Vietnam Poised to Catch Up With Outsourcing Demand

Tiny country is making strides to become a superior outsourcing alternative to China and India. With wages increasing in both China and India, a number of tech companies are taking a good look at Vietnam as an outsourcing alternative. As a result, the country’s GDP surged last year by almost six percent as Samsung, Microsoft, LG, and Intel invested in large operations there.

Early this year, a Gartner report named Vietnam in the top tier of emerging market locations, right behind China and India. Can this tiny country, with a workforce long on loyalty, hard work, and entrepreneurial spirit, build itself into a viable alternative to the behemoths?

Without a doubt, the foundation on which to build is strong. The Vietnamese have a deep cultural affinity and long history in the STEM disciplines — science, technology, engineering, and math. Vietnamese children are exposed to computer science training at a young age and are competitive in international math and science exams.

While new to the outsourcing game, the country has seized upon it and is rapidly ramping up with the help of private and public institutions. Building on the existing technological strength of the workforce, these organizations are focused on improving workers’ “soft skills” such as working on teams, creative problem solving, and proficiency in the English language. While some estimate it may take Vietnam another 5-10 years to become globally competitive, others believe the country may hit that goal sooner rather than later.

One group — The Higher Engineering Education Alliance Program (HEEAP) — founded by Intel, Arizona State University, and USAID in 2010, is leading the charge. The group seeks to increase the number of Vietnamese engineering schools that meet accreditation standards by training professors in modern teaching techniques and updating university IT systems.

Governments, both local and abroad, are also stepping in to help. In 2008, Germany and Vietnam partnered to create the Vietnamese-German University (VGU), an English-based technical school with a strong emphasis on research. While the school currently only has 1,000 students, it recently received $180 million in funding from the World Bank to expand operations to 12,000 students, lecturers and researchers by 2017.

While these large governmental and corporate forces are teaming up to address university-level schooling in Vietnam, private tutoring companies are moving to meet primary and secondary school students’ needs by developing courses in applied math and English.

Competitions like the Young Maker’s Challenge and Innovation & Technology Camps for high school students are creating a whole generation of budding entrepreneurs. They are perhaps drawing inspiration from Dong Nguyen, the Vietnamese creator of the mobile game Flappy Bird, which was earning $50,000 a day in less than a year of distribution.

In this rising economy, even the traditionally underserved are gaining access to technical education. One such organization is Orphan Impact, a NGO that builds computer centers and runs training programs for Vietnamese orphanages.

While these programs and organizations are building a talent pipeline for the future, private tech companies like KMS that need skilled workers right now are investing in training and mentorship programs like the Vietnam IT Organization (VNITO) and the HCMC Software Testing Club.

Vietnam, long existing in the shadow of its larger neighbors, is making all the right moves and moving quickly towards its goal of becoming a global tech powerhouse in its own right. With all this growth and training, a “Made in Vietnam” sticker on sophisticated technology may someday be as ubiquitous as “Made in China” is today.

For more info be sure to read my article, “The Promise of Outsourcing to Vietnam,” which appeared in TechCrunch.

Schedule a Free Consultation

Quickly ramp-up teams and accelerate the delivery of your new software product.