Vietnam and New Zealand, set to dominate the tech world
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New Zealand’s technology connections with Vietnam are taking off, according to Graeme Muller, NZTech chief executive.
Vietnam is Asia’s new tech manufacturing hub and New Zealand tech companies are setting up offices in Vietnam to escalate tech business, Muller says.
“Vietnam is one of our fastest growing markets and we already know technology is the fastest growing industry sector in New Zealand. Foreign investment in Vietnam has driven major global tech firms such as Samsung, LG Electronics, Intel, Nokia, Fuji Xerox to set up new production plants in Vietnam as opposed to China,” he says.
“We expect to see a Kiwi-Vietnam tech business hub open in Ho Chi Minh City very soon which is exciting. The shift towards Vietnam as a hub is expected to continue based on a young working population and lower labour cost,” Muller says.
Currently, an award-winning Auckland tech company, Augen, has an office in one of Vietnam’s biggest tech hubs in Ho Chi Minh City. Another NZTech startup member, Linq.it from Wellington, is developing data flow modelling to help business decision-making and are partnering with a Vietnamese development team.
"Vietnam could be a gold mine for New Zealand. What makes New Zealand one of the better choices for Vietnam is that we are not only a western country, we are one of the most innovative western countries,” Muller says.
According to Muller, the Vietnam government is supporting and promoting the development of technology in the country with hi-tech parks, such as the Saigon Hi-Tech Park in Ho Chi Minh City. Investors in these parks benefit from corporate tax reductions and exemptions.
On top of this, Vietnam’s emergence as a global centre for outsourced service provision means opportunities exist for domestic development in software services for health, education, banking and smart agriculture, Muller says.
When it comes to the skills shortage Vietnam has been hit hard, according to Muller. In fact, there are an estimated one million additional software engineers required to meet ambitious target set by the government for the software and IT services sector, he says.
However, last year Vietnam was awarded first position in the world outsourcing location rankings by New York’s Cushman & Wakefield research. Vietnam moved ahead of China based on growth of its software development industry, and it is estimated that the labour cost for outsourcing services in Vietnam is around half the rate of India. Vietnam produces about 40,000 IT bachelor degrees annually, Muller says.
With a population of nearly 95 million people, and 60% being under 30 years old, IT is a big business in Vietnam, Muller says. Recognising this, Google ranked Vietnam among their top 10 global growth markets, and 40% of all apps on Microsoft’s App Store globally are engineered in Vietnam.
The country has the 52nd largest economy in the world while New Zealand is the 53rd largest economy on the planet.