The Vietnam population is approximately 100 million; our nation is a crucial regional market, either leading technology suppliers or home-grown businesses. The latter is obtaining a lot of motivation to improve since the nation revolutionizes foreign standards within zones like education, engineering, and industrial infrastructure, especially the Vietnamese IT industry.
1. Overview of the Vietnamese IT Industry
1.1. Quick development
The Vietnamese IT industry is even dynamic but has boosted faster development. In reality, our country was linked to the internet around 1997. Until 2001, subscribers were evaluated at about 170,000. In the following years, after the cut in costs, people estimated more than one million.
Vietnam's ICT market reached a value of USD 7.7 billion in 2021, as per recent industry research findings. Forecasts project an annual growth rate of approximately 8% from 2022 to 2026, driven by increased adoption of ICT solutions in both public and commercial domains. The surge in demand reflects a rising reliance on technology in Vietnam's sectors. Recognizing the importance of ICT as a catalyst for economic growth, Vietnam's government promotes the adoption of modern ICT solutions. Government agencies at all levels are encouraged to leverage these technologies to enhance operational efficiencies and deliver improved governance services. This strategic approach aims to harness the potential of ICT for socio-economic development in Vietnam.
Vietnam's government has authorized the National Digital Transformation Program, spanning from 2021 to 2025, with a vision extending to 2030. This program aims to support the growth of the ICT sector by facilitating its expansion and development. In various sectors including aviation, banking, energy, healthcare, broadcasting, telecommunications, and urban infrastructure management, the private sector is adopting advanced ICT solutions. These implementations aim to enhance operational efficiencies and lay the foundation for sustainable growth in the long run. This growing trend reflects a recognition of the benefits that ICT brings to different industries.
1.2. Untapped Potential
The particular market’s immaturity is even mysterious. Regular testing is now occurring via the industry, but it is seen as low down the value chain. When somebody needs some stuff constructed from scratch. They could be cautious since the Vietnamese IT industry is specifically around 15 years or has had procrastination.
1.3. Workforce
Vietnam has lately emerged as one of the most appealing investment countries in Southeast Asia for global technology corporations looking to grow into a variety of fields.
The digital economy in Vietnam has enormous potential. The government offers several specific incentives to attract investment, such as a 10% tax break for 15 years.
Vietnam has almost 90 million inhabitants, making it the 13th most populated country in the world. One-quarter of the population is under the age of fifteen. Vietnam has had a golden population structure since 2009. This indicates that there is only one dependent person for every two or more working persons.
As per the Vietnam General Statistics Office, Vietnam's golden population structure is projected to continue until 2035. This demographic trend indicates that approximately 66% of the population will be of working age. Furthermore, the labor force is expected to grow by more than 1.5 million individuals annually.
The Vietnamese IT industry is presently overflowing, with 400,000 IT engineers and 50,000 IT graduates graduating each year.
A 2020 survey found that 43.8% of Vietnam's engineers worked for corporations that outsourced their technology development. Vietnamese software engineers possess expertise in diverse programming languages and stay abreast of emerging technologies like blockchain, AI, machine learning, and data science. Moreover, they exhibit proficiency in English, a valuable skill for Vietnamese IT professionals. This combination of technical knowledge and language proficiency strengthens their competitiveness in the global IT market. All of these advantages make Vietnam an appealing site for outsourcing.
1.4. Client base
The remote software manufacturers offer their versions to local authorities and other businesses, while the huge national plants drive the foreigners for software. Next, sales are hoped to jump higher like the finance and communications fields. The communist party’s the key software purchaser around Vietnam, accounting for more than 35% of IT revenue, based on EVBN. That demand’s put to increase because the government’s looking to enhance tax collection and execute e-government on a large scale.
1.5. Growth drivers
Software outsourcing is put to develop quicker in the following years since our nation has developed better like the great IT outsourcing market. The expansion of IT labor has been driven by the establishment of new colleges, including international institutions, and the economic growth spurred by global integration.
Besides, it’s challenging for other organizations to take on the bigger campaigns, as some sector players get around 1000 employees. Thus, even though some Vietnamese suppliers could offer end-to-end modes or centralized skills, they can be capable of offering application testing, maintenance, and assistance. The MIC has concluded the strategies to support the sector. This assistance can contain a variety of investment promotion routes and workshops for businesses combining from Vietnamese to international plants.
