Transcription
We're writing a book about how countries become rich. You look at culture, you look at the role of women, you look at the role of technology, education levels. You look at even, like, um, opportunities for returning people with MAs and PhDs. Now, these are not things that economists and bankers and business people necessarily look at, but that is how a country becomes rich.
How long does it take to get rich? 50 years, because that's how long it took Korea and Taiwan to get rich. Vietnam has already grown for 25 years, and is there any evidence at all to say that we can't keep going?
Good morning, everyone. Welcome to another episode of Vietnam Innovators. I'm your host, How. Thank you for tuning in every single week and supporting the podcast. Today, we have two colleagues joining us on the podcast here today. We have Brooke, we have Sam. Brooke is a director at Vin Capital. Uh, we have Sam, he's a writer, author, uh, probably a number of other things I don't know about, but in his capacity today, he's an author. And we have the two of them here today to share about a new book they've just released. In Vietnamese, it's been published in English for some time, and I'd love for them to kind of hand it over to them and share about what they're up to. So, Brooke, Sam, please, just a quick elevator introduction from you.
I'm Brooke Taylor, the CEO of Vin Capital Asset Management. Um, I started my career in New Zealand as an accountant, but I moved to Vietnam in 1997, uh, with the accounting firm I was working for. So I've been living and working in Vietnam since, since 1997.
Wow, okay. So 27 years.
27 years. Yeah. Okay. I'm 32, by the way. So, I just to say, people, I've been in Vietnam longer than they have, even Vietnamese. And, you know, we'd love to hear your story about how you ended up here. But Sam, quick intro from you as well, please.
So, if you're 32, I've actually been in touch with Vietnam longer than you have. Okay. Yeah, because, uh, I've been here three times. The first time in 1990 as a tourist and a student. I studied Vietnamese at the University of Hanoi, 1990, 1991. And then I came back in '93 for about 11 years. And then I came back the third time since 2018. Okay. So, come close to 20 years of living and working in Vietnam, but over a 33, 34 year time frame. So I've been able to see Vietnam at a lot of different stages of its development.
[Music]
Hey everybody. Uh, before we start today's podcast, I want to share a bit about our partner for the rest of this year's Innovators podcast season, Overseas Vietnamese. Starting with the Overseas Vietnamese Summit, co-hosted by us, VCET, and OV. It's going to be on January 2nd, 3rd, and 4th, 2025, in Ho Chi Minh City. If you're an OV professional looking to build your career in Vietnam, this is the event for you. Join us for insightful panels, top-tier speakers, and amazing networking opportunities. You can check the link in the description or scan the QR code to grab a ticket. Hope to see you in the network.
[Music]
Let's just start with Sam. I'd love to hear your guys's backgrounds a bit further. Uh, you mentioned you came and went a couple of times. In particular, that gap between 2018, your latest stint back in Vietnam, to it sounds like was like 10, 15 years?
14. Yeah. 2000 to 2014.
How was that experience, that 14-year gap?
Um, well, I work, I ran a nonprofit back in America where I'm from, and then I was four years in Shanghai. But, um, it's given me a really interesting perspective of Vietnam because I, I, I kind of disappeared for for 14 years, then I come back and I see things that were only talked about. Because in the late '90s, I was a journalist. I, I wrote for a business magazine, and then I also had, um, my own research company. So I was researching things like the subway, like the tunnel under the Saigon River, like, at that time, there's only one bridge over the Saigon River, the Saigon Bridge, and all these plans for this bridge and that bridge. Saigon South was Saigon South, not D7. Yeah. And so coming back so many years later, um, and actually seeing some of these things in place was a pleasant shock because back then they were, they were wish lists, they were like real pipe dreams, especially like the tunnel and the Saigon River. That was like, oh, no way, that's too, this or too that, too expensive, too complicated. But that's kind of the easy thing now. Now, I mean, building another bridge just isn't that difficult. And so that's been really refreshing to to to have that perspective of that. And therefore, as a writer, there's a lot to write about.
Phenomenal. Yeah, we'll dive more into that in a little bit. And Brooke, over to you. You said 1997. Did you come as a working here, I guess?
Yeah, I came with, with a small, well, with Arthur Andersen, an accounting firm. Originally, it was two years, and I enjoyed what I was doing. Two turned into four, and four turned into six. And then, um, my wife and I said, well, when the kids need to go to school, you know, an international school, that we maybe need to leave. But the schools were good enough for them to go to school. And then we said, maybe secondary school, uh, maybe we'll leave when they get to secondary school. That didn't happen because there were good enough schools here for for us both to stay and the kids to be educated. And now, um, they've left and we're still here. So we've brought up three kids here in Vietnam through this. They're New Zealanders as well. My wife's a New Zealander. Um, but it's been a wonderful experience. You know, I actually short-stinted outside Vietnam too, but like Sam, I, I spent 2 years in Thailand. I left in 2004, came back in 2006. And that short stint in Thailand really helped me appreciate the differences between Vietnam and some of the other countries in Southeast Asia. Um, I also realized I really enjoyed working here and there was real purpose. And so coming back, it was a much easier decision, and obviously, the, the commitment to stay longer was there too.
