through

when attemptmg to determine what the organization is

going to do (i.e., what value or Service will it provide

and monetize)

A start-up can be represented by any business that is

created under conditions o f extreme uncertainty

whether it is for-profit, non-profit, venture-backed

company or govemment agency

Establishing a start-up in university is an emerging

trend in recent years as a response to the demand of

university-based entrepreneurial activity to enhance

university - enterprise partnership There are three

main ways that universities motivate university-based

entrepreneurial activity: (1) sell the rights to the

innovation, (2) license the rights to the innovation, and

(3) arrange for an equity positìon in the venture

(Giannisis et al 1988; Wilson and Szgenda 1988) In

recent years, universities have shown a growing

enthusiasm for the more risky forms of entrepreneurial

activity, namely, forming start-up companies around a

university-developed technology or licensing to small

private firms rather ứian through the traditìonal

commercialization route with large public companies

These companies in universities are so called

university start-ups or spin-off companies

The beneíits to the university of spin-off activities can

be significant Private ventures are becoming an

important source o f fimds for universities, especially in

times when federal grantsYor research and enrollments

in graduate schools are down (Doctors 1969) In 1987,

licensing fees amounted to $6.1 million for Stanford

University, $5.4 million for the University of

Wisconsin, and $3.1 million for the Massachusetts

Institute o f Technology Ợereski 1988) Doutriaux

(1987) concludes that university spin-out companies

are eíĩĩcient university-industry technology transfer

mechanisms as well as a source o f revenue Spin-out

companies, according to some, also provide a dynamic

atmosphere for promoting established research results,

a positive iníluence on emergent research, a positive

iníluence on teaching, a fertile area for graduate

assistants to conduct research, and an increase in the

perceived presence o f the university in the community

(Rogers and Larsen 1984; McQueen and Wallmark

1988) Thus, the collaboration between university -

enterprise is tightened when both parties reap beneíits

from start-up activitíes in university

To strengthen the cooperation with enterprises and the

industry in general, universities implement the solution

and diíĩerent methods o f promoting start-up such as

constructing technology incubators, establishing

start-up centers and technology transfering oÊBces (TTO) These activities are also known collectively as the supporting and promoting stait-up in universities activities, through which their role in strengthening the relationship between the two entitíes becomes more eỄBcient:

• Constructing technology incubators: with the role

of providing business incubation services for lecturers, staff and students, this activity encourages the establishment and development of enterprises using university technology The services oữered often include renting out places for a điscount or even for free; help enterprises connect with íunding organizations, venture

Capital and consultants; providing enterprise

management services;

• Establishing Start-up Center: the task of expanding start-up training program for all students in the university, especially students of engineering, information technology and basic Science Graduate students can participate in elective courses or courses on how to commercialize theừ research results Activities of the center will connect and build networks among enterprises, venture investors; grant newly established companies’ access to extemal venture

Capital;

• Establishing technology transferring office This oữice has closer relationship with irivestors, focusing on expansion of relationship and the promotion o f technological results in in the market by prioritừe licensing patents for newly established enterprises Through the support of venture activities, the program was implemented, allowing scientists, university students to commercialize theứ inventions and new ideas Other forms o f promoting entrepreneurship in universities mentioned above are also meant to

strengthen the cooperatìon between university -

enterprise, will lead to the íòrmation o f start-ups in university and increase the likelihood o f success of these start-ups

2 DISCUSSION AND M ANAGERIAL

EMPLIC ATION s 2.1 University - enterprise partnership in Vietnam

In Vietnam, the cooperation between universities and business is not anýứiing new This issue has been

raised many years ago in the vvritten statement and

resolutions o f the Communist Party and the Government: universities should be the centers of scientific research, technology transferring and application into production and life (Resolution o f the 2nd Conference, The 8* Central Committee o f the Communist Party o f Vietnam); Implement strong cooperation between enterprises, establishments hữing

ICECH2016 - International Conference on Emerging Challenges: Partnership Enhancement

employees, training institutions and the Government

for the development o f human resources according to

the needs of society (Economic development strategy

2011-2020, approved at the 11* National Congress of

the Communist Party); regard enterprises as the center

of applicable innovation and transference of technology,

which is the most important demand o f the Science and

technology market (Resolution o f the 6th Conference,

The l l * Central Committee o f the Communist Party of

Vĩetnam on development & technology to serve the

cause o f industrialization and modemization o f

socialist-oriented market economy and intemational

integration) However, the implementation o f the above

policies still face many diữĩculties and the results are

very limited.

