IT industry in Vietnam enjoying boom

10:08 | 07/11/2018 Information Technology

(VEN) - Information technology (IT) has been growing at an impressive rate of 30 percent per year, playing an important role in Vietnam’s socioeconomic development.

it industry in vietnam enjoying boom

Great revenues

According to the Vietnam Software and IT Services Association (VINASA), the Vietnamese IT industry has seen a steady growth in the past few years. The industry reached revenues of more than US$70 billion in 2017, creating over 780,000 jobs. Of which, the hardware industry contributed to more than US$60 billion, accounting for about 86 percent of total revenues.

Most of the industry is foreign invested, with major corporations pouring billions of US dollars to build electronic component manufacturing factories in Vietnam.

The Korean giant Samsung built eight factories and one research and development center in Vietnam at a total investment of more than US$17.3 billion. LG spent US$1.5 billion on a new factory in Hai Phong City, which specializes in assembling TVs, mobile phones, washing machines and air conditioners, while Intel Corporation, the world’s largest chipmaker, opened a US$1.04-billion chip assembly and testing facility at the Saigon Hi-Tech Park in Ho Chi Minh City.

IT development has contributed to positioning Vietnam on the world map, making it one of six leading destinations for technology transfer in the Asia-Pacific region in 2016, according to a report by the US research and advisory firm Gartner. In addition, the strategic advisory firm for global outsourcing and investments Tholons has rated Vietnam as the eighth leading provider of IT services globally.

Facilitating development

According to the VINASA, the Vietnamese government has adopted policies creating favorable conditions for IT development. These includes Resolution 36-NQ/TW dated July 1, 2014 of the Politburo on enhancing IT application and development and Prime Ministerial Decision 392/QD-TTg of 2015 approving the target program for development of the IT industry by 2020, with a vision by 2025.

The government also issued Resolution 41/NQ-CP on tax incentives to promote IT application and development in Vietnam in order to improve competitiveness and attract investment in the sector. This resolution provides preferential terms on corporate income tax and personal income tax. For example, new IT projects with over 1,000 full-time employees enjoy an annual corporate income tax of 10 percent for 15 years.

Vietnam is rapidly developing a labor force to meet the requirements of the IT surge. Mathematics and IT are the top choices of Vietnamese students. With more than 290 universities offering IT studies and 55,000 students enrolled each year, Vietnam is a leading IT service destination in Asia.

The IT industry yielded revenues of VND1,026 trillion in the first half of 2018, an increase of 16.15 percent compared

to a year ago.

Nga Quynh