Yeah, phenomenal. That's, you know, you guys have seen Vietnam become what it is today. Um, yeah, I think that's why the two of us to do this book. We were the right two to do a book like this one at this time. Yeah. You know, it, it's, how do you explain 25 years of growth? And how do you consider 25 more years of growth? Can, is that even possible? And, and let's talk about that a little bit. So, you know, there's been 20 plus years of your own personal lives and histories in Vietnam. The last 20 years, Vietnam has fundamentally changed so much. A lot of people have been lifted out of poverty. Uh, they not only more income now, but they're also very well educated. They want to know more about the world. Uh, why now to tell the story? What's the next chapter? That's like that milestone that warrants this, this book?
You know, this is a very important time for Vietnam. It's starting to emerge. And one of the reasons why we wanted to write the book was that, um, we often meet people from overseas, and they turn up, arrive in Vietnam with a range of perceptions about this country, which frankly, are wrong. Right? Things such as, um, the war, and the war still just recent. Well, it's not recent. It finished 50 years ago. And the impact of, for example, a single-party state, a communist government, and the thought that that means there's no market for market playing out here in terms of economically. All of these misconceptions are quite easily dismissed once you visit the country and you start to look. And hey, this is not the country that I thought it was. And so we felt that there was a need for for for someone to document or record contemporary Vietnam, to define what it is today, so that people that want to engage with Vietnam have a resource that they can access, which will quickly bring them up to speed about what Vietnam is today. So that was for the foreign, foreign audience. But the other side to it, which was really important to us, is when we, when we started to write the book, we realized that most Vietnamese don't think much about their future, and they don't understand what the past has. As you said, the country has changed dramatically over the last 20 years, but why has it changed? And will it continue? And so there's a really important message, um, to get out there to explain to people in Vietnam what's really going on in their country. There's not completely random, that there is a plan in place of sorts, and that, um, it will continue for the foreseeable future, that will allow them to plan their lives better, plan for their futures, um, and, yeah, make better decisions.
Okay. And, and Sam, you would probably say something very similar. But I would also, just to hear from your personal perspective as a writer, as an author, Brooke, you know, works in business, he's representing one of the biggest private equity firms in Vietnam. How, how about from your position as a writer, as an author, as someone that has come and gone for quite a significant amount of time?
I wrote a book in 2000, 2002, called Saigon Stories, which was an oral history. So I asked a lot of people questions, got their stories, and wrote their stories down. And what surprised me about this book was, um, talking about the future wasn't something people were very used to doing because they're so busy with the present. They're so busy doing what they need to do to get, to get their business going, to get their lives going, to get their kids in a good school, and all that. And so there, there wasn't ever a long discussion about the future. And I'm like, well, you know, this is, you know, you shape futures, you, you don't make futures, but you do shape them. And that, that was illuminating. And then the other thing, especially as a writer, I think that kind of dawned on me about two years into the into the project, two years into research and writing, was that, of course, we are writing a book about Vietnam. We're writing to explain how has it grown for 25 years in a row, and will it grow for another 25? So 50 years. Mhm. And so we have to look at, well, which countries in the world have grown for 50 years in a row? Very few. That's how we arrived at our hypothesis and our comparison to Taiwan, South Korea. But the, epiphany, if you will, was actually, we're writing a book about how countries become rich. And then you start to look at a whole bunch of different metrics, not just things like productivity and manufacturing and trade and, you know, an economist's view of the world. You look at culture, you look at the role of women, you look at role of technology, you look at, um, education levels, um, you look at even like, um, opportunities for returning people with MAs and PhDs. Now, these are not things that economists and bankers and business people necessarily look at, but that is how a country becomes rich. And that what opened up just a whole bunch of new avenues to look at and to research and to write about.
