According to the Japanese Information Technology Service Association, Vietnam is emerging as one of the top options for Japanese information technology enterprises to outsource software manufacturing. More and more Vietnamese software enterprises have signed contracts with Japanese firms. Le Truong Tung, chairman of the Ho Chi Minh City Information Technology Association, said that the growth rate of software made by Vietnamese enterprises in Japan would reach 50 per cent per year. In the coming years, the Japanese market will certainly occupy the most important position in Vietnam’s exported software products.
Koichi Mukai, general director of the Vietnam-Japan software joint venture, said that after China and India, Japanese firms have their software products outsourced to Vietnam. Mukai went on to say that his company’s target was to co-operate with Japanese firms, it had sent Vietnamese programmers to Japan for training in Japanese, and working for Japanese information technology enterprises for two years. These programmers then would return home to lead projects on manufacturing software products for the Japanese market.
Japanese firms have been attracted by Vietnamese software enterprises’ outsourcing prices. Recently, labour costs in China have tended to increase, let alone an appreciation of Chinese yuan. Vietnam has a comparative advantage in terms of price. Another reason behind the shift is Vietnamese human resources. Vietnamese people are hardworking and industrious. However, the weakness of Vietnamese software manufacturers and human resources for information technology is a lack of experience, especially in system design. This has hampered Vietnam’s efforts at implementing large-scale projects. Vietnamese enterprises should take advantage of outsourcing contracts from foreign firms to gain more experience, which will, in turn, help them attract more large-sized contracts. Another barrier for Vietnamese software manufacturers is foreign language skills. Vang Thuy Kim Tuoc, vice chairwoman of the Vietnam Software Assocation (VINASA), said that Japanese firms had outsourced their software products to China because many Chinese had a good knowledge of the Japanese language. Therefore, Japan’s software manufacturing projects in Vietnam must organise training courses in Japanese for programmers or recruit those who know Japanese and have programming skills. Another method would be to recruit Vietnamese students in Japan.
An important activity, marking progress in Vietnam-Japan co-operation in software manufacturing, was a recent visit to Ho Chi Minh City by a 23-member delegation of 16 enterprises and universities. The visit was aimed at exploring the market and making contacts with Vietnamese software enterprises. On two days, September 12 and 13, the Japanese delegation visited the Softmart 2005 and pavilions of Vietnamese companies, the Quang Trung Software Park and the HPT Information Technology Joint stock Company. The members of the delegation made direct contact with 28 Vietnamese software enterprises and training establishments. At a reception extended to the delegation, Nguyen Thien Nhan, vice chairman of the Ho Chi Minh City People’s Committee, said that five years ago, Vietnam considered the US its main market but that the Japanese market had great potential. Ho Chi Minh City was determined to improve its telecommunication infrastructure facilities and would take measures to equip a workforce with the necessary skills to meet the demand from the Japanese market. Nhan stressed that by 2006, Ho Chi Minh City’s Internet coverage would have a high speed connection with charges equal to other countries in the region
The Japanese software market is valued at US$140 billion per year with software outsourced to foreign countries valued at US$3 billion per year. According to experts, Vietnam may be able to occupy ten per cent of this figure, equal to US300 million per year.
Hai Nguyen
Vietnamese
