These days, software development outsourcing is what drives the economic force of numerous emerging countries. Recognized as software development industry leaders are India and China due to their human resources and experience. Alongside these two powerhouses in the industry is Vietnam. In fact, Vietnam is fast emerging as a software outsourcing destination and an IT hub worldwide.
Why outsource to Vietnam? Outsourcing software development in Vietnam is gaining more and more popularity. As stated by Saigon Technology, outsourcing to the country provides high-quality, cost-effective solutions. Compared to software development in America, the cost of hiring a service provider in Vietnam could save as much as 90 percent of the cost.
Compared to the United States, the labor cost in Vietnam is around 90 percent less. Furthermore, it’s 50 percent less than China and 30 percent less than India. For companies seeking affordable software solutions, Vietnam is indeed the go-to outsourcing destination across the globe.
The importance of education and training is highly recognized and promoted by the government. Nowadays, the country has a 96 literacy rate and 80 percent of graduates have degrees in sciences, including computer science. This makes it an exceptional place for outsourcing software development needs because of its high technical literacy and high education population.
The country boasts of a healthy economy that’s growing in a fast and stable manner. The GDP growth in 2021 was estimated to be 2.58 percent. It’s also one of the rare economies that have two consecutive growth years during the global pandemic. While other countries struggled to contain the impact of Covid-19, Vietnam was among the best in terms of controlling the virus and preserving economic stability.
Instability often plagues common software outsourcing destinations in the Asia-Pacific area. For instance, consider the Thailand coup in 2006, the conflicts between India and Pakistan, and the military struggles in Sri Lanka against the Liberation Tigers of Tamil Eelam. So many US travel advisories were issued against traveling in these areas. Vietnam, fortunately, does not share these woes. It is in fact a very stable country, creating a hospitable business environment for software outsourcing.
Since 95 percent of the population in Vietnam is ethnically Vietnamese and over 80 percent do not identify with any specific religion, the country is greatly free of religious or ethnic conflict. It has one of the most secure investment environments, given the conflicts in the surrounding region. It was also ranked as the safest among the fourteen countries in the Asia-Pacific Region.
The present government has held power since the 1975 reunification, which means that there have been over 30 years of political stability. Its last conflict with a neighboring country was nearly thirty years ago, back in 1978. Based on the Global Peace Index 2020, Vietnam ranked 12th as the socio-politically stable and safest country in Asia.
The policies in Vietnam nowadays create a welcoming and warm business environment for foreign investment. Along with the Free Trade Agreements signed in 2019 with the EU and its successful Covid-19 containment, the country has been attracting massive investment from international tech giants as well as manufacturing groups. These include Canon, Apple, Nokia, Microsoft, LG, Samsung, and Intel. Not to mention that there are other tech corporations from Japan, such as Nintendo, Sharp, and Komatsu as well as Hong Kong like Lenovo that are planning to make their way to the country for production.
The government has provided a lot of incentives for foreign investment. The investments made by foreign multinationals and governments have helped to build a more positive scenario. The IT industry, which the government sees as one of the keys to economic growth, is the greatest example of progress. Software development and services businesses are exempt from corporate income tax for four years from when they generate taxable income, both local and foreign investments.
Unlike most Asian languages, Vietnamese makes use of the Latin alphabet, just like English, making it relatively easy to learn English. Also, the country’s second most popular language is English and the majority of college graduates have high English proficiency. Vietnam’s English level was ranked 13th in Asia and ranked 65th across the globe in the English Proficiency Index 2020. Ninety percent of IT workers could communicate in English at an intermediate and higher level when working on software outsourcing projects.
The tech industry of Vietnam is still in its early stages with plenty of room for growth. It has the potential to become a leading player in Asia’s tech sector, attracting more investments from foreign brands. With continued support and development, the tech industry of Vietnam soon could rival those of other countries.
The tech industry in the country is a key contributor to its GDP nowadays, helping it to become one of the fastest-growing economies in Southeast Asia. The tech sector is likely to grow continuously in the years to come as the country will continue transitioning into an industrialized country. It has more advantages over other Southeast Asian countries. However, it still requires more support and investment to reach its maximum potential.
The booming tech industry of Vietnam is attracting the attention of business organizations and investors all throughout the world. With low cost and a talented workforce, the country is fast becoming a leading software hub in Asia. Moreover, the stable political environment and growing economy contribute to the success of its IT industry. For businesses looking to expand into Southeast Asia, Vietnam has a lot to offer and many brands are already taking advantage of the country’s labor force to build their businesses.
