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Go East, Young Entrepreneur! Wake-up call for America

James Vuong first introduced the concept of VIC to me. We were eating Vietnamese pho beef noodle soup at an outdoor food court in Hanoi. When I wondered if it were another dish I hadn’t sampled yet, he gave me a little triumphant grin and explained that VIC stands for Vietnam, India, and China. It takes some getting used to, after the all hype about BRIC—Brazil, Russia, India, China—as the next economic frontier.

But Vuong, a young venture capitalist in Vietnam, may be on to something. The firm that Vuong works for in Vietnam, Pat McGovern’s Boston-based IDG Ventures, invests hundreds of millions of dollars in tech startups in Vietnam, India, and China and has made tons of money. China is the gold mine, India is the land of promise, and Vietnam is the frontier.

Nguyen Hoa Binh of eBay’s Peacesoft with IDG’s James Vuong

IDG is a pioneer with this strategy. This odd-seeming group of nations belongs together because of a growing number of overlapping trends. Of all the dragon and tiger emerging economies in the East, the VIC countries best represent the entrepreneurial spirit and venture capital rush of Startup Asia.

Multiple Silicon Valleys have sprung up in Beijing, Shanghai, and Bangalore, and even Hanoi and Ho Chi Minh City could get on the tech map soon. From John Doerr’s Kleiner Perkins to Jim Breyer’s Accel Partners, all the Sand Hill Road shops are parked in Asia’s boomtowns.

Entrepreneurs and college graduates have landed in Asia’s tech hubs, too, and haven’t looked back. Alice Wang grew up in San Diego, California, and left Yale University during the spring semester of her junior year to move to Beijing and take a job as a sales director at GroupOn China. She knew it was risky and challenging, but the lure of this tantalizing opportunity to join China’s tech race was irresistible. Wang spent her first few weeks working past midnight to meet incredible sales quotas and described it as chaotic but “very exhilarating.”

This self-assured dynamo still found time to host a dinner for me in Beijing with a dozen 30-and-under members of a global entrepreneur network, Sandbox, she spearheads in China. There’s a good chance your daughter, too, and certainly hundreds of the followers and friends Wang has on Twitter and Facebook will land in Beijing and stay for a startup career. Who isn’t studying Mandarin today to get ahead?

The chance to become rich and famous with a startup is no longer just an American dream. It’s happening in Asia, in record numbers. Consider:

1. Since 2005, more than 6,000 startups in Asia—56 percent of them in India and China—have been backed by venture capital.

2. China and India accounted for 13 percent of $37.8 billion invested in startups globally in 2010. That’s up from 5 percent in 2005. China is the second-largest venture market in the world, followed by India.

3. China ranks fourth in the world for new patent applications, up from tenth place in 2005. Two giant Chinese companies—ZTE Corp. and Huawei Technologies—rank among the top four businesses worldwide that are filing for patents.

4. China ranks tops in the world for digital communications, with 440 million Internet users and 840 million mobile service subscribers, followed by India’s 673 million subscribers. Vietnam has a relatively high Internet penetration, with more than one-quarter of the population with web access and 78 million mobile service subscribers in a country of 89 million people!

Asia’s innovation hotspots are fast emerging as first-choice destinations for bright young entrepreneurs. China and India have grabbed the brass ring and are attracting top talent, capital, and tomorrow’s leading startups. Meanwhile, Vietnam emerges with mobile gaming and search, Singapore helps to seed budding entrepreneurs with government handouts and skillful coaching, and Taiwan lures startups to move beyond their base in churning out more than semiconductors and electronic goods.

The supercharged emerging markets of Asia promise to deliver the next Facebook phase—a turning point that will spark a creativity surge like the social network did during this decade’s social media boom. Startups create jobs and wealth, plus enthusiasm for future innovations. It’s a wake-up call for America.

Go East, Young Entrepreneur!  And read Startup Asia, by Rebecca A. Fannin with a foreword by Kai-Fu Lee