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Rapid advances in information and communications technology (ICT)

have created tremendous opportunities for economic and social gains
all over the world, and Vietnam is not an exception. !ey
infrastructure of !nowledge"#ased economies, ICT is a driving force for
rapidly growing new sectors including electronics and software
development, #usiness process outsourcing and various internet
services. $owever, it is undenia#le that #esides the oppotunities they
#ring, there have #een still so many threats remaining
Although ICT will have an enormous effect on tomorrow's society, surprisingly little
research has been conducted regarding its future environmental consequences. Most of
the wor that has been done has reached one of two opposing conclusions! either ICT will
bring only good things, from solutions to world hunger, the elimination of all
transportation problems and a revitalised democracy. "r it will bring nothing but
problems, accelerating resource consumption, introducing new to#ic materials and
resulting in greater inequity by introducing a digital divide that will worsen the already
unequal distribution of wealth and influence.
$o one nows specifically what role it will play in the future, but we now that it will be
significant and that our decisions today will influence the direction in which it will
develop tomorrow.
2.2.3 Opportunities
2.2.3.1 The trend toward cost-savings
lthough the downturn of the world economy has negatively
a%ected almost every economic sector, the case is not the same
for IT&. llie 'oung, Vice (resident of )artner (*++,) said-
.lthough things loo! gloomy for the larger glo#al economy, the
outsourcing mar!et represents a dichotomy- on the downside,
organi/ations0 cost"cutting outsourcing strategies may negatively
impact mar!et growth, #ut at the same time, the upside is that
outsourcing will #e adopted #y more organi/ations to help them
wor! through 1nancial and competitive challenges2. ctually, the
current economic slowdown will lead #uyers of IT services to
consider an increase in the percentage of their la#our in o%shore,
lower"cost locations.
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)artner0s report .4uropean &utsourcing and 5ervices 5urvey
Reveals Client &rgani/ation (riorities for *++,2 given in
6ecem#er, *++7 shows that 8*9 of organi/ations in the survey
appear to #e in the initial stage of their next outsourcing
endeavor, 3+9 up from the previous year. $owever, #udget for
IT& does not tend to increase. :;9 of these organi/ations ta!e
cost"savings as their 1rst concern in considering IT& destinations.
s for IT& price, )artner forecasts the price will decrease ; < *+9
in =orth merica and 4uropean mar!et. Concrete 1gures are
followed.
These a#ove 1gures indicate that the trend toward cost"savings
in IT& will increase. This is a great opportunity for low"cost
countries li!e Vietnam to attract more clients, win more
contracts, gain more reputation and accumulate more
experience.
2.2.3.2 Entry of MNCs to Vietnams IT maret
>ith a growing trend towards an expanding mar!et, multinational
IT companies will see! investing destinations that meet their
demands and strategies. mong sian countries, China and India
have registered strong IT development. $owever, most of ?=Cs
share the same formula of investment, i.e. China and India plus
one (another destination for investment) to minimi/e #usiness
ris!s. mong other sian countries, Vietnam has emerged as an
attractive new destination. t present, many ?=Cs in IT sector
are investing in Vietnam such as Intel, I@?, ?otorola, Canon, A),
and 5amsung in which Intel was one of the 1rst to enter
Vietnamese mar!et.
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The presentation of such ?=Cs will #e a strong driver of the
development Vietnam0s IT industry in general and IT& in
particular. Vietnamese companies, especially direct partners of
those ?=Cs, can learn their advanced s!ills of manufacture,
management and promotion. Vietnamese IT engineers in their
factories can gain valua#le experiences through #eing trained #y
pro1cient experts and wor!ing in professional environment.
@esides, revenue from IT& activities of those ?=Cs will also
contri#ute to Vietnam0s IT& output.
2.2.3.3 !otentia" of #a$anese maret
&apan is currently the largest maret for 'ietnam(s IT" industry and there are still
much potential in this maret. In )**+, revenue of &apanese software industry hit
,-. /0* billion. 1aving IT activities outsourced is a great trend among &apanese
companies in recent years with the annual growth rate of 2*3. &apan(s total value
of offshore outsourced IT activities in )**+ numbered ,-. 2.4 billion.
Although 'ietnam(s share in this maret is still moderate, but it is the third largest
share behind China and India. Annual growth rate of IT" activities between
'ietnam and &apan maintain at more than /**3 in recent years. In IT" relation
with &apan, 'ietnam has a great potential of processing embedded software
products, which accounts for 563 value of outsourced IT activities of &apan.
-imilarities in culture, society and the good relationship between two governments
are other reason for &apanese companies to choose 'ietnam as their IT"
destination. In fact, according to a recent survey of &apan Information Technology
-ervice Industry Association 7&I-A8, 'ietnamese companies are favourite vendors
of &apanese companies 925:.
