Minister of Post and Telematics Do Trung Ta told the first Viet Nam IT Outsourcing seminar, “The potential for Vietnam’s IT outsourcing is huge but so are the challenges.”

Outsourcing has grown strongly in recent years. Last year the software industry’s turnover topped US$350mil, an annual increase of 41%, with nearly a third coming from foreign markets.

The country has 750 enterprises and 35,000 programmers with a fifth of the number involved in software outsourcing. It also ranks among the top 20 countries for outsourcing.

The Government recently approved the Software Industry Development programme through 2010 which includes many incentives for the IT industry. Outsourcing is one of its key focus areas.

A talent pool with young, creative, hardworking, and well-educated workers; low operating and wage expenses; low attrition; a huge diaspora living abroad, especially in the US, and cultural compatibility with Japan and China are considered the strengths of the country’s outsourcing industry.

However, on the flip side are strong competition from China and India, enterprises’ small size, poor IT infrastructure, high software piracy rates, and poor management, marketing, and English skills.

Kenji Yoshioka, managing director of the Japan External Trade Organisation (JETRO) in HCM City, said, “Last year the Japanese IT community began to pay attention to Vietnam, thanks to the strong support from the Vietnamese Government, significant IT growth, and the setting up of a plant by US semi-conducted firm Intel. But Vietnam needs to expand its human resource base. The IT infrastructure and intellectual property protection also worry Japanese businesses.”

The Japanese Business Association in Vietnam has already set up an IT division and the Japanese Government will provide funds from its Official Development Assistance for Ha Noi University of Technology to train IT personnel.

Source: VNA