How does the country become rich? It's a good question. I recently saw a statistic, which is not verified. I saw on X.com, uh, which is the highest growing country in the last 100 years in terms of a multiple was South Korea. It was 24 times. Wow. Yeah. In terms of like wealth creation, like the average person basically was like, not worth very much, and then the country just expanded so, so much. Now, South Korea had a few things going for it. Does Vietnam have something like that? I mean, it's grown considerably. It must have been 20x or something like that. But is it, is it going to ever hit 200x? I mean, that's quite, we don't know whether we can predict that. But, um, maybe. Right. Um, what we did in the book is we, we, we compared Vietnam with South Korea and Taiwan during their growth phases. And we chose those countries because we felt there were more similarities with what's going on here in Vietnam than perhaps the countries they usually compared with, which is the Southeast Asian countries. An important similarity that that we bring up in the book, which Sam has just referred to, is culture, right? That Vietnam is probably more Northeast Asian than Southeast Asian culturally. And if you're looking at economic growth, don't look so much about where a country is, but look at what the culture is within the country, and, and the role that that plays. So the role of women in Vietnam is obviously very strong here. There are very few barriers. Um, but also the commitment to education and hard work and supporting the family and structured society is all there. So we made this, that's what we saw in Vietnam, and, uh, why we chose South Korea and Taiwan. Now, in the book, we identified what we call cards or drivers that South Korea and Taiwan had when they were fast-growing economies. There were eight that we identified for those countries, um, things like trade and geography, um, adoption, learning, education, the adoption of technology, and so forth. So, and we, we said that, yeah, Vietnam has a number of those characteristics, and they're playing out today, and they're supporting growth. But actually, also identified another nine drivers that we, we see Vietnam has that those countries didn't really have as St when they were fast-growing economies, which are really making Vietnam even more the, the growth movement here in Vietnam even stronger than what we saw in South Korea and Taiwan. Things such as, um, agricultural wealth. Those countries don't have a lot of agricultural wealth. Or again, the role of women. Women weren't really totally engaged in the, in the building of those economies for traditional reasons. So those other nine factors are also extremely compelling. And it's the mixture of those drivers and the Imp that's that comes as a result of those drivers that's pushing Vietnam forward.
[Music]
Hey everybody. Before we continue with today's podcast, I want to share a little bit about our partner for the rest of this year's Innovators podcast season, Overseas Vietnamese. Starting with the Overseas Vietnamese Summit, co-hosted by Vietcetra, that's us, and OV. It's going to be back on in January 2nd, 3rd, and 4th, 2025, next year, in Ho Chi Minh City. If you're an OV professional looking to build your career in Vietnam, this is the event for you. Join us for insightful panels, top-tier speakers, and amazing networking opportunities. You can check the link in the description or scan the QR code to grab a ticket. Hope to see you there and in the network. Take care.
In the book, you talk about like agriculture being here very present, whereas in other Northeast Asian countries, not as prevalent. They really thrived on like value-added manufacturing, perhaps subsidies from the US. I think was probably a factor as well. Vietnam doesn't have subsidies necessarily, but a lot of spending, happy consumer spending from American consumers. What would you say, given the just generational change? So we're in 2024 today. Mhm. Yes. We can still compare populations and, you know, roles of women and all these things. But has the introduction of technology, AI, social media, have those perhaps influenced how you guys wrote the book or how do you think about that as well? Because just in the last year, things have changed. So, for instance, in the US, people are saying, um, you know, banning TikTok now, right? Which I'm not advocating for, by the way. Um, but that didn't really exist 70 plus years ago. What are your thoughts on that?
The technology in general that's available now to entrepreneurs here are tools and things that South Koreans and Taiwanese in the 1970s, '80s, and '90s didn't have, didn't even dream of. And so that, that's the case for every generation, obviously. And so you have to ask yourself, well, are these technologies really dramatically more impactful than, you know, a good, a better fax machine? Or when the email first came out, digitization first came? More, more. And so you have that era, plus you have a lot more people in Vietnam. You know, 100 million people. Workforce is about 60 million. When Taiwan and South Korea were in their tiger economy runs, they were relatively small countries. You know, Taiwan was, I think, less than 20 million at that time. Korea was, say, give or take, 30, 35 million. Right now, they're 50 million and 25 million respectively. Total population right now is smaller than the labor force of Vietnam. And so as we go into the AI field, as we go into digitalization, as we go into all these different things, you need a bunch of coders. Vietnam's going to have a lot of them.
That's, that's an interesting point about just population. Yeah. I, I recently, I've been quite obsessed with this. I've been talking a lot. Obsessed is maybe a strong word, but, um, I, I came from a population studies background in university, by the way. I studied sociology and statistics. Didn't, at the time, think about it much. Uh, but we have other colleagues, Mim, who you also probably know about. She was on the podcast a few months ago. She's a population studies expert, specifically human trafficking, but also like labor trends and migration. And, uh, I recently was in Japan, where I just read that in the last year, Japan only had 700,000 births. South Korea, in this calendar year, is projected to have around 250,000. Basically, their populations are going to collapse. We're literally talking depopulation, not just aging. Right. Does Vietnam have that potential crisis ahead too?
It does. What, what are your thoughts about that influencing?
Yeah, it's a ways out though. I mean, as you, as a demography fan, you'll appreciate the idea of get rich before you get old. Right? And in Japan and in Korea, having an aging population and no babies isn't as stressful of a situation because they're already rich. Right? Whereas in China, which, as of last year or so, their population is is beginning to go down because they, uh, of all, all the reasons. And are Chinese say, okay, we're rich already, so we don't have to worry about being old? I doubt it. You know, maybe West, Eastern China would might say that, but China is China. It's East and Western China. And so, I think Vietnam has to be highly aware of almost a race. There's about a 10-year window or so when the just pure math demographics are going to say, so people have to make more babies. Basically, you're going to either have to have more kids or get rich, grow faster. And I think that that's, grow faster. In the book, we project the growth rate forward at about 6.2%, 7.2%, which is what's been achieved over the last 20 years. But if you overlay that with an aging population and put it in, you know, the country will become a high-income nation by 2040. That's fine. But actually, to be a rich country, you have to power through that and become it permanently rich. And to achieve that, I think the country needs to grow probably at 8 to 9% for the next 10 years, which is a really, really high number when in today's world.
