Abstract
Entrepreneurship plays an indispensable role in the economic development and poverty reduction of emerging economies like Vietnam. The rapid development of technologies during the Fourth Industrial Revolution (Industry 4.0) has a significant impact on business in every field, especially in the innovation-focused area of entrepreneurship. However, the topic of entrepreneurial activities with technology applications in Vietnam is under-researched. In addition, the body of literature regarding entrepreneurial finance tends to focus on advanced economies, while mostly neglecting the contextual differences in developing nations. Therefore, this research contributes to these topics by investigating the main characteristics of a high potential market for entrepreneurs in Vietnam, which is the English language training market (ELTM). It also aims at indicating the impacts of technology on the entrepreneurial firms within this market, with an emphasis on financing sources. To answer the research questions, this study employs a qualitative analysis and conducts 12 in-depth, semi-structured interviews with entrepreneurs and researchers in the field. The key findings in our study highlight the main contributing factors to the growth of the market, both universally and context-specific for a developing nation like Vietnam. It also lists the leaders in each market segment and the industry’s potential profit margin. The results also show that most entrepreneurs in the ELTM utilized private sources of finance rather than external ones, such as bank loans. It again confirms the idea from previous works that even with the rapid development of the economic and technological landscape, entrepreneurial activities in general barely benefit from additional sources of funding. However, it also points out the distinct characteristics of the ELTM that may influence these financing issues; for example, English training services usually collect revenues from customers before delivering their classes. This is of advantage for entrepreneurs in this area and helps significantly reduce the financial barriers. These findings, which are among the first attempts to contribute to a better understanding of entrepreneurial opportunities in the Industry 4.0 in Vietnam, provide valuable insights for policymakers and entrepreneurs, as well as investors.
Highlights
In Vietnam, entrepreneurship has been a major driver of the economy since the overall economic reform known as Doi Moi in 1986 (Vuong 2016, Vuong et al 2019)
The themes related to the main characteristics of the English language training market (ELTM) in Vietnam can be divided into two parts, namely the factors affecting the growth of ELTM and market leaders, as well as the profit margin of the ELTM
It was the case that one participant after another reported customer demand as one of the most critical factors affecting the rapid development of the ELTM
Summary
In Vietnam, entrepreneurship has been a major driver of the economy since the overall economic reform known as Doi Moi in 1986 (Vuong 2016, Vuong et al 2019). During the mid-1980s, GDP per capita stagnated between US$200 and US$300 (Vanham 2018) but soared to US$6900 in 2017 (Central Intelligence Agency 2020). This leads to the rise of a middle class as a strong catalyst for increased consumer spending (McKinsey & Company 2019), with significant changes in their purchasing behaviors, for example, more substantial investment in education for their children. In the era of globalization, emerging economies, including Vietnam, need to be open and integrated in terms of cross-border trade and investment, heightening the need to communicate interculturally using English as the lingua franca (Vuong and Napier 2015). As a result, during the past decades, English has gained its dominance as a foreign language in these nations
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