Research results in 8 universities participating in the

Profession - Oriented Higher Education Project

deployed by the Ministry of Education and Training

(POHE) showed that co-operation between universities

and business has not been much developed Most

universities primarily establish a netvvork o f only about

10 strategic partners HCMC Nong Lam University

was the only One that was able to establish strategic

long-term cooperation with 120 enterprìses The

number o f enterprises with short-term cooperation

clearly differ betvveen groups such as tìie group o f

HCMC Nong Lam University, Vĩetnam Academy of

Agricultural each has more than 100 partners, the

average group like Hue University o f Agriculture and

Forestry, University o f Technical Education of Hung

Yen with 20 to 40 partners and groups such as the

University of Vinh with only 4 partners (Doan Van

Tinh, 2015)

For the students, it is worth mentioning that university

- enterprise cooperation in practice plays an important

role for job prospect after graduation Survey results of

nearly 1,400 alumni participated in POHE leaming

showed that 72.8% thought they can meet the demands

of employers; 75.5% said "the intemship is beneíicial

for the current job"; 71.3% rated “the intemship is

closely related to the actual current job" This helped

the students to be self-confident, active and able to fmd

a job matching theừ major after graduation Survey

data in 2013 at the Hue University o f Agriculture and

Forestry showed that 100% of students trained under

POHE prọject have found jobs after graduation, are

rated highly by the employers for professional capacity

(National Institute for Science and Technology Policy

and Strategy Studies, 2015)

A few large imiversities have more clearly shown the

enterprise cooperation model and have seen results

These include 3 cases that have eữiciently deployed

university - enterprise cooperation: Víetnam National

University Hanoi (VNU), Hanoi University o f Science

and Technology (HUST) and Hue ưniversity of

Agriculture and Forestry

■ Vietaam National University has implemented

ỉổectively three models: University - Institute from

VNU; Universities from VNU with research institutes, enterprises outside VNU; Laboratory model "phoi thuoc" links the University o f Technology from VNU with research institutes outside VNU In the model that

links with the enterprise, through the cooperation that was signed comprehensively with large corporations

such as PeứoVietnam, Vĩettel, VinGroup and companies such as: Advance International Company (A 1C), BRG Group , scientists and other units under VNU deployed dozens o f mạịor themes / programs /

projects to serve the community.

- Cooperation betvveen the Hanoi University of Science and Technology and Rang Dong Light Source and Vacuum Flask Company in scientific research, technology transferring is a typical cooperation This

partnership has formed a variety o f themes and prọjects,

thereby enhancing research capacity o f the University, also contributed to the rapid growth o f Rang Dong in manufacturing and trading Currently, two parties have

had many joint projects, including the prọject to build

two joint laboratories (01 located in Rang Dong and 01

in Hanoi University o f Science and Technology) that

brings many practical benefits for both sides.

- Hue University o f Agriculture and Forestry was one

o f the first universities to be selected for the pilot

training of the Profession - Oriented Higher Education Project (POHE) in 2005 Through this program, the University worked with over 500 domestic and íòreign enterprises (Laos, Cambodia, Thailand ), gave

students the opportunity to dừectly participate in management, production, sales activities in the enterprises; increasing employment opportunities after

graduation (Doan Van Tinh, 2015)

The content o f cooperation between enterprises and

university is still mainly ừaining, supplying high-quality labor from universities to enterprises through orders or recruited from enterprises

Cooperation in Science and technology is still limited and has not been able to keep up with the world While

over the world, cooperation in scientiíĩc research

foilows the dừection: Universities take orders from

enterprises, enterprises cover partly or fully the cost for

the universities; Universities mobilize manpower to complete the order The products created are placed under common ownership Meanwhile in Vietnam, this cooperation is still spontaneous Universitíes did not

show initiation, the partnership is mostly made from

the enterprises side (Ha Van Hoang, 2011)

The leaders of most universities are mostly not aware

o f the importance o f the transference and commercialization o f products, technologies from research to enterprises, thus did not pay attention, did not proactively and positively promote cooperatìon with enterprises In contrast, the university is not an attractive destination to seek innovation and creativity

The reason is that the research programs from universities primarily íimded by the Government; many research products are more academic in nature,