So, when I was reading the book, I think a lot of the points you covered are very evergreen, they're pretty consistent. I don't think anything will drastically change. However, like I mentioned just earlier, the past year, a lot of things have changed. You know, a war has happened in the Middle East. I mean, that's more hopefully a temporary thing. But are there any trends that perhaps the two of you didn't consider when you wrote that book that are evolving and becoming more perhaps relevant today, or, or even adapted today, like AI, for instance?
And maybe not. But what one thing that I, that I think came out as we were writing the book, and, and I'm proud of, is the discussion around the brand Vietnam and the emergence of a country in terms of its brand. So, if you look at global culture, it's defined by rich countries, right? And Vietnam, when I first turned up in Vietnam, people had nothing to be proud of, right? They, you know, how's the football team go? Or, you know, poverty rates, or anything you talked about, people were not proud of their country. And one of the thing, there's another reason why we want to get produce this book, was that we wanted Vietnamese to understand really what's been achieved in the last 20, 25 years is very, very impressive, and they should already be very proud of that. But also, as economic growth continues, we'll start to export Vietnamese culture. You know, look at the food, for example. We write about that specifically in the book, and how appealing the food is, and how when you go around the world now, there are more and more Vietnamese restaurants in cities, and people really enjoy the food. But also, we, we start to talk about other things, like the arts, and the potential for Academy Awards or number one music hits, and so on. And some people say, no, that can't happen. That, that wouldn't, Vietnam can't achieve those things. But, but South Korea has, right? Gangnam Style and Parasite, and so on. And, and these are goals and visions, perhaps, to put in people's minds so that one, they can aspire to. Pride matters. Having a sense of pride is important, because one of the things we talk about is, uh, the Olympic Games. And so Japan won the Olympic Games 1964, Korea won the Olympic Games in 1988. But in both cases, nearly 10 years prior, a group of Japanese and a group of Koreans got together and says, hey guys, let's try to win the Olympic Games. Audaciously bold statements at the time. So this had have been about 1955 in Japan, just 10 years after the war, 10 years after the war, a group of guys, maybe government people, maybe private people, said, hey guys, let's try to win the Olympic Games. That's after 10 years of cleaning up, 10 years of getting their feet back on the ground, and so on. That thought came up. Same thing in 1978, because, um, in Korea, they were awarded the games in 1982. Mhm. That's when the IOC, the International Olympic Committee, says, okay, we're going to give it to this country. Mhm. So you can imagine that proposal process, and how long that takes. It's a 20, 30 year process. Well, you know, the, the, it's, they were awarded in '82, so say they began in 1978, give or take, for the 1988 games. If you were to get in a time machine and go to 1978, Seoul, South Korea, how much would it be looking like this place, or even a poorer version of Ho Chi Minh City or Hanoi? And that, my mind, was culture. It was pride. It was boldness. It was an entrepreneurship. It was saying, you know what, we can rise and play on the on the global stage. And what I hope is that, given that Vietnam has, you know, quite average, average age is your age, 32, and there'll be a group of people saying, hey, why not? Let's think big. Mhm. I mean, I, I would say that you did, in creating what you've created here, and a lot of entrepreneurs are, are quite young people. Why not something big like, you know, Olympic Games or the Asian Games?
So, question for you, and it's almost, I don't want to say rhetorical question, but I'd just love to hear your initial feedback. This all sounds great. Now, you two are fairly embedded in the Vietnam community, especially Brooke, you're on the more business side, but you meet a lot of entrepreneurs. I'm sure you've invested in a few of them. Sam, you're talking to a lot of them, just writing about their stories. Do those stories exist to match what you've just said? Are there, are there the people to make that happen?
Yes. Oh, absolutely. Okay. Yeah, yeah. Both here, and also returning overseas Vietnamese coming in, bringing skills and expertise. And there's a lot of foreigners that find Vietnam attractive. And it's not, not withstanding what a lot of people say, it's not a difficult place to do business if you just know how to do it, right? You know, and, and the regulations and, and banking and all these things. So, but yeah, there are companies, um, that we have invested in that are extremely exciting, that are already, you know, going offshore and selling products in Southeast Asia. You know, some are listed, some are still private, but they're at the leading edge as well in technology fields, and healthcare, um, a range of modern sciences.
