Small and medium enterprises (SMEs) have been at the core of Vietnam’s strategy for inclusive growth and economic transformation. Vietnam has experienced unprecedented growth and poverty reduction, turning the country into a middle-income economy relatively quickly. Most growth came from structural change with labour force movement to the manufacturing sector. This change has largely happened without worrying trends as regards income inequality, especially within urban areas. SMEs have been key for this transition following the Doi Moi reform process. Vietnam adopted a dual-track approach allowing private firms to expand alongside the state sector as long as they fulfilled their quotas at state-given prices. Also important for the development of a thriving SME sector has been reform design and willingness to experiment. These initiatives included state-owned enterprise (SOE) reform, foreign direct investment, industrial zone policies, and business-related administrative initiatives, with significant state influence remaining a core feature of the development strategy.