ICECH20Ỉ6 - Inteỉiĩational Conference on Emerging Challenges: Partnership Enhancement

not tied to the commercial applications Therefore,

enterprises rarely need to cooperate in the transfer and

application activities

A recent study o f the company T&c Consulting

(Vietnam) showed that most o f these partnerships stem

from immediate demanđs, short-term plans o f the

enterprise rather than their strategic long-term plans

(78% versus 22%); the level of cooperation mainly in

"understanding the early development" (214 out o f 493

universities that enterprises "have collaboration with

“and "short-term cooperation" with 174 out o f 493

universities; in particular, only 58 and 47 universities

respectively are considered "long-term partner" and

"strategic partner" o f the enterprises (Nguyen Phuong

Anh, 2014)

In terms o f the structure o f the mode o f cooperation,

universities mainly receive sponsorship and support

from enterprises that do not yet have long-term

programs, strategic cooperation between two sides

With the advantage of position and legal status,

cooperation with enterprises o f VNƯ brought in

revenues o f over 55 bilỉion every year in 2010-2015

However, over 70% is the íinancing o f physical

investment, scholarship support for students Revenues

from technology ữansferring contracts, production

testing and commercialization contracts or applying the

results o f research into practices account for a small

percentage

Overall, cooperation between universities and

enterprises in Vietnam in recent time is still

ửagmented, dependent on personal relationships and

subjective will of the heads o f two parties, no

commitments have been created that are long-term and

sustainable The cooperation have not stemmed from

shared Vision and strategy between the two parties

Leaders o f the two parties and Ịiniversities alumni play

the largest role in promoting cooperation

The largest barrier o f collaboration in Vietnam today is:

the lack o f iníbrmation from both sides In addition,

most enterprises said they did not have contacts with

the universities (Nguyen Phuong Anh, 2014) The

above results also showed: there is still a "white space"

in cooperation between two partners "White space"

should not be understood in geographical terms but as

the barriers to the initiative o f cooperation, lack o f

mutual information; the parties have not directly

participated nor actively demonstrated their role for

each other

Besides, the implementation of cooperation between

the two sides was also made diổìcult by the

Government inadequate administrative management

mechanism: university autonomy unexploited in

practice; decentralization o f the university management

as well as the administrative procedures o f the Ministry

of Education and Training and o f the "goveming body"

congested this cooperation The models promoting

cooperation between universities and enterprises such

as establishing start-up or pilot production prọịect in

the university, constructing technology incubators etc although have already mentioned in Government documented regulations, ứie lack o f promoting conditions regarding the legal environment and the operational mechanism o f the university itself are the reasons why cooperation has not brought results nor being efFicient compared to the goal

2.2 Start-up and its role in university - enterprise partnership in Vietnam

Start-up and entrepreneurial spirit has never been so concemed beíòre by the govemment, leaders, managers and enterprises Deputy Prime Minister Vu Duc Dam in his speech "Promoting national entrepreneurship" at the workshop "Launching national start-up initiatives,l recently took place on March 30th,

2016 in Hanoi emphasized this The Government is committed to continue to build mechanisms and policies to create the most favorable conditions possible for the enterprise commimity, incubators, institutions, ủinds related to entrepreneurship development:

- On May 18*, 2016, the Prime Minister has approved the scheme "Support for the National start-up ecosystems until 2025" The scheme aims to create a favorable environment to promote and support the formation and development o f enterprise type that is capable o f rapid growth based on the exploitation o f intellectual property, technology, new business models developed by supports from the Innovation Partnership Program between Vietnam and Finland

- Vietnam Innovative Startup Accelerator signed a

memorandum o f cooperation agreements on the development o f start-up activities at universities and high schools, including Hanoi ưniversity o f Science Technology, University o f Technology- Vietnam National ưniversity, FPT ưniversitý and Hanoi Amsterdam High school The signing event this time marked a milestone in the promotion o f start-up for enterprises and the younger generation in Vietnam, especially in the context o f the year 2016 which was chosen as the Start-up Nation Year of Vietnara

For universities:

- On June 15*, 2016, Lotte Data Communication Company has launched Lotte start-up support room at Hanoi ưniversity o f Science and Technology to support the students perform their startup aspừations;

- FPT ưniversity combined with High Technology Business Incubator Center (HBI), FPT Venture Investment Fund and the Netherlands Development Organization (SNV) oỡĩcially launched the program

"START-ƯP UNI: Become a unipreneur" which aims to create a playing field that realize an entrepreneurship dream, the aspừations to change o f the passionate and

Creative students.

