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IT Industry background

Vietnam’s information technology (IT) industry has taken first step to integrate into the global development trend, following many years of low activity. During recent years, as the country’s economic reform which resulted in a relatively strong demand for IT products and services, Vietnam has trained hundred of thousands of IT engineers – with high ability in maths and logistics, Vietnamese engineers are good in programming, building and applying software. Since then, the IT industry has grown, especially during the period from 1996 to 1998, which saw a growth rate of 35%. However, the overall markets value for IT industry as hardware, software and services are still small in comparison with other countries, especially from Asian countries.

Vietnam software industry is still very small; software products and services are not developing as demanded. There are many reasons but the main one may be that Vietnam does not have the right strategy to bring into play its potential in the past years. Ho Chi Minh City now has 207 operating informatics companies, including 168 domestic, 32 foreign and 7 joint ventures. Twenty-nine of the domestic companies specialise in software, while the rest deal in trading and production of equipment, software and services. Vietnam does not yet have IT equipment production enterprises, but there is some producing software. Some 640 people are engaged in software production, which is believed to bring in large profits.

The government Project for Developing Vietnam Software Industry began in 1996, is aimed at building a strong industry which would take full advantages of Vietnam software companies. In the 1997, Vietnam officially connected to the Internet that created an opportunity for Vietnam software companies to integrate and compete in the international market.

Some figures on Vietnam IT’ market

The value of the IT market’ forecasted for next five years (2005) between $700 – $1,000 million (with HCM spending $250 – 300 million). By 2010, estimated national disbursement on IT will amount to $2,000 2,500 million, with Ho Chi Minh Citys share at $700 800 million. 50% of the market for hardware, 30% for services and 20 % remaining is for software.

With approximately 80% of the population live in the countryside, the Vietnam’ IT market is concentrates on major cities such as Hanoi and Ho Chi Minh City. Major customers including the government, foreign-invested corporations, international organisations and state-owned enterprises…. Perceived high costs have left entities in the domestic private sector operating without quality and reliable IT products and services. As a result, many choose to use cheap IT products such as PC clones and even pirated software.

Governments Awareness

The Vietnamese Government considers IT a very important industry and has prioritised its expansion. The government’s official standpoint is expressed in Resolution No 49/CP, a document issued on August 1993. To put the ideas of this Resolution into practice, a National Programme on IT was created with the following main objectives:

• To develop a wider application of IT in the activities of governmental administrative organisations on central to local levels.
• To invest in IT applications in various critical areas of the economy and services.
• To build some important databases at national level.
• To improve the capabilities for IT education in big universities.
• To build up hardware industries with the initial stage focusing on the assembly of PCs.
• To actively support the forming and developing of a software industry in Vietnam

By the end of 1998, the National Programme on IT has reached its halfway stage. Although Resolution No. 49/CP was announced in August 1993, the associated National Programme only began its project in late 1995. Like the Resolution, the programme is working towards the year 2000, which is why 1998 is considered the mid-point of the whole undertaking. In spite of its achievements, there are still many difficult obstacles. The biggest problem is that not everyone realises that if Vietnam does not have IT industry, which is as advanced as other countries in the region, then it will not be able to consider integration. Although other industries are extremely important for the country’s development, they do not hold the same key significance as the integration of IT.

A full sector report (free of charge) is available upon request, please contact to:
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Links
National Institute of Standards and Technology (US)
Science Links
Infoseek
HCMC Computer Association
Saigon Software Park