Land of the rising yen

Thirty Japanese enterprises, including famous firms such as Toshiba and Itochu, last week attended the Vietnam-Japan festival information technology in Ho Chi Minh City for Vietnamese and Japanese software and information technology firms to review market and develop business opportunities.

“At present, China occupies 84 per cent Japan’s software outsourcing contracts followed by 15 per cent India and 0.5 per cent Vietnam. However, 16 per cent of firms in the survey assumed will cooperate with Vietnamese enterprises in the coming time,” said Hiromi Sugiyama, vice president of Information Technology Association of Japan.

He said Japanese firms wanted to be involved in Vietnam due to low operating costs, high potential profits and young, abundant human resources.

Vietnamese firms have created a good brand in Japan, however, most enterprises are mostly small and medium scaled, said Le Quang Luong, director of Software Joint Stock Company Luvina.

“Most obstacles are quality control, but not the labour costs,” said Hiromi. 

Pham Tan Cong, secretary general of Vietnam Software Association (Vinasa), said Japanese enterprises had to cut 7.6 per cent of software outsourcing contracts during the economic recession that impacted on Vietnamese firms, the third largest partner in the Japan’s outsourcing fields behind India and China.

FPT Group, for example, suffered a negative impact from the economic recession in Japan, where accounted 56 per cent of its export revenue.

Nguyen Thanh Tuyen, deputy director of Information Technology Department under the Ministry of Information and Communications, forecasted the average growth rate of information technology would be 17.5 per cent, per year from now to 2015.

He said that the country’s information technology industry aimed to attract $5 billion in foreign direct investment (FDI) in next few years while the Vietnamese government also planned to develop two high-tech centres with $2 billion in revenues per year.

“Another important target is to train about 50,000 quality IT engineers with professional working skills and foreign language proficiency,” said Tuyen.