Over the recent decade, the start-up activities in universities in Vỉetnam have begun ío appear in many

ỈCECH2016 - InteĩTiational Conference on Emergìng Chalỉenges: Partnership Enhancement

diổerent forms Overall, universities that have

partnered with many businesses are also those who

represent the interest and activity o f start-up Two

mạjor forms o f start-up and start-up support in

universities today are: forming start-up enterprises and

building enterprise incubators

2 2 1 Ma ỉn form s o f start-up in university in Vietnam

and current situation

- F o rm in g s ta r t- u p s in u n iv e r s ity

Start-up in university is íòrmed by the dừect and high

level combination between training and usage,

university and enterprise The establishment o f

enterprises in the university will contribute to promote

activities in the fĩeld o f commercialization o f

knowledge, technology ừansíerring, patents,

eđucational consultancy, attracting ủradings, etc In

addition, enterprises in universities also períòrm the

íìinction of scientific research, technology transferring,

broaden educational activities, creating links with

industry

Start-ups in universities have been íòrmed and

operating in a number o f universities in recent years,

sũch as the Technology Investment and Development

Company (BK-Holdings ) under Hanoi University o f

Science and Technology, Pharmacy Company under

Hanoi ưniversity o f Pharmacy, Construction

Consultant ưniversity (CCƯ) o f National ưniversity o f

Civil Engineering

At VNƯ there are 3 enterprises: Tourism and Scientific

Services Company at the ưniversity of Social Sciences

and Humanities, Natural Sciences Company o f the

University o f Natural Sciences, Microbiology

Technology JSC from Institute o f Micro-organism and

Biotechnology Technology The assessment results o f

the activities o f these three entprprises in the past 5

years show that: the enterprises services operation is

eíĩective, generating income for the universities

However, activity that bridge between scientists and

enterprises, loan organizations and potential investors

of the Science and technology enterprises is very

limited, thus the íunds to implement the transíer o f

research results and applications in real-life and the

proíit is not much

- Building eníeĩ-piise incubation centers:

Practice has proven the important function o f

enterprise incubators as the link between the centers,

research institutes, universities, govemment and

enterprises (or groups o f individuals) that intend to

establish enterprise to create a “nurturing” environment

for the start-up enterprises in a certain period so that

enterprises can overcome the initial difficulties,

confirming their existence and development as an

independent enterprise In universities, incubators more

clearly underlining the role as a tool for promoting

creativity, innovation, technology transfer and

commercialization o f successful technological ideas

thanks to more closely relationships between:

ưniversity - institute - enterprise

Starting in 2005, Vietnam has formed and developed some models o f technology and Science and technology enterprise incubators Some models have been built and developed, íòcused in the two main centers o f Vietnam: Hanoi and HCMC According to the authors, there are now 12 established incubators,

úicluding 5 in the northern region and 7 in the Southern

region, in which 4 are university incubators

Table 3: Start-up incubation centers in Vietnamese

universitíes

No Name Prioritized

area

Status

1 HUST Incubator

Information Technology

Discontinued

2 Technology enterprise incubator - HCMC Agriculture and Forestry Education

Agriculture, forestry and íĩshery mechanical, biotechnology applications etc

Running

3 Technology enterprise incubator - HCMC ưniversity o f Technology

Biotechnology, new materials, industrial IT

Running

4 Technology enterprise incubator - Can Tho ưniversity

Agriculture, íĩsheries, post-harvest technology, environment

Running

2.2.2 Major contribution o f start-up activities

From the actual operation o f the start-up in universities and enterprise incubators in universities in Vietnam in recent years, we can see that entrepreneurship activities, including start-up, bring major results as follows:

- Creating and strengthening linkages, eữective cooperation between universities and enterprise: the establishment o f start-up businesses or business incubators both has a common goal which is to bring the ideas o f the research program into a speciíic

product, to help inventors, inventors in universities

have the opportunity to transfer theừ research and innovative ideas for businesses Universities in Vietnam are places where Science research, human resources and facility, laboratory are readily available for scientific study Start-up is the bridge o f cooperation between universities and enterprises to

transfer the results o f scientiílc research into business;

enterprises ha ve address to connect to, share information on investment opportunities, a new product that has the potential to not invest now in research or experimentation

