The National Assembly Chairman said that Hanoi needs to have a venture capital fund, because this is a successful model in many countries, suitable for scientists to confidently contribute.
On the morning of September 20, the National Assembly Standing Committee gave its opinion on the revised Law on the Capital City. Article 25 of the draft states that organizations and individuals in charge of scientific and technological tasks using the Hanoi city budget are allowed to apply the form of funding allocation based on results and products.
In addition, enterprises and scientific and technological organizations are supported by the city budget to purchase and operate machinery and equipment to carry out key scientific and technological tasks of the capital. Enterprises are supported with a portion of the city budget to establish research and development centers and laboratories in key areas of the capital.
Commenting on this content, National Assembly Chairman Vuong Dinh Hue said that using budget money for investment in startups and innovation is "unreasonable".
Mr. Hue said that investing in innovation is a form of venture investment, which means "it's only 5 wins - 5 losses, even 10 out of 10 you only win 3, lose 7". If we use the budget to spend on venture investment activities, it will be very difficult for scientists to work. "If we spend the budget and then fail in the future, it will be very tiring to assign responsibility. I suggest further research, should there be a venture capital fund like Korea, Israel", Mr. Hue suggested.
National Assembly Chairman Vuong Dinh Hue speaks on the morning of September 20. Photo: National Assembly Media
Citing international experience, he said that South Korea has an Angel Fund model, with the government mobilizing tens of billions of dollars to serve innovation, science and technology. Israel - one of the leading countries in scientific discoveries - also has a venture capital fund in the form of shares. The state only holds 49%, the rest is private ownership.
Mr. Hue suggested that Hanoi study this model, with the city budget only supporting a part or the first phase. This helps resources for innovation activities not be affected by complicated regulations and procedures but operate in the form of a venture fund.
Presenting the draft earlier, Minister of Justice Le Thanh Long said that the revised Capital Law sets out many preferential policies for innovation and application of science and technology development.
Beneficiaries of incentives include scientific research activities, application and transfer of scientific and technological advances; innovative enterprises, creative startups in key areas of the capital; science and technology enterprises in universities, research institutes, incubators, and technical establishments.
Organizations and individuals in charge of scientific and technological tasks using the City budget are allowed to apply the form of funding allocation based on results and products. This regulation expands the scope of subjects eligible for funding allocation compared to the Law on Science and Technology (Article 52).
In addition, the income of experts and scientists from presiding over key scientific and technological tasks of the Capital and the Capital region is not subject to personal income tax.
The draft Law on the Capital (amended) was submitted to the National Assembly for comments at the 6th session (October) and is expected to be approved at the 7th session in 2023.
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