Why Vietnam?

General Information

  • Young and well-educated population
  • 60% of 86M population under 30
  • Literacy rate more than 90%
  • Good talent pool
  • 30,000 IT university graduates a year
  • Supply will continue to exceed demand for many years
  • Competitive costs
  • Low attrition
  • One of the most stable and secure countries
  • Vietnam emerging as a high technology center, e.g. Intel, IBM investments
  • Strong government support for the software industry
  • Software outsourcing grew 50% per year for the last 5 years.

Vietnam Opportunity

The IT industry has experienced rapid growth in Vietnam, especially around the Hanoi and Ho Chi Minh financial hubs, with more than 15 industrial parks and export-processing zones in addition to the estasblished Quang Trung Software Park and Saigon High-Tech Park.

Cost: Labor costs in Vietnam compare very favorably to other potential outsourcing destinations. For example, Vietnam's average salaries are approximately 50% and 60% less expensive for both IT outsourcing (ITO) and business process outsourcing (BPO) than India's and China's respectively. Vietnam's average labor costs are also 80% less expensive than labor costs in the United States.

Workforce Suitability: Vietnam has a well educated and technically savvy population. According to the Vietnam Economic Times, 96% of Vietnam's population are literate. In addition, 80% of the students from Vietnamese colleges and universities graduate with science degrees making Vietnam a particularly good destination for technology outsourcing.
The educational attainment levels of Vietnam's workforce are further supported by Government policies that place a strong emphasis on the importance of education, particularly in science and IT degrees, as well as a cultural emphasis on education and receptiveness to training. As of 2004, there were over 200 colleges and universities in Vietnam, an increase of 60% during the six-year period, from 1999 through 2005 (source: Vietnam Economic Times).

The Vietnamese workforce also enjoys more stability than is typical in other outsourcing destinations. Vietnamese businesses experience less than 5% turnover for IT-related positions. This compares very favorably to other outsourcing countries such as India where churn is over 15%, and in some cases well over 30%.

Stability: From a political standpoint, Vietnam has enjoyed over thirty years of political stability. Vietnam also has not experienced any major conflicts or tensions with its neighbors in almost thirty years (since 1978).

From an economic standpoint, Vietnam has a strong and robust economy. Vietnam's gross domestic product (GDP) growth has averaged 7.4% over the past six years (up through 2005, source CEIC). Vietnam's GDP growth is the second fastest in Asia (see: Vietnam's Roaring Economy Is Set for World Stage in the New York Times). In 2005, foreign direct investment (FDI) in Vietnam was estimated to have reached nearly $5 billion (US dollars). This economic growth and investment compares favorably with other outsourcing destinations.
Vietnam is also relatively unique due to the absence of ethnic and religious conflict. Almost 95% of the country is ethnic Vietnamese and over 80% of the population has no declared religion. Largely because of this, Vietnam has none of the social and religious conflicts that arise in other outsourcing destinations.

Business and Intellectual Property Policy: Vietnam has embarked upon business-friendly policies and laws to attract foreign investment. Vietnam is also a member of the World Trade Organization (WTO), and is very serious in its efforts to protect intellectual properties.

English Proficiency: English is the most popular second language in Vietnam. Most graduates from Vietnamese colleges and universities are fluent in English. All of this serves to make Vietnam's technology professionals surprisingly competent communicating in English.
When compared to other offshore outsourcing destinations, Vietnam offers many business advantages which are summarized in the following matrix.

Metric Advantage
  • Lower than most other outsourcing destinations
  • 96% literacy rate
  • Heavy emphasis on science degrees


  • 30+ years of the same government
  • Almost 30 years of no conflict with neighboring countries


  • Strong GDP growth
  • Strong foreign investment

Ethnic and Religious Conflict

  • Nonexistent
Government Policies
  • Pro-business
  • Good and constantly improving intellectual property protections and enforcement
English Proficiency
  • Vietnamese language uses roman alphabets and characters
  • English is the most popular second language in Vietnam
  • Most graduates from Vietnamese colleges and universities are fluent in English