Vietnam becoming a destination for innovation

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International businesses learn about Vietnam's IT products and services at VNITO Conference 2019 held in Ho Chi Minh City last week. Photo: N.H.

Innovative destination

Pham Thiet Hoa, Director of Ho Chi Minh City Investment and Trade Promotion Center (ITPC) said that the information technology (IT) industry in Vietnam is facing an unprecedented turning point with fast development speed. Moreover, it contributes significantly to GDP growth and the state budget.

Lam Nguyen Hai Long, Honorary Chairman of VNITO Alliance, Director of Quang Trung Software Park (QTSC) also said that, along with the rapid change of technology, Vietnam has a high proportion of startups in Southeast Asia, with 3,000 innovative startups as of 2019 and continuing to increase every year. Vietnamese technology companies are following the trend of developing new technologies in the Industrial Revolution 4.0 in most fields: Big Data, machine learning (AI/ML), Internet of Things (IoT), blockchain and digital transformation.

The Government of Vietnam and Ho Chi Minh City are also implementing construction projects to build smart cities across the country, promote creative start-up programs and projects to build HCMC into a regional and international financial center. This is a great advantage for Vietnam, especially for businesses that want to deploy products based on new technology, and also a golden opportunity for Vietnam's IT industry to break through and become the ‘leading innovation center’ in Southeast Asia.

Long said, about 10-15 years ago, Vietnam was only an exporter and software outsourcer. However, within the past 5 years, Vietnam's software products have begun to appear. Vietnamese enterprises were mainly programming for writing code, while in recent years, enterprises have been "creative in hiring", which means that foreign enterprises hire Vietnamese enterprises to do creative work and make products that they haven't made or partially assembled with their products. On that basis, Long assessed that Vietnam had all the factors to become an innovation destination.

Speaking more about this, Long said, after 10-15 years of outsourcing to foreign partners, Vietnamese businesses have accumulated experience and learned a lot, from which they can move to create products and be recognized worldwide. In addition, Vietnam's socio-economic level is increasingly developing, creating resources for implementing innovative activities. In terms of manpower, in recent years, universities have made high quality investments. These factors create momentum for Vietnam's IT industry to develop.

"Currently, many international friends come to Vietnam not only to sell products but also to find partners to make products," Long said.

Global support

According to experts, countries around the world, especially those in Northeast Asia, are very interested in Vietnam and see it as a driving force for innovation in the region.

Specifically, Park Jihwan, CEO of ThinkforBL (South Korea), said that the market and human resources of Korean software engineers are shrinking, causing difficulties for Korean companies. ThinkforBL's solution to this problem is to cooperate with global partners. And the company has chosen Vietnam as the top location to help Korean software companies increase global competitiveness.

An Mei Chen, Senior Technical Director, Qualcomm Corporation (USA), also said that she is supporting some Vietnamese startups in technology issues and how to bring those technologies to the world. In addition, Qualcomm also works with many Vietnamese carriers from the 3G and 4G phases, up to 5G, to prepare a connection platform for the digital transformation period. An Mei Chen assessed that there are still many markets, opportunities for Vietnam to participate, produce new and improved services such as artificial intelligence, cloud, and IoT industry. Currently, Vietnam is on the right track when promoting an innovative and creative ecosystem.

Will Nguyen, KPMG Vietnam's Creative Director, said that KPMG has just conducted a survey of more than 300,000 CIOs (IT directors) in 108 countries on trends in technology investment and digital transformation of businesses. In particular, Vietnam is ranked 2nd in 108 countries globally for commitments to make investments in IT and ranks 3rd for commitments to bring automation into business and production. Although in the past 5 years, the investment level of enterprises in IT in Vietnam is still quite low (at 2%) compared to ASEAN (about 5%) but this rate in Vietnam is currently increasing every year. Manufacturers are gradually transitioning to automation. Notably, in the past 12 months, businesses in Vietnam are paying great attention to investing in robots for automation production.

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Lam Nguyen Hai Long assessed that, although the innovation activities in Vietnam are developing very well, this is just an activity itself, promoted by the market. Accordingly, if there is a more open policy, this activity will surely grow stronger. In addition, policy makers need to create an IT market within the country to leverage Vietnamese products to go abroad. According to Long, if shifting from software outsourcing to product development, the added value will be very large, with an increase of 20-40 times and Vietnam's brand name will also be spread quickly around the world.