Finally, the Communist party is even creating some moves to handle the shortage of high-degree English skills rather than other nations like Singapore, which has hampered the development of the plant process and IT outsourcing trend.
2. Leading Sub-sectors
2.1. Telecommunications
Vietnam has five mobile operators: VNPT-Vinaphone, Mobifone, Viettel, Vietnamobile, and Gtel. Dong Duong Telecom (iTel), Mobicast (Reddi), and Asim Telecom (Local) are the three mobile virtual network providers (MVNO). Three network operators, VNPT-Vinaphone Viettel, and Mobifone, control around 95 percent of the market. According to the Ministry of Information and Communications, Vietnam had over 125 million mobile phone customers as of February 2021, or a 129 percent penetration rate.
Traditional telecommunications revenue, specifically voice, and text message revenue, which accounted for roughly 54 percent of total revenue, is expected to continue to decline due to the saturation of mobile phone subscribers, continued reduced service rates, and the popularity of over-the-top calling and texting services.
Therefore, three major operators, namely Viettel, Vinaphone, and Mobifone, have shifted their focus to providing digital infrastructure and services such as digital services, fiber optic infrastructure, digital payment, and cloud services. These carriers have also piloted 5G technology successfully in the cities of Hanoi, Da Nang, and Ho Chi Minh City and plan on commercializing 5G services in 2022. Telecommunications service firms are expected to invest up to USD 2.5 billion to deploy and commercialize 5G technology from 2020-2025.
2.2. Smart cities
When the Ministry of Construction performed a study on urban infrastructure planning for the construction of a smart city in Vietnam in 2007, the idea of smart cities was presented. So far, 48 of Vietnam's 63 centrally-managed cities and provinces have been permitted to create a smart city in their respective areas, as the country has witnessed a significant urbanization rate of more than 30 percent per year over the last 10 years. According to the Vietnam Urban Development Association, the country now has 819 cities and is expected to have about half of its inhabitants living in urban areas by 2040.
Economic growth in urban regions averaged 12 percent per year, which was 1.5 times greater than the national rate. City governments in Vietnam are deploying smart technological solutions to achieve the goals of developing and managing their urban infrastructures efficiently and sustainably, as well as providing digital government services to residents and businesses. To achieve these objectives, numerous major cities in Vietnam, including Hanoi, Ho Chi Minh City, and Da Nang, want to establish some Smart Cities initiatives.
The state budget, official development aid, foreign loans (including World Bank and Asian Development Bank), and the private sector are all potential sources of finance for the implementation of these initiatives. More financing will likely become available for the construction of smart cities in key cities around Vietnam as the government of Vietnam continues to encourage and enable public-private partnerships in urban infrastructure projects.
2.3. Cybersecurity
According to a recent Ken Research analysis, Vietnam's cybersecurity industry is expected to reach USD 215 million in total revenue by 2023 and to increase at a rate of around 15% per year between 2022 and 2023. According to the World Bank, Vietnam's digital economy would surpass USD 43 billion by 2025 as the country invests in initiatives such as e-government, the Internet of Things, smart cities, financial technology, artificial intelligence, and so on. However, with this unprecedented expansion and demand for digital services across the country, the public and private sectors are seeing a surge in sophisticated cyber threats and assaults that constitute a serious threat to private information.
To strengthen the public sector's cybersecurity capabilities, the Government of Vietnam issued Decree 14 in June 2019 stating that government agencies at both the national and local levels (municipal and provincial levels), as well as state-owned enterprises, must strengthen their cybersecurity capabilities by implementing appropriate cybersecurity solutions. Decree 14 specifically stipulated that the public sector spend at least 10% of their total annual information technology spending on cybersecurity solutions and activities from 2020 to 2025. The Vietnamese Government published Decree 53/2022/ND-CP on August 15, 2022, defining a number of provisions of the 2018 Cybersecurity Law and establishing the standards for such local data storage and local presence requirements. Decree 53 takes effect from 1 October 2022.
Final thoughts
Here is the huge picture of the Vietnamese IT industry at this time. Last but not least, we believe that you will have a deeper insight into it.
Source: Internet
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