The Growth of IT Industry in Vietnam
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Vietnam’s IT industry is developing quickly, becoming a key hub for global tech entrepreneurs and local startups. Improvements in communications infrastructure, software, and education technology have positioned Vietnam as a potential major player in the global IT market.
Digital technology companies in Vietnam lead in development, innovation, and research, driving the country’s digital transformation. These advancements position Vietnam to impact the global digital technology arena significantly. In this article, we will explore the current state of the IT industry in Vietnam, a prime destination for IT talent.
ASEAN countries see digital transformation and digital-based economic development as effective ways to advance their cooperation agenda. Last year, Vietnam, the ASEAN chair, was committed to fully digitalizing the ASEAN nations.
The Australian Trade Commission predicts that Vietnam’s ICT industry will grow by about 8% annually from 2022 to 2026. With the ongoing growth of the digital economy, Vietnam’s GDP could increase by an additional US$1 trillion by 2025. Vietnam is becoming a key production hub for IT hardware and services, including software development outsourcing, which is fueling the rapid growth of the ICT sector. Success in e-commerce also helps Vietnam achieve its goals and develop its digital economy quickly.
IT Industry in Vietnam
According to the Vietnam Investment Review Central Institute for Economic Management, Vietnam’s GDP could rise by US$28.5 billion to US$62.1 billion by 2030, marking a 7-16% increase.
Vietnam has quickly become a tech hub in Southeast Asia, rapidly growing its digital economy. Several factors contribute to this success, including a large, young population, high smartphone usage, and a tech-savvy workforce. Government support has also played a crucial role, with initiatives to foster innovation, such as tech hubs and startup incubators. Additionally, Vietnam’s location makes it an attractive destination for foreign tech companies aiming to enter the Southeast Asian market.
The digital generation, born between 1992 and 2002, constitutes 21% of Vietnam’s population. The age distribution is as follows:
In 2022, Vietnam had 72.1 million Internet users, placing it 13th in the world.
The Ministry of Education and Training oversees IT education in Vietnam. Recently, the government has given higher education institutions more flexibility to encourage innovation. For example, removing individual entrance exams for each institution has led to higher admission rates.
Vietnam’s IT talent pool is growing both in numbers and in expertise. The country produces around 80,000 IT graduates each year, with many specializing in fields like computer science and information technology. According to Adamo Software, approximately 30% of developers have over 5 years of experience, while 52.5% have less than 3 years of experience.
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Vietnam has implemented a plan to drive national digital transformation. The plan aims to enhance digital government, society, and economy, contributing up to 30% of the country’s GDP.
The Vietnam National Innovation Center (NIC) is focused on supporting the startup ecosystem, fostering innovation, and advancing growth through scientific and technological progress.
The government has made innovation a key goal to boost economic growth, with the Ministry of Planning and Investment spearheading this effort. NIC has identified the following critical areas for development:
Regarding Corporate Income Tax (CIT) incentives, IT companies in Vietnam benefit from a CIT exemption for the first four years, followed by a 50% reduction of the 10% rate for the next nine years. After that, companies pay a 10% CIT for two more years. The standard CIT rate of 20% applies from the 16th year of operations.
Why Invest in Vietnam?
Vietnam’s cloud computing market reached a value of over US$133 million, supported by 27 dedicated data centers and 270,000 servers. The push for digital operations during the COVID pandemic is expected to drive this market to USD 500 million within five years.
Vietnam ranked sixth in Southeast Asia on OpenGov’s 2022 Government AI Readiness Index with a score of 53.96, which is over 20% higher than the global average. In 2021, the AI sector attracted US$23 million in venture capital.
Salaries in Vietnam’s information technology industry vary widely. The minimum wage is VND 4,200,000, while the average maximum salary, including bonuses, is VND 22,500,000.
Salaries in Vietnam’s information technology industry vary widely. The minimum wage is VND 4,200,000 (~$165), while the average maximum salary, including bonuses, is VND 22,500,000 (~$885). Compared to other countries in SEA, this is significantly low.