1CECH20Ỉ6 Intenĩational Conference on Emerging Challenges: Partnership Enhancement

Although the nuraber o f enterprises in the university is

still small, these businesses also contrìbuted to promote

the transfer o f research results to business For

example: Natural Sciences Company o f the ưniversity

o f Natural Sciences - VNU within 5 years from 2011 to

2015 has raade more than 90 technology transfer

contracts and production test from the research trial

production research carried out by the scientiíĩc staff o f

the school; Tourism and Scientiíĩc Services Company

at the ưniversity o f Social Sciences and Humanities -

VNƯ aiso provides diverse services from using human

resources for off-campus businesses thanks to the

partnership

- Fostering the spirit o f creativity, entrepreneurship in

university: start-up is a method to realize the

application o f new technology, new product research

for active companies that may not be willing to invest

on the new, risky and unproven technology In addition,

start-up helps promote scientiíic research activities in

the university Scientists, students have more practical

purpose and a higher motivation in scientiíic research

From good research topic, the students can establish

the enterprise right when they are attending school

Findings o f Iníòrmation Technology Park in 2015 on

the factors affecting entrepreneurship intention o f IT

students has shown: the percentage o f students who

want to start a business right from when he was

studying is more than 80% o f the respondents More

notably, 1 o f the 3 most important reasons motivate

students to start a business is because theừ start-up idea

was sponsored by the investment fimds that own the

ũinds re-created by enterprises This shows that when

businesses engage more deeply into university -

enterprise partnership, they themselves have created a

major driving force in promoting the entrepreneurship

in universities

- Activities o f business start-ups bring revenues outside

the govemment budget, diversiíy resources for

universities: Natural Sciences Company o f the

University o f Natural Sciences r - VNƯ within 5 years

from 2011 to 2015 brought the cumulative tumover o f

over 10 billion VND from technology transfer

contracts, production testing; Tourism and Scientiílc

Services Company at the University o f Social Sciences

and Humanities - VNƯ achieved cumulative revenue

ửom 2011 to 2015 o f more than 20 billion VND

2.2.3 Shortcomings o f start-up promotỉon in university

and some reasons

In addition to the strong points, start-up and stat-up

incubation in univesities still have some shortcomings

Firstly, there are only a few start-ups and start-up

incubation centers which are not very eổicient Two

main reasons o f the shortcomings are related to

íinancial issues and legal framework

It is diổĩcult to mobilize ĩmancial support to set up and

maintain the operation o f start-up incubation centers

The little íund from the State íòcuses only on land and

factories At the same time, start-ups find it not easy to access íìmding institutions or venture Capital The underdeveloped stock market is also another barrier for the growth o f incubation centers

Legal framework for the start-ups and incubation centers is one o f the reasons for the limited access of these start-ups to the íiind Although the govemment has set the strategic direction and issued some policies, the legal framework for university start-ups is still very poor with limited sphere o f iníluence Thus, there are not speciíic policy to establish and promote university start-ups and incubation centers Even the concept of technology incubation center is not clear and legal However, the govemment has committed to períect the legal framework by 2020 (as mentioned in the

“National Entrepreneurship Incubation Eco-system by 2025”)

In addition, the insuíĩlcient awareness o f the role, íìinctions and socio-economic beneíĩts o f these incubation centers o f the community and even policy researchers and makers also decreases the eổectiveness

o f legal fìamework, and íinancial support from the business community for start-up incubation centers Enterprise leaders lack the trust in problem solving capacity o f the academia from universities Therefore, business leaders are not ready to share ownership and partner with universities and vice versa When universities are not active in partnering with the industry and sharing knowledge and patents, there will

be negative eổects on start-up incubation centers and the growth o f start-ups in university, particularly in the initial fund raising phase

Secondly, the íorms o f start-up incubation centers are still limited Most current incubation centers are technological centers, particularly IT ones The reason

is that IT is now the strength in technological transfer and implementation in Vietnamese universities Another reason is the unclear regulations o f intellectual property and how to allocate related beneíỉts when a start-up is incubated successfiilly

