Great opportunities for investment in Vietnam’s ICT

May 24, 2023 | 11:21
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After more than 30 years, Vietnam has been able to compete with other countries in the region in terms of foreign investment attraction in ICT. The industry is increasingly deeply and widely integrating into the global value chain, creating many better conditions for Vietnam to expand the international market. In particular, more and more large enterprises in digital technology consider Vietnam a top destination.
Great opportunities for investment in Vietnam’s ICT
Nguyen Thien Nghia - Deputy director, Authority of IT and Communications Industry, Ministry of Information and Communications

Foreign-invested enterprises in phones, computers, and components are dominating major export groups. In the last five years, the electronics industry has contributed greatly to the country’s total export turnover of electronics, making a great contribution to the balance of foreign exchange and trade balance of the country. In 2021, the export of electronic hardware for the first time exceeded the level of $100 billion when it achieved export revenue of $121.8 billion, a growth of 27.4 per cent, the highest level in the recent five years.

Foreign investment has also contributed to enabling Vietnam to become one of the world’s major electronics industry development centres. Vietnam’s electronics industry has lured in large groups such as Samsung, Foxconn, LG, Panasonic, Intel, Electronics, Nokia, and others.

Vietnam is ranked second in the world in exporting phones, and the sixth in exporting computer components and electronic components. And at the same time, the country entered the list of top 10 export powers of microchips, printers, software, and video games.

Funding from abroad has also had a big influence on Vietnamese-made products and businesses. The localisation rate of ICT products in Vietnam has improved. For the hardware and electronics industries, the localisation value rate among foreign-led companies is about 31.9 per cent.

In software, digital content, and IT services, the localisation rate is about 80 per cent because Vietnamese enterprises can master in technology, products and production processes from the stage of determining requirements to research, design, programming, warranty, maintenance, consulting, and technical support. In addition, the internal resources of research, creation, production, and technological mastery of Vietnamese-made products are increasingly enhanced.

If Vietnam wants to develop, it must be on par with the world with open technology and open standards. Accordingly, Vietnam must be ready to cooperate with foreign businesses in developing digital technology solutions products in the process of national digital transformation.

Through the role of a user, Vietnam will work with foreign businesses to research and develop digital tech products to solve Vietnamese problems and then cooperate to explore other international markets;

The country considers this transformation as a breakthrough new development method that helps to accelerate and shorten the country’s process of industrialisation and modernisation, and develop the digital tech industry into the platform industry. Vietnam is strongly promoting digital transformation in all industries nationwide and comprehensively, seizing the opportunities from Industry 4.0.

In order to realise that, we need to promote external forces in parallel with internal forces to form the power to accelerate the process of digital transformation and socioeconomic development.

Over past years, foreign enterprises in the ICT industry have contributed to improving the qualifications and skills of local workers, and are an important channel to bring advanced technologies in the world into Vietnam, helping it deeper integrate both in terms of economy and society with other countries in the region and elsewhere.

Foreign enterprises in Vietnam are considered an important component of the ICT industry, and part of digital tech enterprises. They are encouraged to develop and cooperate in a healthy competitive environment. Therefore, foreign businesses have great opportunities to cooperate with Vietnamese businesses, apply new technologies in digital transformation in Vietnam, and develop together sustainably.

In order to effectively engage foreign investment, besides financial incentives such as tax incentives, land incentives, and others, Vietnam needs to improve its policies on attraction and disbursement with a strong focus on green growth and supply chain connection of Vietnamese enterprises with foreign ones, especially global tech corporations.

Firstly, Vietnam needs to complete institutions and laws, including internal legislation of the global minimum tax, and handle the relationship between internal and external forces, modernisation of socioeconomic infrastructure, and speeding up national administrative reform.

Secondly, digital tech and transformation belong to the high-tech field and have certain characteristics. Vietnam needs specific, focused, and key preferential policies. In semiconductor chips, developed countries all have development programmes and funds to draw funding in such areas. For example, the Japanese government has supported half of the cost of about $3.5 billion for the construction of a semiconductor plant, in a partnership between TSMC and Sony in Kumamoto Prefecture in southern Japan.

The third aspect is increasing investment in developing a high-quality workforce. This is considered a decisive factor in attracting funding in digital technology. The government needs to fund education programmes as well as research and development, while supporting the establishment of human resource training centres on the basis of combining the resources of the state and domestic and foreign enterprises to develop high-quality human resources with practical experience suitable to business needs.

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By Thien Nghia

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