Why Vietnam, and is it the right time for foreign investors to act?
Insights from Cuong Nguyen, Managing Director of NashTech, at Virtual Talk organised by MIC and ITU
The Industry 4.0 era, with its emerging technologies, is bolstering globalisation and fostering digital tech firms worldwide to explore new opportunities for innovation and transformation. Nations around the globe are striving to keep up with the fast pace by implementing a wide range of activities and deployment. And Vietnam is no exception. Foreign investors are exploring Vietnam, and its potential, to seize investment opportunities.
So, why Vietnam? Is it the right time for digital firms to invest? These are common questions investors often research about and ask. To answer these questions, on Wednesday 21st October, the Ministry of Information and Communications (MIC) of Vietnam and International Telecommunication Union (ITU), the United Nations specialised agency for ICTs (Information and Communication Technologies), joined together at a virtual talk themed “Why Vietnam?”.
NashTech was honored to have Mr. Cuong Nguyen, Vietnam Managing Director, as one of the panelists discussing the digital landscape of Vietnam and exploring its full potential. In this article, let’s recap some key highlights of the virtual talk.
This has become a heated debate and the panelists were exhilarated to discuss the opportunities and challenges that Vietnam brings to foreign investors.
According to research of The World Bank, the GDP of Vietnam has grown nearly three times between 2002 – 2018 and many sectors have been exponentially developing in the last few years. Also, there is a trend of non-cash transactions that increased rapidly in Vietnam in recent years. As data from the Payment Department of the State Bank of Vietnam shows, the total transaction volume through the Internet banking electronic payment system in the first five months of 2019 increased by 23.23% for the number of transactions, and by 17.63% for the transaction value, as compared to 2018.
All these factors indicate the promising opportunities for foreign investment in Vietnam, especially in emerging technologies such as Big Data, AI, Machine Learning etc.
Given the ever-changing, fast pace of the technology world, sometimes policy struggles to keep up with the diversity and growth of the industry. However, the Vietnamese government is very open to feedback from enterprises to incorporate new technology and innovation, thus, plays an active role in encouraging the growth of the ICT industry in Vietnam.
Recently the Ministry of Labour, Invalids and Social Affairs (MOLISA) was working on a new decree about resource recruitment and management regulation in Vietnam for foreign organisations. They seek feedback from enterprises including Foreign Direct Investment (FDI), including NashTech. We provided our feedback and saw it reflected in the next version of the draft decree. This shows the impressive speed and spirit to “seek the truth” from the Vietnamese government.
Is this the right time to make your move?
Nowadays, E-commerce has grown and emerged significantly, especially in Vietnam. Especially during the COVID-19 pandemic, Vietnam has demonstrated an outstanding reaction to it. Working from home (WFH) has become the new normal to many companies in Vietnam. Thanks to the developed digital platforms that service providers in Vietnam offer, such as stable internet bandwidth at home, non-cash transaction support, online shopping, door-to-door delivery, etc. daily activities can continue as normal, and with ease.
“We have many global clients who have recently come to NashTech asking for help because their team in other offshore centers could not cope with the impact of Covid-19. They are not ready for the WFH model while, in Vietnam, business still operates smoothly. During social distancing, over 1700 NashTech Vietnam staff worked from home without having any impact to client’s projects.”
Mr. Cuong Nguyen, Managing Director – NashTech
According to Cuong, this is a good time to invest into Vietnam because:
- Vietnam’s economy is growing very fast. GDP will soon surpass Singapore and Malaysia in 2020 and Vietnam is amongst very few countries in the world that has positive growth during Covid-19 (IMF forecast).
- A large proportion of the population is in the golden age period. About 70% of the population is under the age of 35.
- There is a very good talented resource pool with nearly 1 million ICT resources which is growing at a rate of 10% per year (ICT white book 2019) (Report from PWC and Vietnam Chamber of Commerce and Industry (VCCI)).
- Students in Vietnam prefer STEM subjects
- There is a fast-developing infrastructure system, an open environment and the country is open for competition
This is the golden time for foreign investors to come to Vietnam as the market is maturing with a large population that are willing to spend budgets on ICT.
“In the past, only big state government companies, or large banks, spend multimillion USD on technology / software solutions projects. But recently, we have seen more and more private companies in Vietnam spending a huge amount of budget on digital transformation projects. Even during the Covid-19 period, a client in the real-estate sector in Vietnam still spent nearly 1 million USD working with NashTech to develop their new B2C platform and will continue investing millions to further develop that platform later this year and next.”
What can be done to improve?
To close the debate, panelists gave their suggestions and opinions on what Vietnam’s government and companies should do to meet foreign investors’ expectations and improve the country’s reputation.
Cuong Nguyen closed by saying, “at NashTech, annually, we conducted a wide range of activities, both physically and virtually, to invite executives from potential clients globally to get to know more about Vietnam and gain a broader, deeper understanding on how we operate and deliver, as well as understand the culture. They not only become clients of NashTech, but they become investors in Vietnam – they see and believe. So, I would recommend focusing more on communication to help foreign investors know more about Vietnam and our capabilities.”
The panel insisted that more communication channels and activities should be organised to share information and dispel the myths that are commonly falsely assumed, thus, attract more foreign investment.
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