Asian Tiger or Copy Cat: Why Unlocking Innovation in Vietnam Requires Lawyers, Not Schools

Everything is Fair Game in Vietnam

Everything is Fair Game in Vietnam

Vietnam needs more intelectual property lawyers and a strong enforcement system.  Sounds boring?  Perhaps so, but data from the World Bank 2011 report imply it may be the only way to rocket Vietnam from a third-world manufacturer to a global competitor like South Korea.  Yes, it’s even a higher priority than new schools.

Asian Tiger or Copy Cat

What’s the difference between the Asian Tigers (Hong Kong, Taiwan, Korea, and Singapore) and the rest of Asia? If you invent something in a Tiger Country, you have reasonable assurance that your invention won’t be stolen and copied thanks to an army of lawyers, strict and robust IP laws, and a cooperative enforcement agency (the government) that will fine or jail anyone stealing your trade secrets.  As a result, the Tigers enjoy the highest living standards in the world and is home to major brands like HTC, Samsung, HSBC, and LG.

In contrast, step into China or Vietnam (or most places in Asia, for that matter) and you’ll find that nothing is sacred.  A walk down to the Saigon Centre will reveal imitation Louis Vuitton purses, fake Northface backpacks, and yes, even Google branded toilet paper.  There is little concept of branding as anything can be copied.  Businesses compete by driving prices to rock bottom, cutting corners and quality along the way.  Who can blame them?  What’s the use of wasting time on building a quality brand or innovating when you can just wait and copy the guy next to you without repercussion?  As a result, Vietnamese consumers demand foreign products and domestic brands are relegated to compete at the bottom for razor thin margins.

It’s simple: protect people’s ideas and they’ll find it worthwhile to innovate.  Innovation means a stronger economy.  It is no surprise that the ten countries with the highest standard of living are also the ten countries with the toughest IP laws and enforcement agencies, according to the Taylor Wessing Global Intellectual Property Index and Doing Business 2011, World Bank.

IP Protection Ranking, Doing Business 2011, World Bank

IP Protection Ranking, Doing Business 2011, World Bank

IP Protection More Important Than Schools

We live in the Internet Generation.  With a population averaging 26 years old, Vietnam embodies this generation more than any country in the world.  Saigon is young, tech savvy, and hungry.  They can learn from anywhere.  Stanford, Harvard, and Berkeley have online video courses.  There are tutorials on just about subject on web.  There are countless stories of art majors who become star developers by learning to code online.

The Internet generation is not as reliant on traditional schools as the generations before them.   What the Internet Generation in Vietnam needs most is a system that will protect their ideas and innovations.  They need to be able to openly innovate and partner with each other without having to jealously guard every idea.

There are faint signs of a start-up community building in Vietnam, but I fear that it is in danger of collapse if the IP system is not fixed and enforced.  The next few years will determine if Vietnam will grow up to be an Asian Tiger, or just another Copy Cat.


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10 Responses

  1. Robert says:

    Thank you for an interesting and informative editorial. You mentioned some very critical issues for reflection. I think your discussion raises several important questions.

    The World Bank data shows all countries as being considered developed countries. I wonder where is Vietnam in its development?

    Vietnam needs to advance to a certain stage before it can consider implementing IP laws. Do you think this is necessary? Do you think innovation and IP laws should be given priority so they can advance the country’s economic standard faster than other means?

    You mentioned, “If the IP system is not fixed and enforced.” This implies there are some existing IP laws already. If so, I wonder who influences them: is it mainly the government sector?

    I think the obstacle will not be the “young, tech savvy, and hungry,” but the government regulations.
    What determines in the next few years whether Vietnam becomes an Asian Tiger or Copy Cat? Is it not the government? It seems the task to becoming an Asian Tiger will not start to happen until the government changes its policies.

  2. Hai says:

    I appreciate the sentiment this article takes in addressing the possibilities of a developing Vietnam. It, however, seems to misread many of the social conditions that produce the effects of intellectual property theft (and third world conditions connected with it). Robert has pointed many of these out in his previous response so I won’t reiterate them.

    My main issue with the article is it’s simplistic assessment of the “Asian Tigers” and their “Copy Cat” counterparts. You’ve assumed that correlation somehow amounts to causation – that because countries like Taiwan and South Korea have stringent IP laws, it’s the IP laws themselves that help foster innovation and development. What does IP matter to the average Vietnamese citizen? Do small merchants care about such laws as long as they make enough money to subsist? Higher living standards, freedom of expression, free exchange of ideas: these are the conditions which produce innovation, not IP laws. What would be the point of these laws but to punish the citizenry for their poverty?

