Software Development in Vietnam

Vietnam is already a popular software outsourcing destination. The 2019 A.T. Kearney Global Services Location Index rated Vietnam as the 5th most attractive outsourcing location in the world.

More and more international companies are setting up satellite dedicated teams in Vietnam to take advantage of the availability of talent and cost advantage.

Vietnam offers many advantages for international companies in search of software developers. Those include:

  • Large and growing talent pool

  • Exceptional value for talent

  • Emerging and buzzing tech hub

  • Stable economy and functional ecosystem

About Vietnam

Vietnam is one of the fastest-growing economies in the world. The government’s economic reforms turned it into a stable, secure country and a great IT outsourcing destination. The Government is focused on turning Vietnam into a regional technology hub and it’s actively promoting and supporting the tech industry.

The country has a young, growing population of skilled, well-educated, young people.

Size and Quality of the Talent Pool

Large, young population, great and accessible educational system and Government focus on turning Vietnam into a buzzing tech hub mean the technology talent pool in Vietnam is large and growing.

At the moment, there are 150,000+ software developers and 80,000+ digital specialists in the workforce with 40,000+ new IT graduates joining the industry every year.

The education system in Vietnam is excellent, with a strong focus on mathematics and science. Technology is viewed as one of the best and most lucrative career options so a staggering 80% of graduates from Colleges and Universities are majors in science (mostly ICT programs and engineering).

According to World Economic Forum, Vietnam is one of the top 10 countries with the most engineering graduates.

There are 5pprox. 420 universities in Vietnam, 300+ offer ICT training programs and 50+ are focused exclusively on technology and engineering. Every major city has at least 2 universities focused entirely on technology.

Tech companies, universities, high schools, local NGOs work actively together to build a strong tech ecosystem ensuring a long-term talent pipeline. New, modern educational programs and facilities are built to ensure that Vietnam’s IT workforce remains competitive.

For example, Intel launched a $40 million program to improve tech education at Vietnam’s universities. Vietnam-German University (VGU) recently received a $180 million loan from the World Bank to build a new campus for 12,000 students.

Kids get exposed to coding early on and students start working during their studies so by the time software developers finish university they all have plenty of practical experience.

All this encourages many international companies to think of Vietnam as a long-term answer to their talent shortage issues in their home markets.

Vietnamese Technology Scene

Technology is quickly becoming one of the major contributors to Vietnam GDP. The Government is focused on turning Vietnam in a technology hub and is actively supporting the high-tech industry. Some of the measures include:

  • Tax incentives and grants for the software companies

  • Grants for human resources development

  • Setting up technology parks: Quang Trung Software Park, Da Nang Software Park to name a few. These are modern facilities with telecom and electrical infrastructure essential to serve a global client base.

Many international technology companies already have large presence in Vietnam

  • Intel invested $1bn in a chip plant in Saigon High Tech Park

  • Samsung manufactures 50%+ of its phones in Vietnam

  • Many corporations have chosen Vietnam as their IT outsourcing centre: IBM, Oracle, Juniper Networks, Microsoft, Alcatel-Lucent, Hitachi, Toshiba, Emerson, Panasonic, HP, et.

A word of caution though, many Vietnamese outsourcing houses tend to be very old-school companies that have been providing services almost exclusively to Japanese conglomerates, and in many cases are their directly owned subsidiaries. They are used to Asian clients, often won’t speak good English and work with an old tech stack as most of their work would have been around back office operations, testing and maintenance.

The new era of IT outsourcing in Vietnam is starting now. There are more and more modern software development companies, set up and run by Vietnamese software developers that have returned from abroad. Those will not differ from what you are used to in your home market.

Author: Lara from Railay

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