Vietnam’s plans for a digital economy, smart cities, and start-ups have helped the country’s IT industry continue to record strong revenue growth.
The growing capital inflow in Vietnam’s IT industry from private investors, especially foreign ones, has been considered a “golden opportunity” for the industry to expand, an official press release has noted.
So far this year, several provinces and cities have attracted large FDI projects in the IT industry. For example, the southern province of Binh Duong licensed the Internet Service Supply Project of Japan’s NTT Group with a registered capital of US $171 million. Dong Nai province licensed a US $60.18 million investment capital hike of Japan’s Fujitsu Vietnam Computer Products Company.
Hanoi and Ho Chi Minh City are among the ten most dynamic cities in the world this year, according to the City Momentum Index.
The Director of the Ho Chi Minh City Investment and Trade Promotion Centre said that the IT industry is attractive to the investors because the country leads Southeast Asia in internet economy growth with a rate of 40%, according to the e-Conomy Southeast Asia report for 2019.
Under the strongly growing digital economy, major opportunities are opening for investors, especially those who want to provide products and services based on new technologies. The government and the Ho Chi Minh City administration are deploying projects to build smart cities around the country, promoting innovative start-up programs, and implementing projects to transform Ho Chi Minh City into a regional and international financial hub.
Furthermore, Vietnam had 3,000 start-ups in 2019, ranking third place among Southeast Asian countries. Last year, a Vietnam Report survey on the 500 most profitable companies in the country showed that a majority of business insiders expect technology to remain the leader in attracting investment.
As Vietnam’s digital economy continues to thrive, its gross merchandise value is 4% of the country’s GDP, higher than any other country in Southeast Asia. It is predicted that 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.
Innovation in Vietnam is also consistently increasing and is projected to continue in this manner for the next five to ten years. The 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.
The country is growing from investments of leading global technology companies 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. To ensure this trend continues, the education system needs to be reformed further to stimulate creativity among students and provide better foreign language training.