Thirdỉy, start-ups and incubation centers do not have

suíĩĩcient expert network and professional services to promote incubation and foundation o f start-ups Most services to these newly established businesses are basic and at low level Some incubation centers are awarded theừ legitimacy very late Moreover, the staff working

in start-up incubation centers is not fiill time employed but rather are part-time oíĩĩcers Their time devoted to the incubation center is limited while the low salary

leads to diổiculty in hừing fiiil-time professional

managers for the incubation center

The quality o f selected enterprises for íunding is poor

with too theoretical business plan that lacks the sense

o f real life The managerial skills o f the incubation center managers are insuổĩcien and fail to meet the demand o f enterprises

ICECH2016 Inteinational Conference on Emerging Challenges: Partnership Enhancement

2 3 R ecom m endations

Practical research shows that the university - enterprise

partnership is still underdeveloped and far behinds its

potentíal These following recoommendations are

proposed by the authors to remove the barriers that

uiũversity enterpreneurship and its partnership with

businesses is facing so that the two parties will

contribute more to the socio-economic development Ũ1

Vĩetnam.

2 31 Recommendations fo r the Vietnamese govemment

It is necessary to improve the legal system that dừects

and adjusts the university - enterprise partnership The

education that encourages private sector investment in

eđucational activities; to increase autonomy and

self-responsibility o f the university; to encourage

business to link with universities in training and

collaborative research Howevêr, to ensure that these

activities will be promoted and to be eíĩective, the

government must have a policy and speciíic guidelines

Õn one hand, the govemment should create a favorable

legal framework for stakeholders, but on the other side

they also speciíy the rights, responsibilities and

methods o f cooperation to avoid conílicts of interest, or

the contradictions o f development goals between two

parties

Moreover, the legal framework and mechanisms for the

operation of the business start-up and now in college

incubation centers should soon (even in 2016) be

enacted to support entrepreneurship and innovation

The govemment should also gradually improved

startup ecosystem associated wiứi the creation o f an

open space for research activities and development of

the university and the scientists In particular, the

nniversity should pay concem to the elimination of the

provisions, regulations administrative nature for the

university, but instead is a mechanism to promote

autonomy and social self-responsibility o f the

university

There is separate íĩnancial mechanism, in accordance

with the startup Financing for starting a business

include not only íinancial risk factors such as

investment fưnds, which combine íinancial need

through conventional banking system to effectively

promote entrepreneurship The combination o f íĩscal or

íinancial credit support to íinancial risks o f investment

íunds have been applied in many countries around the

world In the situation where the banks did not

participate fiilly in this process due to place high

priority on serving corporate íinance in the traditional

way, the support o f the State Fund is a suitable

replacement

There are national programs to expand the activities to

promote entrepreneurship and enhance

commercialization, combined with expanding access to

Capital for entrepreneurs starting a business as the

investment fund and support entrepreneurship

gorvemment's This íimd should also be incorporated,

in harmony with the private investment fimd in proportion depending on the risk level o f the start-up business The combination with the private sector in investment to help mitigate risks to the govemment's budget

Creating communication channel or network o f links between business and universities, and to improve the program, the support mechanisms for innovative businesses This is an issue that the two siđes have not yet been established Even if there were business incubators are now also unrealized intermediary íunction because o f the lack of iníormation about the possibilities and demands o f each party at the national, sectoral and local areas Channel or a network connection such as data collection, data updates, Consulting and providing iníòrmation, links model would be a good solution for the parties to easily find the right partner But at the same time, advise the relevant authorities in formulating relevant policies This is also the implementation of the connection kiende components startup ecosystem in order to build

a solid foundation for the Vĩetnam generation new business, while promoting cooperation on innovation and launch now between Vietnam and other ASEAN countries

2.3.2 Recommendations fo r both universities and enterprises

Firstly, both partisees need to change perceptíons and

views on cooperation: the golden rule is "mutual understanding and mutual beneíits o f cooperation" At the same time, it is also needed a ílexible operation mechanism and ílexible: the school and scientists should not only care about protecting intellectual property or patents, inventions; now the reverse is not too worried keep secret technology, Snancial mechanisms and investment policies; instead, should have the clue to establish íiỉll cooperation and information

Secondly, the two sides should maintain regular communication channels through specialized department in charge o f cooperation or through conferences, seminars, scientiíĩc fomms, collaborative projects so that both parties will understand and gain mutual trust through practical activities; actively share ideas, including the development strategy to build long-tenn cooperation and strategic partnership

