Why are Korean founders setting up shop in Vietnam?

Past behavior is generally seen as one of the best ways to predict future trends. If the maxim holds true, South Korea’s economic development could show where Vietnam is heading.

At the Tech in Asia Conference in Jakarta last week, Asia Partners co-founder and managing partner Nick Nash outlined why Vietnam looks set to follow in the footsteps of South Korea and build strong electronics and automotive industries.

Nash talked about how countries that have strong textile sectors typically develop automobile and semiconductor manufacturing capabilities later on, which was the case for South Korea.

Vietnam has long had a large textiles industry and is now home to a burgeoning semiconductor sector. The industry was worth US$4.2 billion in 2020, according to Asia Partners’ analysis.

In addition, the country’s recent entry into the automotive space with VinFast has been well-documented.

The chart above also indicates support for Nash’s hypothesis as South Korean founders appear to be flocking to Vietnam.

Using LinkedIn data, Asia Partners found 250 founders, co-founders, and CEOs from top universities in South Korea who have set up shop in Southeast Asia. Of that figure, 21% were in Vietnam, the second-largest group behind only Singapore.

Good news for the likes of FPT and VinFast? Time will tell, but it appears both Nash and South Korean executives are bullish on Vietnam.

Credits

Graphic: Peter Cowan

Editing: Lorenzo Kyle Subido