Vietnam’s plans on digital economy, the Fourth Industrial Revolution, smart cities and startups are clearly helping the country’s IT industry continue to record strong revenue growth
Vietnam’s IT industry is expected to become the region’s leading innovation hub.
The growing capital inflow from private investors, especially foreign ones, in Vietnam’s IT has been considered a golden opportunity for the industry to take a leap, experts said.
Many provinces and cities have so far this year lured large FDI projects in the IT industry. The southern province of Binh Duong, adjacent to Ho Chi Minh City, for example, licensed the Internet Service Supply Project of Japan’s NTT Group with registered capital of US$171 million, while Dong Nai province licensed a US$60.18 million investment capital hike of Japan’s Fujitsu Vietnam Computer Products Company.
Pham Thiet Hoa, director of the Ho Chi Minh City Investment and Trade Promotion Center, said that Vietnam’s IT industry is attractive to the investors as the country leads Southeast Asia in internet economy growth with a rate of 40%, according to the e-Conomy Southeast Asia report for 2019 released by Google, Temasek and new partner Bain & Company. Particularly, Hanoi and Ho Chi Minh City are among the 10 most dynamic cities in the world this year according to the City Momentum Index.
Under the strongly growing digital economy, Hoa said, major opportunities are opening for investors, especially those who want to provide products and services based on new technologies, as the Government in general and the Ho Chi Minh City administration in particular are deploying projects to build smart cities around the country, promoting innovative startup programs, and implementing projects to transform Ho Chi Minh City into a regional and international financial hub.
Besides, Vietnam had 3,000 start-ups in 2019 to rank third place in Southeast Asia, and the number continues to increase each year.
In addition, according to Nguyen Cong Ai, partner, deal advisory strategy at KPMG Vietnam, many foreign investors are paying close attention to the Vietnamese market because Vietnamese people are highly innovative.
Vietnam’s innovation level is consistently increasingly, and this will continue for the next 5 to 10 years, Ai forecast, suggesting that to further boost innovation, the education system needs to be reformed further to stimulate creativity among students and provide better foreign language training.
According to Hoa, those favorable conditions thus are providing a golden opportunity for Vietnam’s IT industry to break through and become the region’s leading innovation hub.
Most promising industry
The Vietnamese plans on digital economy, the Fourth Industrial Revolution, smart cities and startups are clearly helping the country’s IT industry continue to record strong revenue growth, which helps lure foreign capital.
Jeff Paine, managing director at the Asia Internet Coalition, said that Vietnam has grown to become one of the most attractive investment markets in the region across several sectors, but the IT industry and its digital economy stand as the most promising.
Vietnam’s digital economy is continuing to thrive, with its gross merchandise value being 4% of the country’s GDP, higher than any other country in Southeast Asia, Jeff noted, adding the IT sector will continue to be a driving force for growth and transformation in the Vietnamese economy, especially in delivering Industry 4.0 ambitions, as this will secure the country’s strong competitive regional position in the coming decades.
“Today we are beginning to see an expansion from investments of leading global technology companies in Vietnam focused on manufacturing hardware to developing software and more application-based services. These foreign funds are critical to Vietnam, especially for the transfer of knowledge and bringing in global best practices that are crucial for the development of a local yet world-class ICT industry,” Jeff said.
A Vietnam Report survey on the 500 most profitable companies in Vietnam last year also showed that a majority of business insiders expect technology to remain the leader in attracting investment. Hanotimes
From growing e-commerce, online gaming, travel booking, and offline-to-online platforms such as ride-hailing and food delivery, Vietnam’s digital economy continues to thrive.
According to Solidiance Consultancy, transactions on Vietnam’s fintech market could nearly double to US$7.8 billion in 2020 from $4.4 billion last year.
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