Thirdly, two parties should harmonize the beneííts of

cooperation Each party needs to be aware o f the beneíits, respect and balance o f interests Universities need to prioritize the ừansfer of technology, providing high-quality human resources and support businesses in solving business problems ữirough consultancy Conversely, enterprises need to facilitate universities by oíĩering intership positions and Aeldtrip tours, recruiting new graduates Enterprises should play the role of suppliers o f infonnatìon to the university so that they understand the needs o f the labor market to update

ICECH2016 International Conference on Emerging Challenges: Partnership Enhancement

and improve the curricula and training methodology

2.3.3 Recommendations fo r universities

Universities should pay much attentíon to íoundation

of innovation and entrepreneurshìp as well as the

procedure of setting up start-up incubation centers in a

university Especially, there should be motivators to

promote students and young staff to be more

entrepreneurial through activities such as Creative

training methods, establishment o f entrepreneurship

clubs, introducing information about the support from

businesses

Moreover, imiversities should íbrmulate policies and

regulations o f forms, motivators and resources

allocation mechanism for the university - enterprise

partnership Researchers and academic staff should be

encouiaged to get involved in start-up activities

Research results should be immediately transferred

while the intellectuàl property is still protected through

the registration with the authority so that universities

will get back a certain amount o f money for

reinvestment in R&D

The database of business partners and a specialized

department that connects with businesses and other

partners should be developed This department

supports and cooperates with start-ups to access fund

for R&D, production, IP exploitation and

commercialization o f research results It is notevvorthy

that this department should not work independently but

closely connect with a network o f school managers,

lecturers and alumni, professional association, local

authority bodies to search for potential business

partners

In addition, the technological incubation centers,

technological transfer offices and start-up centers

should be íòrmulated Thẹge institutions will help

start-ups, scientists and students to link with Capital

sources, venture Capital and advisors and providers o f

business administration services They also provide the

motivators for scientists and students to commercialize

their research results

Start-ups should be set up in form o f partially or wholly

ovvned by the university to exploit the research results

and provide services of business ideas implementation

The company may be structured in two levels: (1) The

"mother" company (the umbrella) which is under the

control of the university will oversee the list o f IP

Products, (2) the statellite enterprises are íormed by

existing research institutions in the imiversities to

exploit the beneíits from the commercialization o f

research results

Universities should also actively invited scientists and

outstanding managers from businesses to participate in

research and teaching activities In addition,

entrepreneurial academic staff should also be selected

and traìned to participate in start-up projects and

commercialization of scientiíĩc research

2.2.4 Recommendationsfor enterprìses

Enterprise leaders shoulđ recognize that the strategic partnership with universities will serve tìieir long term beneũts Thus, this partnership will not only about human resources development but also tìie exchange of entrepreneurial development and innovation ideas It is vital for the enterprises to actively contact and get infonnation about the university

Furthermore, the intemal regulations in enterprises should promote innovative culture to trigger the passion

in business to create unique, differentiated and high-value Products by sứengtheming R&D activities This is a must for Vietnamese enterprises to diíĩerentiate themselves in a hypercompetitive environment after the TPP protocol is signed

Enterprises should also invest in start-up activities in universities through research cooperation, joint training courses and commercialization o f technological

research Products This kind of activity should be

prioritized to bring them long term beneíits

3 CONCLƯSION

University — enterprise partnership is becoming an indispensable trend and a self-actualization need to bring long term benefits and exploit the strengths of each involved partner In this partnership development, the govemment play the role of a “midwife” who nuture the legal mechanism and other policy support to promote the tighten link between two parties The triple relationship among goverament — university - enterprise brings about sustainable socio-economic development in each nation In these recent decades,

start-ups in university have drawn much attraction and

is tightening the eữective partnership between university and enterprises Tíirough partnership, start-ups are exposed to development opportunities, then the university start-ups when they gain success, will contribute to the close partnership bettveen both parties The USA, some European countries and speciíic Asian countries such as Japan, Korea, Taiwan and China have gaine a lot of success from this partnership

In Vietnam, university — enterprise partnership and university start-up in recent years are gaining much attention o f different stakeholders in the society The govemment has done a lot o f eỡbrt to communicate the direction and expectation that universities and enterprises will be more actively in start-up activities However, the reality is that start-up activities are still limited, cursory and not very diversiíied so that the benefits are much under the potential of each partner Therefore, it is concluded that the slogan and dứection are not attractive enough There should be more motivators and a more open mechanism for imiversities and enterprises to free all theứ resources to invest in innovation and entrepreneurial spirit