Insights from Mr. Le Truong Tung – Chairman of the Ho Chi Minh City Computer Association: The overall picture of Vietnam’s IT sector remains somewhat gloomy, yet notable breakthroughs have been recorded.
As scheduled, this July, the Vietnam IT Outlook Report 2006 has been completed and presented to the Vietnamese IT community by the Ho Chi Minh City Computer Association. This marks the sixth year that the Association has conducted an annual report on IT based on reliable sources both domestically and internationally.
Although the sector seems to show little progress, and in fact may be on a downward trend according to media assessments, Mr. Le Truong Tung – one of the authors of the report – believes that despite the somber outlook, there are significant breakthroughs worth noting. A reporter from VnMedia engaged in a discussion with Mr. Le Truong Tung regarding these insights.
It seems that in recent years, Vietnam’s IT sector has only developed at a “mediocre” level, and there are indications of regression without any dramatic changes. This is reflected in the rankings within the Vietnam IT Outlook report. Do you agree?
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“However, the overall picture of IT development in Vietnam is still quite chaotic, indicating signs of development, but there are still concerns.” |
Mr. Le Truong Tung: If we talk about the position of Vietnam’s IT sector in the global context, it hasn’t changed much. However, this also depends on the evaluation criteria. Not all global rankings account for all 191 countries, so sometimes, even if we are at the bottom of the ranking, being included at all is a positive sign. Changing a few ranks is not overly significant; what truly matters is how the world perceives Vietnam and how they will engage with us. This deserves our attention.
Regarding development aspects, there are many positive signs. In recent years, Vietnam’s IT sector has experienced several major breakthroughs, especially in software development and services related to content industries and the Internet. For instance, 2005-2006 continued to witness rapid growth in Vietnam’s Internet and telecommunications sectors. After 12 months, the number of Internet subscriptions surged by 86%, and the number of Internet users increased by 80%. If the previous year marked Vietnam’s Internet user percentage surpassing the Asian average of 8.4%, this year, that percentage reached 16% (as of June 2006), exceeding the global average of 15.7%. In my view, each year, the IT sector highlights certain key milestones, and there are still growth directions from the previous year that can be leveraged.
Based on the figures presented in the 2006 report, what is your assessment of the current state of Vietnam’s IT sector?
Mr. Le Truong Tung: I believe that the growth rate of over 20% per year for Vietnam’s IT sector is high compared to the average growth rates reported globally and regionally. When compared to Vietnam’s overall economic growth rate of 8% per year, the nearly threefold higher growth rate in IT indicates that the sector is on a rapid growth trajectory.
The position of Vietnam’s IT sector within the overall economy is now clearly established. Although, when compared to other industries, there are times when its growth rate increases manifold, while at other times it may only surpass other sectors by a slight margin. However, a slight slowdown in growth may actually be beneficial. In any economic sector, the initial stages often see rapid growth, but a slowdown can indicate that the sector is beginning to delve deeper with a relatively stable orientation. Even powerful IT nations like Japan and the USA maintain stable growth rates.
However, it is important to note that looking ahead, the IT landscape in Vietnam from 2006-2010 is still not clearly defined. By this time, we should have had a clear direction for the next five years regarding the IT sector, as we are transitioning from the 2001-2005 period to 2006-2010 while currently, we are still formulating our five-year plans. Some strategies proposed are often still lacking in clarity, such as needing guidance for practical implementation. Meanwhile, some strategies have yet to be developed.
Thus, it can be said that the figures presented in the report show good growth rates across all sectors, even if they do not match previous years. However, the overall picture of IT development in Vietnam remains quite chaotic, indicating signs of growth, yet there are still underlying concerns.
The report indicated that 2005-2006 marked a milestone for IT partners increasing their investments in Vietnam, including Intel’s project which received approval from the Vietnamese government to build a factory valued at $300 million. How does this reflect our ability to attract IT partners?
Mr. Le Truong Tung: The IT market is one of the global markets, making it challenging to have a purely local IT economy. The same applies to Vietnam’s IT market. In my opinion, both the software and hardware industries can only thrive if they attract foreign partners, especially large IT firms.
Recently, the presence of companies like Fujitsu and Canon, and especially Intel’s $300 million investment in building a chip factory in Ho Chi Minh City, has somewhat demonstrated Vietnam’s investment attraction capability. If we continue to attract more foreign partners, particularly large ones, these events will become very important. At that point, Vietnam’s IT sector will also share the global market in terms of technology.
Thank you!
