“After 30 years of doing outsourcing, Vietnam now has basic conditions to shift to R&D and create technology products,” said PM Nguyen Xuan Phuc at Make in Vietnam, a national technology firm development forum held in Hanoi some days ago.

Make in Vietnam’ is derived from ‘Make in India’. After the campaign was launched, Make in India helped the South Asian country attract $230 billion worth of committed investments. Will Vietnam be able to pursue an ambitious plan like India’s?

PM Nguyen Xuan Phuc at Make In Vietnam 2019

According to the Ministry of Information and Communication (MIC), in 2018, Vietnam’s IT industry had turnover of $98.9 billion, a growth rate of 8 percent over the year before.

Of this, hardware – electronics brought $88 billion and software $4.3 billion, IT service $5.7 billion and digital content service $800 million.

For many years, Vietnam has been mentioned as a ‘factory’ of the world where the biggest manufacturers locate their production bases, including Intel, Samsung and LG.

A report from Oxford Economics showed that FDI in the manufacturing sector in Vietnam, bolstered by electronics production, has grown by 11 percent per annum in the last five years.

Vietnam wants to shift from an outsourcing base for South Korean and Japanese conglomerates to a R&D center, where new technologies and products are created.

Nicholle Linder from Global Financial Services commented that Vietnam has the best conditions to become a Silicon Valley in Southeast Asia. She believes that Vietnam will surpass Singapore to become the Silicon Valley in five years.

The reasons are the No 1 position held by Vietnam in terms of software export turnover in the region and the availability of tens of thousands of technology students. There are more than 10,000 technology firms in Vietnam.

Meanwhile, according to Topica Founder Institute (TFI), in 2018, Vietnam had 92 startups receiving investment capital of $890 million, a three-fold increase compared with 2017.

Vietnam now has many successful startups, including Tiki, MoMo and VNG which have received huge investments from the world’s large corporations such as JD.com, CyberAgent Ventures, Sumitomo, Standard Chartered and Goldman Sachs.

However, analysts warned that Vietnam will still have to do a lot of work to become an R&D center. FPT, the leading IT group, has only announced robot models and simple self-propelled vehicles. BKAV makes smartphones, but it is the only firm doing so.

The good news is that Viettel and Vingroup, the conglomerates with big revenue, have begun making heavy investments in technology.

Vingroup has VinTech City, a project striving to become a Silicon Valley in Vietnam, incubating new technology startups.