Vietnam is now consistently ranking at the top of the Asian market for business expansion, coming in behind Singapore as the 2nd most favorable market to invest in based on economics, regulation, and talent. The country’s young and active workforce only increases the appeal of this emerging market. In conjunction with an energetic workforce, Vietnam also ranked 7th out of 75 global markets for Cost Efficiency in the 2016 Contingent Workforce Index (CWI), released earlier this year by ManpowerGroup Solutions. This emerging market was also ranked 2nd for Cost Efficiency in the same report for the APAC region behind the Philippines.
Vietnam’s 2020 IT Master Plan created several business parks that house the offices and factories of a growing number of international Software companies, IT companies, hardware manufacturers and infrastructure plants powering the central Vietnamese city of Da Nang, at the heart of the tech boom. In the early 2000s there were barely any IT companies in Vietnam, however, in 2015 there were close to 14,000 that included a spread of hardware, software and digital content producing companies. The Vietnamese government has taken notice and recognizes how important the tech sector will be to the country’s economic growth
With an approximate population of 95.3 million in 2016, a median age of 30.1 years old and a relatively low age dependency ratio of 42.5%, present day Vietnam is home to an expanding population of IT programmers, developers, engineers and students who are driving innovation and economic growth through technology. This tech-savvy young generation is set to become the first generation of Vietnam’s middle class.
In Vietnam, IT is an umbrella term for any products and services related to computing and Internet technology. This includes software, hardware, enterprise, networking, and telecommunications. Regional Vietnamese universities produce hundreds of well-trained IT and software engineering graduates each year. Many of these graduates are recruited immediately by some of the most innovative global employers and industry leaders such as Cisco, Fujitsu, HP, IBM, Intel, LG, Samsung, Sony, and Toshiba.
From the perspective of a tech hub, Vietnam’s potential is great. Though the country may not match Silicon Valley’s elements of innovation and world-altering technological advancement, the country is forward thinking and eager to establish itself on a global stage to compete with similar tech hubs. IT workers are an in-demand resource. So much so that schools such as the University of Science and Technology in Da Nang may receive about 2000 applicants for its IT Department program but can only accept 250 students annually. This is leading to the development of new incubator programs for future years to help students develop the right skills.
Though newly graduated engineers are in high demand by employers, some choose to start their own companies because it’s relatively easy to do so in Vietnam. New businesses in Vietnam are exempt from taxes for the first eight years. Vietnam is also a member of the World Trade Organization (WTO), protecting the intellectual property (IP) rights of its companies. Vietnam is quickly becoming an investment and tech hub for both local and international enterprises. The county’s modified educational structure that is producing capable and talented coders has encouraged the expansion of larger IT-centric organizations over the past few years into this emerging but maturing market.
Some organizations already established in the region have invested in recruiting campaigns aimed at local universities as well as developer training boot camps for new hires. Common open positions for which these organizations are recruiting talent include Android/iOS development, UI/UX design, .NET, Java, front-end development, product management, and more, which are expected to be filled mainly by local professionals. Projected figures anticipate that the education system will graduate 40,000 new graduates a year into the IT workforce and maturing enterprise ecosystem.
Tech giants are attracted to Vietnam by a young, well-educated labor force and generous tax incentives. It seems clear that with the determination of the Vietnamese government to diversify the nation’s economy, as well as the multi-billion-dollar confidence from major companies with established programs in Vietnam that Vietnam’s high-tech hub plans are becoming a reality.