Does it stepping up the development of the ICT industry in Vietnam?
While Vietnam's economy is increasingly driven by manufacturing, the technology and services sectors are fast catching up. The Ministry of Post and Telematics (MPT) has recently issued an instruction, “Strategic Orientations for the Development of Information and Communication Industry (ICT) of Vietnam in 2011-2020”, which is called the “Taking-off strategy”. This new policy claims that after 20 years of renovation, the post and telecommunications sector of Vietnam has made comprehensive and outstanding progress, quickly narrowing the gap of development with countries in the region and the world.
In reality, to achieve these goals, it means Vietnam has to investing on IT and training which will be the priority task. Vietnam will have to perfect its laws and policies to facilitate the development of ICT. Can Vietnam achieve this?
Vietnamese Telecom Industry
Vietnam's telecom market was worth US$2 billion in 2005. Its teledensity is at 18.41 per 100 people, meaning that Vietnam's telecom industry is expected to grow. Between 2001 and 2004, the country's telecom sector grew 47.8 percent each year. In the last 3 years, Vietnam’s mobile phone market has boomed, exceeding the economy’s 8% average growth rate. The number of subscribers increased by 7 million, a 70% jump, in 2006 to reach 17 million people. It is predicted by Wireless Asia that Vietnam will have 46 million mobile users by 2010, growing at a rate of 270% from 2007’s level. By 2008, the number of cellphone users in Vietnam is expected to increase to 21 million. The International Telecommunication Union has also named Vietnam as the world's second fastest growing telecom market, after China.
Workers on the Market
Vietnam has 60 percent of population under 30 years old and has a high literacy rate of 96 percent. These factors have contributed Vietnam being included among the world's top 20 destinations for software outsourcing and information technology services.
Comparison Among Countries in Asia
Vietnam's software sector was also put on the map after IBM opened its software service office in the Quang Trung Software Centre. Japanese investors also consider Viet Nam as one of the most effective destinations for software outsourcing behind China.
In 2006, the software industry generated US$350 million in revenue, of which $110 million was from outsourcing. There are currently around 750 software firms employing 35,000 people. Many companies have already received international quality control and standards certificates including CMMI-4 (Capability Maturity Model Integration) and ISO 9001.
Large U.S. investment in Vietnam in this Sector
In 2007, Intel announced an investment of US$300 million to build a semiconductor assembly and test facility in Ho Chi Minh City. Later this investment was raised to one billion dollars. This marked the first such investment by the semiconductor industry in Vietnam. Another U.S.-based firm, International Data Group (IDG), the world's leading technology media, research, and event management organization, pledged to help Vietnam develop its information and communication technology (ICT) industry. IDG was growing at 6% in Vietnam and has invested more than US$100 million in Vietnam by mid 2007.
In mid July 2007, the U.S.’ Global Equipment Services (GES) company was granted an investment certificate in HCM City. GES will invest $36 million to build a hi-tech centre inside the HCM City Hi-tech Park. GES plans to hire around 500 Vietnamese engineers. The GES plant will begin to operate in September 2008.
Even with the fast pace growth in the ICT sector, Vietnam still faces some serious challenges. Among them:
Despite the above, Vietnam although it does not get the publicity of India or China remains a highly attractive location for software development and for many IT and IT equipment companies because of the fast pace of growth in the market. If your company is not currently in Vietnam, you would certainly be wise to further investigate this market.
- Presentation on Education and Training in Vietnam
- Software Industry in Vietnam
- Update on Telecommunication Industry in Vietnam
- Insight on IT in China, Thailand, Vietnam and India