No 1 partner 

Experts estimate that the Japanese IT outsourcing market is worth $30 billion. With an average growth rate of 9-10 percent per annum, the figure is expected to reach $50 billion by 2028 and $60 billion by 2030.

Currently, the revenue of Vietnam’s IT firms is roughly $3 billion from the Japanese market (10 percent). The revenue growth rate reached 30 percent per annum in the last period, but has slowed down to below 10 percent recently.

Raising the annual growth rate of Vietnamese IT firms’ revenue back to 20-30 percent is now the goal of the Vietnam Software and IT Services Association (Vinasa) and its member companies. They believe that the goal is feasible as Japanese businesses have increasingly high demand for cooperation, while Vietnam’s IT firms have prepared for the ‘march towards Japan’.

According to Vinasa deputy secretary general An Ngoc Thao, cooperation for development between Vietnam and Japan began two decades ago, soon after the Vietnam’s software industry formed. 

In 2002, when Vinasa was established, Japanese partners came to Vietnam for cooperation. In 2014, Vietnam’s IT firms became Japan’s important partners. Vietnam is the second largest and favorite partner for Japan.

Many years ago, when Vietnam’s IT firms still were not aware of the great potential and opportunities, Vinasa went ahead to explore and cooperate with Japanese state agencies, associations and universities to learn from training programs, policies to support IT firms, business culture and specific tasks of an enterprise such as sales, staffing and technology. The knowledge from the market exploration helped Vietnam’s IT firms become confident in entering the Japanese market.

To date, Vinasa has established partnership with about 30 Japanese associations or organizations related to IT, including IPA (Information Technology Promotion Agency), JISA (Japan Information Technology Service Industry Association) and professional associations (embedded software, computing…), as well as large trade organizations, such as JETRO (Japan External Trade Organization), AJC (ASEAN-Japan Center) and local authorities of Kanagawa, Yokohama, Osaka and Fukuoka.

On August 6, Vinasa joined forces with JETRO and JISA to organize the 11th Vietnam IT Day in Japan, under the sponsorship of the Ministry of Information and Communications, to convey a message that Vietnam is ready to become comprehensive IT partner to help Japan develop its digital economy sustainably, and that Vietnam’s IT firms are committed to work with Japanese businesses.

Japan’s economy has been facing difficulties in recent years because of the pandemic and the sharp yen depreciation (30 percent). Meanwhile, Vietnam’s IT firms’ profits account for 20-30 percent of total revenue, which is very moderate. However, most IT firms have not considered giving up the Japanese market and Japanese partners.

In the time to come, Vietnam’s IT firms will not only undertake work but will, together with Japanese partners, improve competitiveness and contribute to socio-economic development.

With Vietnam IT Day 2024, Vinasa and Vietnamese IT firms work shoulder to shoulder to upgrade Vietnam-Japan cooperation in the IT field to new heights, deserving of the comprehensive strategic partnership between the two countries.

Vietnamese firms’ expansion

Previously, IT relations between Japanese and Vietnamese firms was only project outsourcing or manpower dispatching.

Nowadays, most Vietnam’s IT firms have expanded their operation scale. Their management skills have improved and Vietnamese workers’ qualifications are highly appreciated (Vietnamese human resources are ranked among the top countries in international rankings). 

These factorss, plus the anticipation of new technological trends, such as AI and Big Data, allow Vietnamese IT firms to undertake consulting on IT system switching for Japanese enterprises as well. Some Vietnam’s firms even have products specifically designed for the Japanese market.

“In the past, it was so difficult to find Vietnam’s IT firms with 300-500 workers, but nowadays, we have IT firms with tens of thousand of workers. There are 15 IT firms with more than 1,000 workers each, about 30 firms with 500-1,000 workers, 100 IT firms with 200-500 workers and hundreds of firms with 100 workers.” Thao said.

Binh Minh