Rising unemployment drives surge in youth-led start-ups

Rising unemployment drives surge in youth-led start-ups

A significant number of people have turned to entrepreneurship as a means of survival and growth during these challenging times.

The labour market is becoming increasingly challenging and competitive. Photo baotintuc.vn

Amid market fluctuations, global instability and rapid technological change, many workers are adapting by embracing continuous learning and transformation. A significant number have turned to entrepreneurship as a means of survival and growth during these challenging times.

A tougher job market

Thu Hương, a professional with over 15 years in the wooden furniture import business in HCM City, was laid off just two months into her new role. The company, hit by a sharp drop in orders from major markets like the US and Europe and burdened by new tax policies, was forced to downsize. Despite her seniority and a monthly salary of nearly US$2,500, Hương found herself among the casualties.

Former head of communications at a European medical equipment company Xuân Lan faced a similar fate. Her contract was terminated early amid corporate restructuring. Though she received a severance package, she continues to struggle with finding a new job that matches her qualifications and previous salary expectations.

These are not isolated cases. Across HCM City and other urban centres, stories of layoffs have flooded social media since Tết (Lunar New Year). Office workers, factory employees and skilled workers alike have shared their shock and frustration at sudden layoffs, thesaigontimes.vn reported. 

According to data from HCM City's Department of Home Affairs, more than 45,800 people have claimed unemployment benefits in the past five months. Nearly half — approximately 22,400 people — are under the age of 35. Alarmingly, over 9,300 of them hold a bachelor's degree or higher.

Analysts say the dual impact of technological disruption and global economic uncertainty has prompted many businesses to reduce staffing and freeze hiring. Workers with five to 20 years of experience are struggling to secure new roles, while fresh graduates face an uphill battle entering a tightening job market.

Middle-aged professionals, especially those in administrative roles or transitioning from public to private sectors due to restructuring, are also finding it difficult to adapt to the increasingly competitive landscape. 

Small start-ups gain popularity

The labour market is becoming increasingly challenging and competitive. Photo baotintuc.vn

Amid challenges in the traditional labour market, many young people are seeking new paths by launching start-ups instead of waiting for job opportunities from large corporations.

The trend now favours small, flexible business models that are easier to operate and manage risks. Franchise models, especially in the food and beverage (F&B) sector, are becoming a popular choice.

Hải Đăng, who had dreamed of opening a coffee shop since college, turned to franchising after losing his job. This approach allowed him to minimise initial risks and leverage an established system and brand reputation, making it easier for inexperienced entrepreneurs like him to start their business.

Large enterprises like Napoli Coffee, which has over 3,000 coffee shops, are increasingly backing franchised branches by providing initial capital, supplying raw materials, offering staff training and assisting with brand promotion.

Napoli Coffee CEO Nguyễn Đức Hưng told thesaigontimes.vn thathis company contributed VNĐ30 million packages to reduce the financial burden on young franchise owners, who need to cover VNĐ90 million of the start-up costs themselves. 

Beyond urban start-ups, there is a growing movement of young people returning to rural areas to start sustainable businesses in clean agriculture, livestock breeding and circular economy models.

After losing their jobs, Minh Tiến and his wife moved back to the Central Highlands Province of Đắk Lắk to cultivate coffee and fruit and raise livestock sustainably. They believe their available land and rising demand for clean products position them well for long-term success.

Green business models

Aside from franchises, young entrepreneurs are increasingly embracing green businesses in line with the global focus on sustainable development.

These ventures prioritise reducing waste, using recycled materials and producing organic products. From rice straw packaging and plastic-free cosmetics to clothing recycling initiatives, start-ups like these are gaining traction among customers and catching the attention of international investors.

Alongside sustainability, the digital economy is fuelling a vibrant start-up ecosystem. Technology-driven fields — especially artificial intelligence (AI), online learning platforms, e-commerce and chatbot applications — are booming. Leveraging digital platforms, young entrepreneurs can connect globally and scale quickly without the need for large physical infrastructures.

The online newspaper cited Kevin Tran, venture capitalist at 500 Global in the US, as saying that a strong increase is seen in AI start-ups from Southeast Asia, particularly Việt Nam. Young people here are quick learners, and the tech model allows them to access the global market from their very first year.

Despite growing enthusiasm, experts caution that entrepreneurship remains challenging. A realistic mindset, avoiding blindly following trends, continuous learning and engaging with business communities are vital. Success depends on building viable ideas, identifying the right market niche and planning for the long term.

Trần Anh Tuấn, vice president of the Hồ Chí Minh City Vocational Education Association, said that young people possess creativity and determination.

He highlighted the important role of the State in fostering a sustainable start-up ecosystem through supportive policies, investment funds, training programmes and streamlined administrative procedures.

Bizhub