Yeah, okay. That's great to hear. Just want to build on that. I think there's there should be a sense of optimism here. There's reasons for a sense of optimism. I'm going to do a short plug, by the way, and invite you here on the spot. I'd love for you two to speak at our Overseas Vietnamese Summit in early January, in a few months. Um, this forum, it's our second ever annual edition. It's meant to be an annual program. And I'll tell you the story that I would tell if, if invited, because it's relevant. It's already invited. It's recorded. Okay. Assuming you're in town, okay? But, but it's relevant to this discussion because, um, I was living in Taiwan from 1987 to '91. And so I have that perspective of having lived in Taiwan, Taipei City, when it was a tiger economy, what the world was calling a tiger. And it was very much a middle-income country, trying to go up. And it was Taiwan, it wasn't China. And so they had the mainland China, Taiwan issue that they have today. And, the Taiwan government at the time said, in about 1985, '86, let's get all the overseas Chinese to come back. They, so they made this giant appeal to the world, say, hey, overseas Chinese, come back and help us build the high-tech future. Five years prior is when the US recognized, uh, the People's Republic of China as China, and China and Taiwan was the Republic of China. And so that cut had already been made. And so Taiwan was like, okay, well, now what do we do? And what they did was they just got to work. They went to mainland China, started to build hardware, and they were responsible for the "Made in China" label in many respects. But at any rate, this appeal that they made, um, to the overseas Chinese community, um, had results. I, I was writing a piece back at the time, and I interviewed a microbiologist. Time when guy who went to America to get his, his academic work, got a PhD in anthropology, I'm sorry, microbiology, stayed and had a full career of as a microbiologist. He got the call, if you will, and he came back to Taiwan. And I interviewed him in Taiwan. He said, yeah, they gave me everything. Visa, no problem. Bank accounts, no problem. I have an apartment, I have a small job, and I have this research center, think tank type place, in which to do some really innovative work because these guys are serious. They wanted me back, and I came back. Another guy who responded to the same call is a guy, a very, very smart guy. He had an engineering degree at MIT, Massachusetts Institute of Technology, a master's in mechanical engineering from there, a PhD from Stanford in electrical engineering, and a full career at Texas Instruments. And he was 55 years old, and he got the call, or he responded to the call. I have no idea how he got the call, and he went back to Taiwan in 1987 and he launched TSMC. His name was Morris Chang. You know, and so there's, give or take, 5 million overseas Vietnamese around the world. And surely of that 5 million, there's some superbly brilliant types who, if the government says, please come back, we'll set you up in a research center, think tank kind of place. Mhm. Let's see what happens.
It just made me think about the worker exchange program in the '80s that the government had with Eastern, primarily Europe, if I recall correctly. I don't know if it was anywhere else in the world, but like Russia, Ukraine, Poland, among many other places, Eastern Germany. So, like, the wave one of that kind of already happened, but of course, on a more like, like fundamental economy scale, like manufacturing. Yeah, factory work, other things. And then the next wave is this kind of like new age technology. Like a lot of companies, not a lot, actually. FPT is just one of them, is investing in semiconductors. We have been doing EVs, and then there's probably a bunch of other companies trying to do something. So that next wave could potentially be driven by more returning Vietnamese, by just better educated Vietnamese, among other things. Yeah.
So, how long do you think that, uh, again, sounds like a rhetorical question, but how, how long do you think this process will take? Like, you look at Vietnam, they sent workers in the '80s. It took about, I don't know, 20 years, give or take, for to really get going, even 30, you could say. Now, do you think that time horizon could be shrunk, or will it take another 30 years for a brand from Vietnam to actually be prominent enough on a global stage?
I think in the tech space, you know, it's going to happen quite quickly. I think the commitment there, we, is from at the government level. There's a lot of discussion going on, and there are actions being undertaken right now to to work out what they can do to attract talent and capital to Vietnam for the next wave of, let's say, technology advancement. So, I, there's certainly a commitment there, and they do have to deliver on it. You know, we have to move forward in that way to achieve the growth rates that we really need to achieve to become high-income and then rich country, for sure. So I think, uh, yeah, you'll see those changes coming through, and there'll be significant changes in the next 10 to 20 years in terms of a major brand, you know, emerging from Vietnam, like the Samsungs of Korea and, and, and major brands of Japan as well. I think it's going to happen, but I can't point to a company and say it's that company. Right? I think the, the, the factories will be here, the talent is here, the, the entrepreneurship, the creativity, the everything that is needed in the to to build global companies is here and will happen in due course. I mean, any doubts that exist in Vietnam today probably existed in South Korea or in Taiwan 30 years ago, right? But look what's happened in terms of the development of their large companies as well. But, yeah, I'm pretty sure it's going to happen, but I can't point to who's going to do it. Um, but companies like Vin Group are important because they, they show others that Vietnamese companies can do these things, right? That we can go overseas and build businesses. Um, FPT is another one, which you mentioned. We really believe it's a great company, and notwithstanding the incredible growth it's already achieved, there's a lot of growth going forward as well.
