According to Statista, Vietnam’s outsourcing market is projected to reach a value of nearly US$698 million this year.

 

 

Visitors at FPT kiosk during a tech expo in HCM City in November 2024. — VNA/VNS Photo

 

IT outsourcing has become a key strategy for many Vietnamese tech firms, generating hundreds of millions of dollars annually.

 

According to Statista, Vietnam’s outsourcing market is projected to reach a value of nearly US$698 million this year. With an annual growth rate of 16.38 per cent, Việt Nam could generate $880 million from outsourcing by 2028.

 

Research and Markets estimates the global outsourcing market will reach $769.7 billion this year, growing at a compound annual growth rate (CAGR) of 5.54 per cent, and may exceed $900 billion by 2027.

 

Meanwhile, the global semiconductor market, a fiercely competitive field, is expected to generate about $1 trillion in revenue by 2030. Assuming a growth rate of 5.5 per cent annually, the outsourcing market may also reach the $1 trillion mark by 2030. While both markets hold immense value, outsourcing presents a more accessible entrance, especially as it aligns with Việt Nam’s competitive advantages.

 

FPT, one of Việt Nam’s leading technology companies, recently signed a memorandum of understanding to supply semiconductor engineers to Toshiba Information Systems, addressing Japan’s current semiconductor workforce shortage. FPT currently employs over 80,000 staff in 30 countries worldwide. Another tech company, CMC, has 70 per cent of its workforce dedicated to foreign markets as many smaller Vietnamese tech firms are expanding globally.

 

Over the years, Vietnam’s open-door policies, incentives and significant government investments in businesses, infrastructure and education have driven rapid growth in the technology sector, particularly in developing an abundant skilled workforce.

 

Despite variations in ranking criteria, Vietnam has consistently appeared in the top ten global outsourcing providers over the past two years. Many experts consider Vietnam one of the few Asian countries capable of competing with major players like China and India in software outsourcing.

 

“It’s challenging for companies to launch products that can break into international markets, as successful products remain rare. Outsourcing, therefore, is the suitable path for many Vietnamese companies today,” said Đặng Văn Tú, CTO of CMC Global.

 

In an interview with VnEconomy, Tú said tech outsourcing aligns with Vietnam’s current strengths. Developed markets such as Japan, the US, and Europe face severe talent shortages and need to cut costs. Meanwhile, Vietnam offers an abundant, cost-effective tech workforce capable of adapting to the always-changing technological landscape.

 

Nguyễn Thiện Nghĩa, deputy director of the Department of Information Technology and Communications Industry under the Ministry of Information and Communications, said Vietnam’s biggest advantage over global markets is its affordable and high-quality workforce. Vietnamese IT engineers’ salaries are only about 1/10th of the global average, yet their work quality is highly regarded.

 

Nghĩa said Vietnam’s domestic market is too small compared to the current scale of its tech workforce. In contrast, the global technology market presents numerous opportunities for Vietnamese talents.

 

To expand internationally, Vietnamese tech companies must either sell products or export a workforce that meets international market demands. Between the two, outsourcing has been the better choice for most Vietnamese businesses.

 

Vietnam’s high standing in software outsourcing is also a promising sign for the country’s technology sector. Meeting the stringent standards of major tech markets demonstrates the capabilities of Vietnamese engineers and offers opportunities for them to learn new skills and technologies.

 

The Southeast Asian country has been introducing more favourable policies and incentives to drive innovation and scientific development. The number of tech graduates is increasing, and the quality of the workforce is steadily improving.

 

The presence of major tech companies in Vietnam, such as Samsung and Apple, coupled with changes in university training, government initiatives, and corporate efforts, has significantly enhanced the technological capacity of Vietnamese professionals. As the demand for tech talent continues to surge, especially in developed markets, software outsourcing will likely stay as a main source of income, said experts.

 

However, they warned of the fierce competition in international markets, particularly against larger talent pools in India and China. — VNS

 

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