In today's interconnected world, the IT industries in Vietnam have experienced an unprecedented level of diversification, permeating various aspects of our daily lives. From financial services such as e-commerce and fintech to software outsourcing and cutting-edge education technology, Vietnam's IT sector offers a wide range of opportunities for investors and businesses alike. With the recent adoption of Industry 4.0 principles across every industry, Vietnam has positioned itself as an ideal destination for foreign investments in the IT industries, making it a golden time to seize the prospects this emerging market has to offer.
The embrace of Industry 4.0 technologies, including artificial intelligence, machine learning, and automation, has catalyzed a revolution within Vietnam's IT industries. This technological advancement has not only propelled innovation but also enhanced productivity across various sectors. As a result, foreign investments in Vietnam's IT industries are expected to witness continuous and significant growth, driven by the country's commitment to implementing state-of-the-art solutions in all domains.
Vietnam's proactive approach to cultivating the IT sector is also evident through favorable government policies and the establishment of tech-centric zones and clusters. This nurturing environment, coupled with a young and tech-savvy workforce, provides a solid foundation for IT companies and entrepreneurs seeking to capitalize on Vietnam's ever-expanding IT industries.
1. Software outsourcing
1.1. What is a software outsourcing service?
In a nutshell, software outsourcing services are the practice of hiring the talents and knowledge of a third party to perform complicated software development jobs.
Because of the competitive market and the necessity for digital transformation, the demand for software outsourcing is expanding. According to Statista's research on the IT outsourcing business, the worldwide outsourcing market is worth USD 92.5 billion.
A secret survey has shown that 73% of companies and organizations will have the plan to utilize software outsourcing in Vietnam, making software outsourcing become one of the IT industries with great potential for the next few years.
Compared to India and China, Vietnam has now become a cheaper alternative as an outsourcing destination globally. This helped the software industry reach revenues of US$8.8 billion in 2018, according to the Vietnam Software and IT Services Association.
1.2. Types of outsourcing services
It indicates that business owners will engage a third party from another country. For example, the corporation is based in China and collaborates with a software outsourcing firm in Vietnam. In this situation, Vietnam will serve as a nearshore outsourcing destination for China.
There will be no time zone, culture, or communication gaps due to the convergence of geography and time. Aside from that, clients may be able to come and meet the outsourcing development team in person. This convenience can aid in determining any critical concerns connected to the software outsourcing development process.
It means that business owners will engage a local third-party company. For example, the corporation is based in the United States and employs a local software outsourcing firm. As a result, the United States will be an onshore outsourcing destination for US firms.
Because both sides speak the same language, this sort of outsourcing has no language hurdles. It has the potential to make outsourcing more efficient. Clients may, however, be required to pay development expenses that are greater than those associated with nearshoring and offshore.
Offshoring outsourcing services implies that business owners would employ a reputable software outsourcing firm from afar. A US-based corporation, for example, may work with or engage a software outsourcing provider from another nation, such as China, India, or Vietnam. As a result, China, India, and Vietnam will be the US company's offshore software development locations.
India and China are well-known outsourcing centers in this context. Vietnam, on the other hand, maybe an excellent choice for the organization. Because of the low labor expenses, cost-effectiveness will be the first mention for offshore outsourcing. Another advantage of offshore is the availability of different resources.
1.3. Vietnam's IT Industries: English Skills Challenge
The government is developing high-tech zones and is also offering several incentives to further the IT industries. For example, Da Nang has developed as a software outsourcing center, particularly for Japanese businesses and in Hanoi with Hoa Lac hi-tech parks.
But, there’re so many challenges exist, and Vietnam needs to develop large-scale IT outsourcing to compete with other global players. One of the most challenges is to improve English skills to communicate more efficiently with the rest of the world.
2. Education technology become more popular
2.1. Vietnam's Edtech Sector Booms
Vietnam’s education technology (a.k.a Edtech) received investments worth 55 million USD in 2018 and increased to a whopping 150 million USD. This investment is largely driven by the Edtech teams with the ability to bridge the gap between traditional education environments and learning needs inspired by the private sector.
The shiniest star is Everest Education, it was founded by Tony Ngo and Don Le back in 2011 to help students prepare for international education opportunities. In 2019 they raised USD 4 million through Hendale Capital (Hong Kong), Viet Capital Ventures (Vietnam), and Nullabor (Singapore) in a Series B financing round.
This injection of capital will help the company to continue its growth, developing its online platform, and adding to its seven established learning centers. Everest Education currently offers programs for primary, middle, and high school students through a combination of online and offline tuition and resources. This allows students to get the best of both online and offline learning as they strive to secure places in elite boarding schools and top global universities, and all the knowledge is transformed through English.
2.2. Educational Technology Challenges
According to Project Tomorrow, despite increased interest in the usage of new technologies like AI, and AR, less than 10% of schools report having these tools in their classrooms. Additional issues include excessive screen time, educational effectiveness with technology, and concerns about technological equity.
The question of content has emerged prominently as a result of the COVID-19 crisis. Educators must be allowed to create and comment on online educational content, particularly to encourage students to evaluate a topic from several perspectives. The immediate steps performed during this crisis did not provide for enough time for this.
Furthermore, while some students excel in online education environments, others lag due to a variety of circumstances, including a lack of support services. A student who has previously struggled in face-to-face situations, for example, may suffer much more in the current circumstance. These pupils may have relied on services that are no longer available to them.
2.3. The Benefits of Technology in Education
Teachers desire to increase student performance, and technology may assist them in doing so. To address the issues, administrators should assist instructors in developing the skills required to improve student learning using technology. Furthermore, classroom technology should make instructors' tasks simpler without adding extra time to their day.
Technology gives students with fast access to knowledge, rapid learning, and enjoyable chances to put what they've learned into practice. It allows students to study new disciplines and expand their comprehension of complex ideas, which is very useful in STEM. Students can learn 21st-century technical skills for future careers by using technology both inside and outside the classroom.
Leaders and administrators should assess where their faculty is in terms of their grasp of online environments. They may now apply solutions for the future based on the lessons learnt throughout this turbulent period. Administrators, for example, should allow instructors a week or two to carefully consider how to teach previously unavailable online courses. Flexibility is essential during these tough times, in addition to an examination of alternatives.
3. ELSA Speak
Following is ELSA Speak (English Language Speech Assistant), which raised USD 7 million in Series A funding in early 2019. This event can show that investing in an AI pronunciation app like ELSA is still very promising.
They claim themself as the “World’s best English pronunciation app” and it seems like that’s true. The company is proving popular, having achieved almost 4.5 million downloads to date and winning 4.5-star ratings from users both on the IOS apple store and the google play store. The app uses “short fun dialogues” and “instant feedback” to deliver pronunciation assistance to people. And now over 100 countries around the world use them.
And the last thing we should know that’s Vietnam’s kindergarten through grade 12 population is an attractive market with locals spending up to 40 percent of their income on educational purposes. Education technology firms like Violet.vn, Hocmai.vn, and Topica have found success in this area. It’s no surprise that foreign investors from Japan, Singapore, South Korea. And Australia is showing interest in investing in Education technology here.
Like our previous article, the IT industries in Vietnam still have lots of potentials to invest in, and all the IT sectors like eCommerce, education technology, and even software outsourcing. With a lot of potential like abundant human resources and laws to help foreign investors investing in here. The IT industries in Vietnam will change drastically soon.
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