A investor looks at stock market screens at a securities company in Hanoi, Vietnam, April 20, 2016.
A investor looks at stock market screens at a securities company in Hanoi, Vietnam, April 20, 2016.

Some high-tech start-up companies in Vietnam are attracting investment from several venture capital firms that are betting that the nation's fast-growing economy, improving investment climate and relatively inexpensive workforce will mean a profitable future.

Vietnam's technology sector attracted favorable notice by creating a popular game program called "Flappy Birds," and the country has been home to branches of major foreign technology companies for some time. Vietnam's workforce is cheaper than China's and includes many people with computer and math skills.

One of these investors is "500 Startups," which plans to spread about $10 million across 100 or more fledgling firms. Partner Eddie Thai told VOA that increased use of the Internet and mobile phones and a rising generation of technology-oriented entrepreneurs have made good progress.

WATCH: Eddie Thai talks start-ups

He said some "products or business models that have succeeded elsewhere just need to be localized for Vietnam." It's a process aided by local entrepreneurs who "have a familiarity with a uniquely Vietnamese problem or an emerging-market problem that is not yet being addressed by the technology entrepreneurs in, say, San Francisco or London or Tel Aviv."

Thai is a Vietnamese-American who combines foreign education and experience with an understanding of the Vietnamese market and is one of a small number of overseas Vietnamese who are investing in the ancestral home. Thai said foreign expertise may be useful at this time because Vietnam is at a "critical point." He said the nation has already taken the easiest and most obvious steps toward growth and will have to do more complex and difficult things to keep expanding at a strong pace.

New approach

An expert on Vietnam's development said Vietnam is an emerging economy and not a particularly good place for start-ups to flourish. In a Skype interview, Indiana University Professor Anh Tran said start-ups get a lot of attention from government officials, investors and scholars but are hampered by the nation's weak infrastructure, corruption and inadequate training for some workers.

Tran said start-ups usually have to come up with a new approach to "technology or management or marketing in order to be successful." He said Vietnam is "not at the frontier" of these areas. He said success is more likely for established firms with "capital and technical ability" that adapt "existing technology from a more advanced country."

But Tran also said Vietnam benefits from a stable political environment and a "very entrepreneurial," hard-working labor force.

That labor force would benefit from the success of small and medium-sized companies, according to Kim Eng Tan, a senior director of S&P Global Ratings in Singapore. Tan told VOA that smaller firms tend to be less capital-intensive than huge multinationals, making them a particularly good source of jobs.