Vietnam’s ICT sector evolves beyond outsourcing, eyes global expansion
HANOI, VIETNAM — Vietnam’s information and communication technology (ICT) industry is undergoing a significant transformation, moving beyond its traditional role in assembly and outsourcing to develop high-value, branded products for the global market.
The Ministry of Information and Communications (MIC) estimates that the sector will generate $155 billion in revenue by the end of 2024, contributing over $2.2 billion to the state budget. This growth is fueled by a diverse ecosystem of over 27,600 ICT companies employing approximately 1.26 million people.
Shift in ICT focus
The ICT industry of Vietnam has entered a critical phase where local firms create $45.5 billion worth of value while contributing 31.8% to the overall sector revenue based on government statistics.
Software development, together with digital content development and IT service provision, represents the growing diversity in Vietnam’s ICT industry.
The country has experienced major changes in its economic focus since it became a budget manufacturing market.
The launch of “Make in Vietnam” as a national technological initiative has propelled the country’s domestic firms toward particle development, artificial intelligence solution design, and enterprise software development.
Nguyen Khac Lich, Director of the Department of ICT Industry, notes this increase in ICT innovation has enabled companies to tackle challenges and move into global markets. By shifting focus to domestic brands, they aim to increase output.
Evolving industry landscape
The substantial workforce present in hardware manufacturing, merged with an increasing number of software companies, reveals an industry-wide growth in digital solution needs.
The Ministry of Planning and Investment revealed 207 foreign investment projects for the ICT sector during 2023, with $2.82 billion of total capital, whereas the 2024 projection suggests that ICT sector revenue will surpass $155 billion.
The growing delivery of specialized services leads to expansion in export value. The revenue generated by 20 Vietnamese IT firms working in Japan rose significantly from 2020 to 2024, based on data from the Vietnam Software and IT Services Association (VINASA), to reach $1.345 billion per year.
The specialized services and international market expansion of the Vietnamese ICT market keep advancing toward becoming a respected international industry competitor.
Potential risks amid economic growth
Vietnam increased its export volume to the United States and achieved its economic growth by reassigning Chinese products to escape American trade tariffs.
As of 2024, one-fourth of Vietnam’s economic progress is because of its exports to the United States, with exports exploding to nearly 500% since the start of the trade wars.
The practice has drawn investments that employed people and brought revenue to the government through customs fees and port fees, but is now facing growing oversight. This procedure shows doubtful sustainability because it both eliminates and generates various difficulties.
The exceptional market expansion Vietnam has experienced from changing trade patterns exposes it to substantial hazards stemming from U.S. trade procedures and possible transshipment enforcement actions.
According to a YouTube explainer video by The Invisible Hand, a fresh round of tariffs threatens to destroy Vietnam’s export-based economy, which could start a recessionary period.
