IT industry slowed by lack of skills
HCM CITY (VNS)â€” Despite strong growth in recent times, the information technology industry in HCM City and Viet Nam is still far from meeting Japanese companies’ needs in terms of know-how and human resources, an industry insider has said.
“Japan is one of the biggest software markets for Viet Nam, with 35 per cent of its turnover coming from that country,” Nhan Dan (The People) newspaper quoted Chu Tien Dung, deputy chairman of the Viet Nam Software and IT Service Association (VNASA), as saying.
Viet Nam has to train human resources to meet Japanese demand, he said.
In 2011 the industry achieved revenues of US$20 billion, an increase of 17.6 per cent year-on-year, but software accounted for only $1.2 billion.
The industry has 1,500 companies and 80,000 programmers.
According to a survey last November conducted by Japan’s Information Technology Promotion Agency (IPA) of 1,100 Japanese IT companies who outsourced their work, 31.5 per cent of them preferred Viet Nam.
The figures were 20.6 per cent for India and 16.7 per cent for China. But only 23.3 per cent actually outsourced to Viet Nam compared to 78.1 per cent for China.
Annually Japanese firms spend $10 billion on outsourcing but Viet Nam only accounts for 4 per cent of that.
IPA representatives said 88.5 per cent of Japanese companies preferring Viet Nam do so because they need young human resources to replace their own ageing workforce and diversify sources.
Information technology accounts for 10 per cent of Japan’s GDP, and software alone for 4 per cent.
The IPA said the biggest challenge for Japanese companies in Viet Nam is the shortage of professional human resources and language barrier.
For instance, Nissan Techno Viet Nam, a company that designs software for car maker Nissan, has 2,000 programmers. The company spent three years to recruit and train them in English, Japanese, and even driving.
In the 15 industrial and processing zones in HCM City, only 10,000 out of 270,000 workers have university degrees, meaning it is difficult to achieve any value-addition. â€” VNS