2.2.4 Threats
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2.2.%.1 &trong"y com$etitive environment
The #iggest challenge from outside to Vietnam0s IT& industry is
the strong competitiveness from other countries, especially those
from (C region. lthough in *++,, Vietnam entered Top 3+ of
)lo#al 5ervices Aocation Index #y .T. Bearney, the country still
lags #ehind many other 54= such as ?alaysia (8
rd
), Thailand
(C
th
), Indonesia (;
th
) and (hilippines (:
th
), and far #ehind India and
China, countries that dominate the two 1rst places in the index.
China has many advantages of huge la#our force with more s!ills
and experiences than Vietnam, superior infrastructure and #ig
companies with large 1nancial resources. Their production cost is
also among the lowest in the world. t another level, India is the
leader in IT& sector, a competitor that Vietnam cannot directly
compete in near future. They have talented experienced vast
la#our pool which provides high Duality services, #ig IT
companies with prestigious #rand names and close colla#oration.
They also have a government with good vision and strategy to
support the industry e%ectively.
&ther competitors in 5outheast sian region such as (hilippines
(low production costs), ?alaysia (fairly high Duality services, good
infrastructure) and 5ingapore (good Duality, favora#le #usiness
environment) are also challenges that Vietnam has to face. The
most considera#le threat may come from (hilippines, the country
of eDual si/e, similar level and same targeted mar!et segment as
Vietnam.
2.2.%.2 The downt'rn of g"o(a" economy
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The glo#al economic slowdown can #e an opportunity to
Vietnam0s IT& industry when it encourages the trend towards low"
cost destinations. $owever, it is still a threat to glo#al ITEIT&
industry as a wholeF apparently, it is also a threat to IT& in
Vietnam.
The 1nancial crisis has resulted in a decline #y 3.39 in glo#al
*++, )6( with recession in all economic sectors of the world. IT
industry was not shoc!ed #y the recession li!e other sector such
as tourism, aviation and car manufacturing. $owever, the
industry was also negatively a%ected. Grom the growth rate of
H.39 in *++7, worldwide spending on IT decreased #y C.;9 in
*++,.
ConseDuently, Vietnam0s ITEIT& industry could not evade the
overall impact. ?eanwhile in the period of *++; < *++7, the
growth rate of Vietnam0s software sector was always of C+";+9,
in *++,, the 1gure fell to nearly 8+9. IT& sector also met many
diIculties as foreign clients cut their IT #udgets, cancelled deals,
delayed payments and deals, went #an!rupt and renegotiated
pricing.
The year *+3+ has witnessed some improvement in glo#al
economy #ut the constraints still exist. ?any economists #elieve
that at the end of this year, when the stimulus pac!ages of the
J5 and other countries in )*+ end, the world economy will fall
#ac! to recession. Thus, this is still an open threat for glo#al IT
industry as well as Vietnam0s IT& sector.
The fundamental nature of competition is changing charateri/ed
#y rapid change of technology, especially information of
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technology an communication, more important of !nowledge,
glo#ali/ation of mar!et,.... >hat do you thin! a#out the
oppotunities and threats for a 1rm doing #usiness in Vietnam.
Over the last few years, information technology's impact on society has become a
hot topic. It is clear that in the coming decades information and communication
technologies (ICT or IT will affect and reshape most parts of our society.
It will come to radically influence the global economy, and, to an un!nown degree,
our culture and the way we perceive the world, our relationship to it, and our
actions.
Although ICT will have an enormous effect on tomorrow's society, surprisingly little
research has been conducted regarding its future environmental consequences. Most of
the wor that has been done has reached one of two opposing conclusions! either ICT will
bring only good things, from solutions to world hunger, the elimination of all
transportation problems and a revitalised democracy. "r it will bring nothing but
problems, accelerating resource consumption, introducing new to#ic materials and
resulting in greater inequity by introducing a digital divide that will worsen the already
unequal distribution of wealth and influence.
$o one nows specifically what role it will play in the future, but we now that it will be
significant and that our decisions today will influence the direction in which it will
develop tomorrow.
"o beyond these polarised perspectives
The first challenge, if we want to tacle the challenges surrounding ICT for the future, is
to go beyond these polarised perspectives.
ICT is a tool that constitutes a new infrastructure, changing the way our societies
function, while its technical applications will give us totally new opportunities to both
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preserve the best elements of our society, and develop new and better solutions to our
e#isting problems.
As a whole, ICT is best viewed as a catalyst that can speed up current negative trends, or
alternatively contribute to a shift towards sustainable development.
$o one nows specifically what role it will play in the future, but we now that it will be
significant and that our decisions today will influence the direction in which it will
develop tomorrow.
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