|
-By Jayan CM
Vietnamese government is trying hard to boost its rising economy by pushing itself into higher-technology and higher-margin businesses. The country has drawn the sketches to acquire business from better-established countries.
When a leading British recruitment agency Harvey Nash PLC began looking for an offshore hub for its new software-development business six years ago, Vietnam never figured in its choice. Vietnam till then was in the business of making bicycles, shoes and clothes cheaper than anybody else. While established countries like India, the Philippines and South Africa were already up the race latching on more outsourcing business.
At the later stage Harvey Nashs when sat down to assess the options, Vietnam was the top contender. Factor like low wages, improving English-language skills and technical proficiency helped the balance in its favor. Harvey Nashs in partnership with FPT Software Corp.,(A unit of Vietnam technology company FPT Corp.,) gave Vietnam an edge over other, and that to at a time when attrition and wages were on the rise in India.
Resulting the above factor, Today Harvey Nash employs around 1,500 people across Vietnam through its own business and its associate FPT. Together they develops billing software for telecom companies such as Belgiums Belgacom SA, creates applications to manage human resources at Honda Motor Co.s British unit, and tests software systems for Discovery Channel and NBC Universals.
It seems many prospective investors had long sensed that Vietnam is capable of doing much more after it opened up its economy in the late 1980s. Prior to this Vietnam was mostly viewed as a state that depends on its agricultural exports and low-wage manufacturing. But that scenario has changed totally.
During Microsoft Corp. founder Bill Gates visits to Vietnam last year, he said "there was no reason why Vietnam could not follow India into software development and other forms of outsourcing".
Intel Corporation decision to build a $1 billion semiconductor factory near Ho Chi Minh City was a turning point that started the course of IT investment. This move by Intel sent positive signals to other major technology companies about the comfort level in investing in Vietnam.
Investors find the industrial land cheaper than China. Wages are about a third lower than in Chinas industrial coastal regions. And with a population of almost 90 million people, half of whom are under 30 years old, Vietnams talent pool is deep and increasing.
The fact that the Communist Party controls Vietnam is not a concern for most investors. This investor friendly attitude can be attributed to China, whom the Vietnams leaders have closely watched them developing. And now Vietnam is vying to follow China’s strategy of opening up the economy to investment while maintaining a tight hold on political power.
While corruption remains a matter of concern in Vietnam, government leaders say they are working to reduce the red-tapism and bureaucratic processes. At the same time, Vietnam is offering incentives to investors such as Intel.
Since Intel happened to Vietnam, the country has seen a huge change in the mindset of other technology companies who want to follow the giant chipmaker. High-end investors are coming here and sensing the opportunity. "Vietnam have a young work force, who are familiar with technology, and the training provided is getting better all the time."
What could be the tip of the iceberg, California consultancy neoIT ranked Vietnams Ho Chi Minh City as the top non-Indian city to be the most competitive location for outsourcing. The only other two non-Indian cities in the top 10 list are Shanghai and Manila.
While foreign companies are planning to set up their units in Vietnam, at the same time the country own home-grown high-tech units such as Glass Egg Digital Media and Alive Interactive Media Inc., in Ho Chi Minh City, which design parts of video games for companies such as Microsoft and Sony are also making their presence felt.
TMA Solutions, is again a Vietnamese companies, that develop software for clients including Nortel Networks Corp. and Alcatel-Lucent.
Vietnam may still be some way far from becoming the next India or China - but one cannot rule out the feasibility of its getting that major share of information-technology outsourcing market in the coming years.
Consistency of global outsourcing business relies largely on the quality of service that is provided rather than talent pool, and in this respect Vietnam has still a long way to go. Industry analysts says that 'English spoken by Vietnamese work force does not flow off as fluently as it done by Indians.
Catch them young is the buzzword for Vietnam's government who are now focused on improving education to strengthen the talent pool and getting in early to tap as much talent as they can. So when they finish out of college they are well acquainted with the nature of business and aspire to snag the kinds of jobs that can help them climb into the countrys middle class.
|