In the previous series, Nhan Dan Newspaper has recorded the lessons of success and blood for Vietnamese digital technology enterprises when bringing intelligence and technology products to foreign markets. We had an interview with Dr. Nguyen Thanh Tuyen, continuing to share more in-depth experiences in approaching the market, the challenges facing enterprises and some solutions for Vietnamese enterprises to continue their journey to conquer the most demanding markets.
Reporter: The working group to bring Vietnamese digital technology products to the world, established by the Ministry of Information and Communications, has contributed to raising the brand of Vietnamese digital technology enterprises in the world with a series of practical action programs. Looking back on the journey of the past year, how do you evaluate what we have done?
Dr. Nguyen Thanh Tuyen: Before 2023, the Ministry of Information and Communications had a policy of supporting and helping Vietnamese digital technology enterprises to conquer the world. In early 2023, the Minister of Information and Communications established an Advisory Group to support digital technology enterprises to go abroad in the field of Information and Communications to drastically implement solutions to realize the above policy.
In 2023 and early 2024, the Ministry organized 7 delegations to bring businesses abroad to major markets such as the US, Japan, Singapore, Australia, New Zealand, Spain, connecting 60 Vietnamese businesses with more than 3,000 international businesses and organizations in the segments of BPO, ITO, semiconductors, self-driving cars, Fintech... organizing more than 100 business matching sessions of Vietnamese information technology businesses with foreign businesses.
The national pavilion displaying Vietnam's information technology products at ATxSG, Asia's largest technology exhibition held in Singapore in 2023 and 2024, attracted about 1,800 visitors and created sympathy from international partners and friends about Vietnam's digital technology products.
At the same time, the Ministry has also supported businesses to participate in international digital technology awards such as the ASEAN Digital Technology Awards (ADA) and the Asia-Pacific Information Technology Awards (APICTA). In 2024, Vietnamese businesses led the 10 ASEAN countries in the number of gold and silver medals at ADA 2024...
In addition to events held abroad, the Ministry also accompanies associations and businesses to organize many trade and investment promotion activities in Vietnam to open up opportunities for Vietnamese businesses to go out into the world such as Vietnam-UK business matching in March 2024; Hong Kong - a World of Opportunities in Innovation & Technology conference in March 2024; Conference to attract businesses to invest in Fukuoka city, Japan in June 2024...
The Ministry also organized a meeting between Vietnamese digital technology enterprises (mostly software enterprises) that want to promote the export of digital technology products abroad with Vietnam's trade counselors in 10 countries around the world including the US, Germany, France, Japan, Korea, Singapore, Laos, Cambodia, and Taiwan (China). The meeting contributed to supporting the connection of Vietnamese digital technology enterprises with Vietnam's key software export markets, promoting the expansion of business activities.
In the context of the domestic economy still facing difficulties and the world information technology market with many potentials and development opportunities, these activities have contributed to enhancing the position of Vietnamese products and enterprises in the eyes of international friends and helping enterprises more easily access the market.
Reporter: In many markets where Vietnamese enterprises have established customer bases such as the US, Europe, Japan, Southeast Asia, etc., in your opinion, which markets still have much untapped potential for Vietnamese IT enterprises?
Dr. Nguyen Thanh Tuyen: Currently, Vietnam's main markets are Northeast Asia (Japan, Korea), North America (USA, Canada). Potential markets include Europe and Southeast Asia. But in my opinion, Japan is a very potential market and attracts many Vietnamese digital technology businesses.
Japan is a huge IT market worth $455 billion. in 2023, expected to increase to 480 billion USD in 2028. However, according to information from the Japan Information Technology Association (JISA), Japan is seriously lacking in IT human resources, including software human resources, because the population is aging rapidly while young Japanese people do not want to study IT but only like to study fields such as psychology, sociology, etc.
Japan is thirsty for IT workers more than ever. Many Japanese organizations and businesses are increasingly dependent on foreign labor to survive.
