SGH Asia was one of the “first-movers” in Vietnam as we pioneered the off-shore software development and outsourcing model in Ho Chi Minh City, which has now become one of the largest software development teams in Vietnam. This team delivers our ISO Certified, award-winning, and cost-effective off-shore software development and outsourcing solutions, that power our worldwide Client’s digital transformations with the latest technology, design thinking, and agility, while also energizing their legacy systems to future-proof their businesses!
The trend of software outsourcing to off-shore locations has continued to grow dramatically over the past decade as companies from a myriad of industries and geographical locations, reap the many benefits including lower costs with improved performance, specialised technology and industry expertise, and the availability of highly educated resources, all resulting in an improved focus on their core business concerns. While India and the Philippines have been common destinations for IT outsourcing, we would like to share with you why Vietnam is the ideal location to start your digital transformation journey with software development and outsourcing solutions that keep you ahead of your competition in an increasingly aggressive global business environment!
Number 1: Access to a Large, Young, and Dynamic Population!
Vietnam’s development over the past 30 years has been nothing short of remarkable, experiencing rapid demographic and social change. In 2019, its population reached 96.5 million, a dramatic increase from the approximately 60 million in 1986 when Vietnam first began its economic reform by adopting the Doi Moi Policy (expanded upon later in this article). This 96.5 million population is expected to expand to over 120 million by 2050, while the present life expectancy of 76 years of age, is the highest among countries in the region with similar income levels. In addition, Vietnam’s population is young and vibrant with a median age of only 30 and 70% being under the age of 35. This means that the country’s 96.5 million people consist of a considerable market comprising of a tech-savvy and digitally active younger generation that is driving Vietnam’s exciting innovation ecosystem. With Vietnam representing a country of opportunity and growth, this young and dynamic population is on the move, quickly adapting and embracing changing trends as more people move to urbanised areas for employment and business opportunities.
Number 2: The Vibrant Pipeline of Highly-Educated Fresh Graduates!
Vietnam not only out-performs its neighbouring countries in the South-East Asia Region on education rankings, it also shines on the global stage with examination results contributing to its ranking of 48th in the World Bank Human Capital Index, which is the highest rating for any lower-middle income country. Vietnam spends the equivalent of 6% of its GDP on education, which once again, is a greater proportion than its neighbours and very high by global standards. The Vietnamese government has been pursuing educational reforms for over a decade, focusing on boosting private investment in higher education and improving vocational training, while reducing unnecessary student workloads. In addition to the government’s investment in educational institutions, observers of Vietnamese culture attribute strong test scores to a well-designed curriculum for maths and science, external tutoring programs, as well as cultural and historical factors, such as the work ethic prized under Confucianism and the desire to rebuild the country. With a total literacy rate of approximately 96% for adults aged between 15 to 35, universities and colleges are churning out over 300,000 fresh graduates every year, who are motivated to seek exciting career development opportunities. In fact, supply doesn’t meet the demand with the intense competition for university places, as the country undergoes a demographic boom.
Number 3: The High Level of Technical and Scientific Literacy!
With Vietnam being an uber-connected country, with significant mobile penetration in both urban and rural areas, this digital connectivity fuels an increased interest among students of emerging technological trends and advances. Vietnam now has nearly 500 universities, colleges, and vocational education institutions across the country, with curriculum’s dedicated specifically to information and communication technology (ICT) related expertise. In fact, nearly 80% of the country’s graduates achieve degrees in technical and sciences’ related programs, resulting in an exceptionally high technical and scientific literacy rate. With the Vietnam’s Government continued investment in education and training, especially in the areas of Industry 4.0 technologies, graduates are able to launch their careers in the ICT sector with strong theoretical and practical knowledge of software development languages and methodologies. This high level of technical and scientific literacy will continue to drive Vietnam’s rapid transition from low-tech manufacturing into a service-oriented economy, as the country’s ICT market increasingly gains traction and becomes the 8th largest provider of ICT solutions globally, providing stiff competition for both China and India.
Number 4: The Cost-Effective Development Rates!
It is no surprise that many global giants are outsourcing their software development requirements to Vietnam-based providers, when you perform a development cost comparison and cost-benefit analysis. Software development costs are 90% more effective compared to the US, which has attracted many large North American-based companies to outsource their software development functions to Vietnam. Even when you benchmark the Vietnam software outsourcing market against other popular Asian-based IT outsourcing destinations such as India or the Philippines, Vietnam still achieves a 50% cost-saving compared to India and a 30% cost-saving compared to the Philippines. Vietnam continues this development as an ideal destination in the software outsourcing market with even Western European-based companies identifying that development costs in Vietnam are 50% more effective than their traditional Eastern European-based providers. In addition, the Vietnamese government, understanding how important foreign investments are, maintains a competitive currency to facilitate its fast-growing economy, led by exchange rate-sensitive exports, which further results in cost-effective labour rates even compared to its South-East Asian neighbours. With the primary objective of software outsourcing being to reduce development costs, Vietnam is now gaining the upper-hand and living up to its reputation as a “small but mighty country” as it emerges as a global software outsourcing powerhouse.
Stay tuned and follow us for more insights, as we present the “Top 10 Reasons To Choose Vietnam for Software Outsourcing!”