    I’m disappointed that a philanthropic organisation like OneVietnam would suggest such an commercial solution to a difficult social problem. Stringent IP laws in Vietnam now would only benefit those already rich and in power while neglecting the pleas of it’s poor.

    It’s important to look in-depth at the underlying causes of Vietnam’s development – but we should do so critically and thoughtful. There will be no simple answers to such long standing problems.

    • James says:

      Thanks for the response Hai. I think IP rights addresses the single most important principle of freedom: the right to own what you create. Vietnamese people need jobs that pay well, and that means we need to go beyond manufacturing. To do that, we need innovation. As I mentioned in the article, what is the incentive to spend time and effort innovating if others can just easily steal your ideas?

      IP is not just for the rich, rather it ensures that no matter your status, your ideas, and property, can and will be protected and you will be rewarded for creativity and hard work.

      • Hai says:

        Hi James,

        I don’t have a problem with the eventual enforcement of Intellectual Property rights. In fact, I think it should be one of the final steps to ensure a thriving Vietnam. And I appreciate forums like OneVietnam which offer us an opportunity to discuss how best to apply our philanthropic efforts.

        I disagree, however, with your chronology. I don’t think the current state of Vietnam merits significant attention to intellectual property rights. As I said in the last response, “[s]tringent IP laws in Vietnam NOW” would only serve to further dichotomize class structures. Here, I think, is where we diverge the most: you believe that the enforcement of IP laws will produce higher paying jobs (with an anecdotal reference to the “young, tech savvy, and hungry” Vietnamese citizenry). But according to recent statistics (UNICEF), only 20 in 100 people in Vietnam are internet users. Of those, how many will prove to be productive innovators? Unless you believe in trickle down economics (and the wizardry that comes with it), what will be produced will be more low-pay manufacturing jobs.

        I believe our interests are best served attending to expanding the middle class in other ways(as much as I’m loathed to think about the bourgeois tastes and values that go with it). Education should be first and fore most. Instead of a select group of internet savvy users, why not help produce a litany of new tech savvy critical thinkers? A continued education would expose more people, more regularly to technology. It would also teach them better economic strategies, better written and verbal communication skills, and better ways to adapt to a changing environment. Once we achieve these goals, IP enforcement would be exponentially useful. Until then, it would reinforce the socio-economic conditions that currently persist.

  3. Kimberly Truong says:

    I find it interesting that you used the term “third-world” to define Vietnam. Vietnam is, in fact, still a developing nation. “First world,” “second world,” and “third world” are Cold War terms. First world nations are The United States, Canada, Australia, and most of western Europe– allies during The Cold War. “Second world” nations were/are The USSR and its allies during The Cold War, which includes Vietnam. The rest of the world (that were not involved in the war) were “third world” nations.

    Though many use “third world” and “developing nation” interchangeably, it is incorrect.

    • James says:

      Hey Kim , yes, I use the term interchangeably. I want to avoid debating semantics; both terms suggest the same position on development (mainly manufacturing economies with high poverty levels) regardless of etymology.

    • Hai says:

      Kimberly,

      I believe what James is referring to are the economic conditions (he uses the term “Third-Word Manufacturer” in the beginning) and not political ramifications that go with the term. Saying that Vietnam is a “third-word nation” is indeed wrong. But saying “developing manufacturer” doesn’t quite capture the situation either. After all, saying that Vietnam is a third-word nation is different from saying that it has “developing nation” conditions. The latter term sanitizes the sometimes abject poverty associated with our connotative understanding of the “third-world.” Semantically it may be off, but rhetorically I think its appropriate. Don’t get me wrong, semantics is significant. It distinguishes waterboarding as either “torture” or “enhanced interrogation techniques.”. But I think we can forgive the article for this mishap. Just this once though.

  4. Daniel P. Luce says:

    What a wonderful and timely essay. Thank you so much for presenting an opinion that I’ve held for as long as I’ve loved Vietnam, and you’ve presented it in a much better way than I can.
    Potential American investors in the USA that would like very much to show their confidence in Vietnam’s growth by investing, are reluctant to do it out of fear of changing official policies and lack of protection of their interests. Even when their interests and those of Vietnam are the same.

  5. Goldman Sachs says:

    I wonder which Major or copyright lobby is paying for this article. IP means innovation, yeah, sure dude, Remember Open Source ? Linux ? Android ? A bit of English would be a good start, so that Vietnamese could double check these ACTA, CISPA, PIPA aggreements which make the US a thirld world country with more than 60 million people on food stamps, notwithstanding the homeless. Economy ??? hum…

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