You mentioned about a time frame, 50 years. If, if you want to pick a number, how long does it take to get rich? 50 years, because that's how long it took Korea and Taiwan to get rich. And Korea started, you mentioned this already, in 1953, when the, when the war was at an arms. At that time, one half of Koreans couldn't read. One half. You know, 70 years ago, now. And so that was their starting point. And then they grew for 50 years. But give or take, by the year 2000, is when they escaped what's called the middle-income trap and became a high-income nation. So Taiwan, about almost similar, almost identical time frame. And in both countries' cases, they had these pressing international issues, North, South Korea with North Korea, Taiwan with the mainland, and relatively small, not terribly large countries. But they grew for 50 years. So Vietnam has already grown for 25 years, and is there any evidence at all to say that we can't keep going? We, something drastic is going to happen that the next 25 is going to be slower than the first 25? You know, we, we asked that question kind of rhetorically, and no one could ever provide any evidence to suggest that, oh, no, no, we got another 10 years at tops, after that we're, we're done, we'll go downhill. There's no evidence of that.
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Hey everybody. Before we continue with today's podcast, I want to share a little bit about our partner for the rest of this year's Innovators podcast season, Overseas Vietnamese. Starting with the Overseas Vietnamese Summit, co-hosted by Vietcetra, that's us, and OV. It's going to be back on in January 2nd, 3rd, and 4th, 2025, next year, in Ho Chi Minh City. If you're an OV professional looking to build your career in Vietnam, this is the event for you. Join us for insightful panels, top-tier speakers, and amazing networking opportunities. You can check the link in the description or scan the QR code to grab a ticket. Hope to see you there and in the network. Take care.
The next 25 years, I would say looking inward a little bit. The first 25 years powered by these fundamental businesses like real estate, manufacturing, agriculture, probably FMCG, you can bucket in that as well, among others. Now, the next 25 years, we mentioned technology, which is a very vague and very broad term. Do we also look at the idea of this brand Vietnam exporting? Because you look at Korea. So let's say the history of Hyundai. I remember when I was growing up, my parents had a Toyota Camry, pretty basic cars, like the standard American, like a Honda Civic kind of thing. Right? And then Kia and Hyundai were just starting. But I remember as like a 10-year-old kid, like, kind of like, I hate to say it, but kind of like looking down at that car because it's like, why would I buy that car when you can get a Toyota? You know, right? But now look at, look at it today. Arguably, it's probably better. I mean, so, but that was, that was 22 years ago. Yeah. So the, the question I have for you guys is, what kind of sectors, very specifically, and you don't have to name a specific company because perhaps companies haven't even been invented yet, but, um, what sectors do you primarily see driving those next 25 years? And is it with a focus on selling abroad? Because Korea, Taiwan, and Japan have, I think, let's say the last 25 years is really been built on trade, right? What happened is, um, the government opened up trade to many, many countries around the world and attracted capital for investment in, in factories, foreign investment, but also mobilized domestic capital, used the very, very large labor force that's available to start producing footwear and garments and so on, and, and build the economy from the bottom up. And that, that's actually referred to, we discussed in the book, called the East Asia Development Model. Right? It's where, where a country, you know, consciously channels its efforts into into building a, a larger manufacturing base, using the low-cost labor that's available, and increasing, um, standards of living, reducing poverty, improving healthcare, improving education, and so on, and pushing up GDP successively over the years. If you look at it from an economic point of view, the next 25 years, growth actually has to come to, to get to where we want to be, has to actually come from domestic consumption. We actually have to grow the companies in Vietnam, right? There isn't an, the, the consumer, middle class, let's say, in Vietnam is still relatively small, but it is going to be one of the largest consumer classes, populations in the world in the next 10 years, by 2030, according to HSBC. So it's really, really important that Vietnam actually reduces its dependence on trade, because it's hugely dependent on exports at the moment, and that's what makes it susceptible to global effects. It's white-labeled stuff too, generally speaking. It's not really brand Vietnam stuff.
That's right. It's not branded. So it's not marginal. It's very low-margin stuff. So, so from an economic point of view, we need to see the economy move a bit more inward, and, and the development of the domestic economy, the, the creation of a middle class, and, you know, 50, 60 million people, middle class is a very, very large middle class.
I want to talk about that. So two statistics, two stories, rather. One is this calendar year, Vietnam, at a global level, will contribute the fourth most in the entire world to the middle class, in terms of volume of people. It's 4 million people will enter the middle class technically by global standards. Above that, China, India, and I think it's Brazil or Indonesia, and Vietnam's number four, amazingly. Second story, not a, well, first was a statistic, second is a story. So I had a guest on the podcast, his name is Nam. He's a director at Unilever. And one of his categories is soap. Now, do you like liquid or hand soap?
Pretty much universal now. Exactly.
