Vietnamese Developers Are at the Top Amongst Southeast Asian Competitors

Compared to its neighbors in South East Asia, Vietnam’s software developers have emerged as global leaders in the fast-paced world of IT.  At the forefront of the 4.0 revolution (aka the fourth Industrial Revolution), Vietnam is considered to have the greatest high-tech human resource potential in the region.

The software development hub of the future

Beginning about 15 years ago, software development companies in Vietnam took inspiration from countries like China and India and began offering outsourcing services to global customers looking to leverage the advantages of high-quality, lower-cost services.

Fast forward 15 years to 2017 and 81% of Vietnamese IT companies reported annual payroll increases of 6%-20%. This number reflects the growing demand for software development outsourcing services in Vietnam. This kind of growth can only be sustained by delivering high quality, cost-effective solutions. This has had a significant impact on the IT landscape in Vietnam.  

In fact, the number of tech jobs in Vietnam has doubled over the last three years, to a current total of about 250,000. Analysis of market and industry trends indicates that another 150,000 will be added by the end of this year. Salaries have increased significantly and many companies offer generous bonuses to attract and retain employees. This trend shows no sign of slowing and speaks to a promising future for Vietnamese IT employees and employers alike.

The Vietnamese government invests in IT education

The Vietnamese government has recognized the importance of a tech-savvy workforce. With government incentives and investments in early education, Vietnamese children are exposed to computers and programming from a young age. The results were clear to Google engineer Neil Frasier during his 2013 visit to Vietnam.

According to a blog entry published by Frasier upon his return, he found that Vietnamese 5th graders were programming in Logo at a level comparable to that of 11th graders in the US. Frasier also sat in on a Vietnamese high school class project, and noted in his blog, “After returning to the US, I asked a senior engineer how he’d rank this [project] in a Google interview. Without knowing the source of the question, he judged that this would be in the top third. The class had 45 minutes to design a solution and implement it in Pascal. Most of them finished, a few just needed another five minutes. There is no question that half of the students in that grade 11 class could pass the Google interview process.”

Coming from a Google engineer, this is a revelation. It means that in a relatively short time and with relatively limited resources, the education system in Vietnam is producing future programmers and developers that can and do compete on the world stage.

Global technology giants are investing in Vietnam

In PwC’s October 2017 publication “Spotlight on Vietnam”, the authors assert that between Vietnam’s young and well-educated workforce, its booming economy, and the government’s close relationship with the private sector in developing IT education and business development, Vietnam is destined to become to become a world leader across the spectrum of technology sectors. In fact, as Kim Seung Rok, CEO of Woori Bank Vietnam is quoted as saying, “Viet Nam is not a Korea 20 years ago, or a China of 10 years ago. In some sectors, like IT, Vietnam is not far behind the global standard.”

Global technology giants like Samsung, Microsoft, LG and Intel are investing heavily in Vietnam, and not just because Vietnamese firms are providing high quality and cost-effective solutions. These and other companies know that the culture of Vietnam follows a long-standing tradition of constant learning and hard work, where the norm is to continually improve knowledge and skill. Both students and employees in Vietnam typically learn and work more hours per week than their Western counterparts, making an investment in Vietnam an investment in the future.

Competing with China and India

As reported by the International Labor Organization in 2017, the average labor cost in Vietnam is around 90% less than the US, 50% less than China and 40% less than India. While low labor costs can certainly attract new customers, it takes a quality product to keep them, and its burgeoning IT industry is proof that Vietnam is shaking up the international IT landscape.

According to the Japan External Trade Organization (JETRO), more than ten Vietnamese IT companies have made major inroads into the Japanese market. With more than a 20% market share, Vietnam becomes the 2nd biggest software and IT partner in Japan, second only to India.

Furthermore, Vietnam’s IT revenue reached $68 billion in 2016, posting an 11.49% increase over 2015. The software sector alone earned $1.6 billion, with 58% coming from the international market. The Vietnamese government has therefore been investing heavily in IT industry development, with the stated goal of transforming the country’s economy into a global technology powerhouse.

Kevin Nguyen, the founder of Adamo Software in Hanoi, Vietnam, sums it up this way: “Given its relative newcomer status on the world stage of information technology, Vietnam’s rapid ascension as a global player is just a hint of things to come. Already a competitive software development and IT outsourcing destination, Vietnam is poised to become a global technology leader… stay tuned!”