Country |
Minimum Wage (Monthly) |
Average Maximum Salary in IT (Monthly) |
Vietnam |
VND 4,200,000 (~$165) |
VND 22,500,000 (~$885) |
Thailand |
THB 10,000 (~$290) |
THB 90,000 (~$2,600) |
Philippines |
PHP 11,000 (~$200) |
PHP 100,000 (~$1,900) |
Indonesia |
IDR 4,200,000 (~$285) |
IDR 30,000,000 (~$2,000) |
Malaysia |
MYR 1,200 (~$270) |
MYR 10,000 (~$2,400) |
The COVID-19 pandemic has significantly affected daily life and work, creating market uncertainties. Yet, the labor market has adapted positively, with employers and employees quickly adjusting to new hiring and working models. The IT workforce and digital transformation policies have helped lay a strong foundation for economic recovery in 2022.
Accelerance’s 2022 Global Software Outsourcing and Rates Guide recognized Vietnam as one of Southeast Asia’s top two IT outsourcing destinations. Additionally, it was ranked the second most promising in Asia-Pacific for technical skills on the Global Skills Index (2020).
Vietnam’s IT human resources show strong potential for growth and innovation in domestic products. This opens up opportunities for software outsourcing and technological value creation. However, strategic investment, development, and orientation are crucial to achieving socio-economic goals and ensuring the welfare of Vietnamese IT professionals. Businesses, IT talents, and intermediaries can all contribute to talent-driven economic development.
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A report by Google, Temasek Holdings Pte, and Bain & Co. highlights Vietnam’s growing prominence in the startup scene. 2021 the country attracted US$2.6 billion through 233 private deals, a notable rise from US$700 million across 140 deals in 2020.
During the pandemic, the number of startups in Vietnam doubled by mid-2022. Major investors like Sequoia Capital, Warburg Pincus LLC, and Alibaba Group Holding Ltd. have supported these ventures.
Government officials aim to make Ho Chi Minh City a key destination for tech funding. Recent initiatives focus on attracting foreign investment in high-tech projects and offering incentives to draw international talent and companies to establish innovation research centers.
Vietnam is already seeing success, with its first unicorn, gaming developer VNG Corp, expected to pursue a US listing soon.
1. Growth in Software Development and IT Services
2. Rise of Artificial Intelligence and Machine Learning
3. Expansion of Fintech
4. E-commerce Growth
5. Cybersecurity Awareness
6. 5G and Telecommunications Infrastructure
7. Startup Ecosystem and Innovation
8. Digital Transformation in Enterprises
9. Government Initiatives and Policies
10. Education and Skill Development
Strategies to Approach IT Market in Vietnam
Foreign IT companies should focus on collaboration and knowledge sharing to succeed in Vietnam’s competitive market. Implement these strategies to improve these aspects:
Companies looking to enter or expand into Vietnam’s IT sector should conduct thorough market research, identify target segments, and develop a detailed market entry plan. This strategy may include partnering with local IT firms, using government support programs, and investing in talent development initiatives. By taking these steps and seizing the opportunities in Vietnam’s IT industry, companies can position themselves for long-term success in this growing market.
Vietnam’s IT industry is booming, driven by a young, tech-savvy population and strong government support. Its rapid digital growth, competitive labor costs, and vibrant startup scene make it a prime spot for investment. Key sectors like software development, AI, fintech, e-commerce, and cybersecurity are on the rise, positioning Vietnam as a major player in the global IT market.
To succeed, foreign companies should stay informed about local regulations, build strong local partnerships, and foster collaboration and innovation within their teams.
Ready to tap into Vietnam’s IT potential? Contact TECHVIFY today. Let our top-notch experts guide you through the landscape and help you achieve your business goals with cutting-edge solutions. Don’t miss out—let’s make your next big move together!
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