Okay. Well, see, your answer captures that. So, so liquid soap, in terms of category of premiumness, is higher than hand soap. Okay. And he said, in Vietnam, the trend has been an increase of sales of liquid soap. Now, why do you think that? Because exactly what I just said before, which is people have more money. Hand soap is going away. I remember when I first went to Vietnam, and you'd go to like, some really like local, local restaurants, and they have hand soap in the public restroom. I'm like, well, who is anyone using that? Right? But today, everything's liquid soap, right? Because I don't know, just more convenient, or people just have more money, or they expect it, basically, right?
I, hearing that story was just so funny, in a way, but also true. That something as small as that is actually very consequential because it just shows how many more people have money now to like buy something so little. Like, when your guys' reaction, it was kind of like, why is How asking his questions like such a like simple answer? Yeah, liquid soap. But I think you need, you used to, and still does, but perhaps less now, used to sell shampoos and washing detergents and little sachets because people would buy one little one dong. Countryside, I still think that's that's still there. Changing. But the fact that it's perhaps becoming less common, also a sign that income levels are.
Right.
Yeah. Other thing Vietnam has, I mean, not just the a large future consuming class, middle class, but Vietnam has been a, a net food exporter for 30 years or something like that. And for a while, it was a net energy exporter. I don't believe it is yet, but with renewables coming onstream, they can, they can have some freedoms that Taiwan, South Korea, for example, didn't have. They were reliant on energy from the outside, on food from the outside. And then within Vietnam, rare earth minerals, because of their situation, because of the wars, because of various things, the reserves are mostly known, but the mining has not yet taken place of a variety of rare earth minerals that the world needs. And so Vietnam, I think, reserves is already number two behind China, but in output production, it's, I'm not sure where it's on the list, but it's, it's way down because it hasn't really started yet. And so, you know, if you were to pick and choose, well, where should I go to to really live in a country that's going to make it, that's going to do the 50-year thing? Mhm. I need a place with lots of people. I need a place that doesn't have too much reliance on the outside for food, energy, basic ideas. Has in the ground still some, some rare, some valuable assets that are yet to come. And then has the cultural constraints that we've already talked about, you know, commitment, education, uh, an extraordinary work ethic, uh, trade agreements with the world. Basically, because the idea that you can go from shoes and garments to basic electronics to higher electronics to something even higher, that alone isn't going to be enough. It's going to have to be, okay, a domestic market consumption locally.
Is there any other country in the world currently in the same situation? Well, like, did you, did you research that at all?
Yeah, that was the thing. How does a country become rich? Because the Philippines has 100 million people, give or take, and, you know, arguably they've been free to develop longer than Vietnam has. Vietnam had the war up until '75, you know, didn't come out until 1986. US embargo wasn't lifted until 1995. And so, in a way, you could say, well, Vietnam's only been at it for like, less than 30 years because of all those factors. During those 30 years, countries like the Philippines, Thailand, Indonesia, Malaysia, India, they could have done the same thing. They could have grown at the same rate. They could have pursued this global trade, trade on, you know, on steroids, and moved themselves slowly up the manufacturing, um, you know, value had to scale. And they have, but certainly not as quickly as Vietnam has in the last 20 years. You know, so to answer your question, is I'm not sure. But we looked at a lot of countries that, you know, have large populations, and, but they have a lot of natural resources. South American countries, for example. Egypt. I was in, there's 100 million people in Egypt, on the Nile, close to Europe, close to markets. Why aren't those people being mobilized to to create factories and and lift so many people out of poverty? This is it. But we, you know, the economic theories would look at a country and say, these countries all have a lot of things going for them. They can become rich countries, but they don't. Right? As Sam said, Philippines, Thailand, Indonesia have had chances over the last 60 years to grow their economies like South Korea and Taiwan did, and they haven't. Right? So what are these different factors that that are at play that that that disrupt growth? And that's what we talk about in the book. Because the South Korea and, and Taiwan model are well-known. Everyone knows how they did it. They have a model, East Asian Development Model, you know, export yourself to wealth, keep going up the value chain, and, you know, start with agriculture, start with land reform, especially in Taiwan's case. And, and those two countries are democracies. So the idea that you have to be a, a strong state or democracy, none of that holds water, because, well, they weren't democracies growing fast, right? The democracy came later. Um, but they continued to grow fast. Yes.
Yeah, really fascinating stuff, guys. We just have two last questions. I'm sorry, I optimized this podcast to be 45 minutes, otherwise people tune out. So we'll have to do a second one. But what lessons can other developed countries, following up from my previous question, learn from Vietnam's journey in the last 25 years?
What I think about when I, when I think about that sort of question in regard to the book, and, and one thing I'm proud about is the way that we've looked at economic growth for Vietnam, but it can be applied to other countries. Like, we, we were just discussing, I think countries have to look inward and say, well, what are the drivers? What are the things that are, um, that we have the resources, the strengths, essentially, like a SWOT analysis? What are the strengths that we have? It's not just population, geography, for example. The impact of geography on how a country develops is significant. But people don't really take this into account when they're planning a country's future and its growth. Um, so, you know, we listed 17 drivers that, or cards that Vietnam has. There are others. Other countries will have other ones. I think, um, they, countries need to think like that and say, what are all those resources, and how can we best use them? And then correspondingly, think about what the barriers are, right? We also write about that in our book, and we identified, I think it's about seven or eight different issues or challenges that country, that Vietnam could face in the years ahead. But, if they know what they are, they can plan to address them, right? So that, that's a very important part of it as well. We have a whole chapter, chapter 11, is entirely about the risks. The remaining risks. So we didn't whitewash this thing. I mean, dedicating an entire chapter to what could go wrong, is, is, I think, um, shows our seriousness, if you will. Well, we won't talk about it on the podcast because people want to know, they have to buy the book. So, um, chapter 11.
I have one last question for you guys, and both of you, I'd love to hear. Um, I'll start with Brooke, perhaps.
So I always like to conclude the podcast with one final question. Uh, the question is, we have you on the show here today to talk about not only this book, but just reflecting on 25 years and what the next 25 will be. Uh, what's one topic or industry or even a person that you'd like to have on this podcast so you can learn from them as an individual?
It would be F. Okay, the chairman of In Group. And aside from just being super curious about about the guy and what he's done and all that, for a, um, an instrumental, a, a teaching moment for all of Vietnam, is I would want to say, I would want to ask him and have a discussion with him about how is it that you could think so big and just do it? Just say, "I'm going to make this. I'm going to make electric cars and I'm going to try to sell them in America." I'm going to do something like a Chiao Tai, Korea, Honda, you know, thing where we, we, we venture to try to serve as many people as we can. Thus, Vin Mac, Vin Mark, V, Edu, you know, you know, so on. And while I'm hugely curious as to how those countries are doing and how he got the capital, what about the debt loads? You know, all those issues. I think the bigger, more interesting issue would be, that's big. H. How did you have the wherewithal to say, "I'm going to do this?" Because, um, individuals make companies and countries. You can talk to any Singaporean and you take Lee Kuan Yew out of the mix of Singapore as an individual, as a leader, Singapore would be a very, very different place than it is today. MH. So it came down to one individual, one man. I believe he was a lawyer, if I'm not, if I'm not mistaken. And that one man moved a country forward. And in the case of Vingroup, um, and all that, all the chatter we hear about Vingroup and all that happens with Vingroup, I would want to know, well, is it just you, Mr. V? Is it you? And my gosh, that's such big thinking because my message to Vietnamese, especially to young people, is, my God, think big. Think big. Think like the Japanese guys in 1950, 50s, who said, "We're going to build. We're going to win the Olympic Games in 1964." MH. Think like the Korean guys in 1978, says, "We're going to win the 1988 Olympic Games." You just have to think big. And this individual, Mr. V, seemingly did so. And I would be curious as to how, why, when, what issues came up, all that.
Okay, very good. That's a great answer, very well articulated. Now, you can come back to it. Um, actually, I think you should interview Ton Nu Nguyen then. Okay. Um, Sam and I have recently worked with her at an event that she hosted in Ho. The moment, I think, the moment, and I think there's two parts. I think one, her own story, I think is probably incredible. I, I think she's really impressed by by what she's achieved in life, and it would be great to hear her own personal background and the challenges and, um, and what, what she was thinking at different times. Just fascinating, um, to understand that. And then the second part to it is, is the moment. What she's trying to do, she is trying to create this brand Vietnam and give people, uh, Vietnamese more pride in their country and attract talent back to the country. And I think that again, it is the moment. It's sort of what that, that starting point that, that you said today, why now? Well, we're not the only ones that see it as now. It is a really, really important time for Vietnam. I think she is another one that that wants to see the country move forward in a very exciting way, and it'll be interesting to hear what she has to say.
Great. Fantastic. Well, thank you so much, the two of you. Uh, Brooke, CEO of V Capital Asset Management. Uh, we have Sam, writer and author, couple books, including the more recent one that's just been released in both languages. We'll include the links below in case you'd like to buy a copy. Um, thank you so much, you two, for being here. It's been a pleasure. And again, sorry to cap it out of the time. We have to get on with our mornings here, but I'm sure we'll have you on the show again very soon. Opportunity. Thank you, guys. Thank you, everyone for tuning in for another episode of Vietnam Innovators. See you next time. Bye-bye.
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Bye-bye. Hey everybody. Uh, thanks for tuning in for another episode of the Vietnam Innovators podcast. And before we finish today, I just want to share a bit about our partner for the rest of this year's season, Overseas Vietnamese. Starting with the Overseas Vietnamese Summit, co-hosted by us, Vetra, and OV. It's back on from January 2nd to the 4th, 2025, in Ho Chi Minh City. We want to introduce you about why. So if you're an OV professional looking to build your career in Vietnam, this is the event for you. You can join us for insightful panels, top-tier speakers, and amazing networking opportunities. You can check the link in the description or scan the QR code to grab a ticket. So we hope to see you there and in the network.
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