Japanese businesses are also expecting the Japanese Government to take further steps to expand opportunities to welcome Vietnamese IT human resources to work in many fields with serious labor shortages, such as finance, banking, public administration, healthcare, retail, etc.
Recently, on June 5, 2024, the government of Fukuoka Prefecture, Japan's fourth largest economy, held a seminar to attract investment in Fukuoka with the hope of having many Vietnamese technology companies set foot here. In addition to Fukuoka, Kanagawa, a prefecture adjacent to Tokyo, also has the same desire.
The Governor of Kanagawa Prefecture, Mr. Yuji Kuroiwa, personally told me that he hopes more Vietnamese businesses will open branches or offices to help Yakohama City - the capital of Kanagawa, with digital transformation.
In addition to Japan, the thirst for Vietnamese digital technology human resources is also hot in powerful countries such as the United States, Singapore, Europe, the United Kingdom... especially with high technologies such as semiconductors and artificial intelligence.
Since the beginning of the year, many government and business delegations from the above countries have come to Hanoi and the Ministry of Information and Communications to discuss the possibility of strongly promoting cooperation.
On the morning of June 18, when visiting the Ministry of Information and Communications, Mr. Oxman, Chairman of the US Information Technology Council, said that the US wants Vietnam to become an important link in the global supply chain in the information technology sector.
Reporter: Stepping out into the open sea, Vietnamese businesses will have to compete with many “giants” in the world. In your opinion, where does the competitiveness of “Make in Vietnam” digital technology products lie?
Dr. Nguyen Thanh Tuyen: Vietnam is a reputable provider of offshore software outsourcing services for the global market, ranking 6th in the world and leading in Japan.
Vietnamese IT enterprises have developed to a higher level. Previously, when they first entered the foreign market, Vietnamese IT enterprises mainly provided human resources, solved problems/programmed on demand.
Nowadays, many Vietnamese enterprises have the ability to consult and provide complete IT solutions. To penetrate foreign markets, enterprises must have solutions and products. Enterprises must understand the business of customers and have their own core. In Japan, successful IT enterprises have built an ecosystem including members, a system of branches throughout Japan, a system of products, solutions, services and diverse and comprehensive fields.
Vietnamese business services are present in many fields of activity such as banking, finance, insurance, securities, logistics and transportation, manufacturing and automation, and technology human resource development.
Recently, Vietnamese technology enterprises have also expanded into new fields such as logistics, healthcare, telecommunications, energy, digital transformation, hotels, entertainment and e-commerce...
Vietnamese digital technology enterprises are also gradually accessing most of the key digital technologies such as 5G, IoT, artificial intelligence, robots, virtual reality, big data, and cloud computing.
In the two Asian Technology exhibitions in Singapore ATxSG in June 2023 and May 2024, Vietnamese enterprises introduced over 80 products based on new technology such as VinBrain's use of AI in cancer diagnosis, VNPT's information security solution for IoT, VNPT's smart home solution, Rang Dong's smart lights, TM's 5G network technology solution), HANET's smart camera, EVN's electronic meter, EVN's smart charging station, VTI's Flyer AI, NTQ's AI technology for object authentication and character simulation, Smartlog's supply chain solution, Sconnect's animation technology...
Some Vietnamese information technology enterprises, after being successful in a G7 country, have brought their successful products to other countries' markets under the name of G7 products and have achieved encouraging successes.
Reporter: Sir, how are we currently building a database on Vietnam's digital product export activities to the world?
Dr. Nguyen Thanh Tuyen: The Department of Information Technology and Communications Industry has built and maintained a database of digital technology enterprises, including data on revenue, exports, products, human resources, etc.
According to data from the database of digital technology enterprises, in 2023, the export revenue of software and information technology services of Vietnamese enterprises (excluding FDI enterprises) will reach approximately 9 billion USD (accounting for 6.3% of the total revenue of the entire information technology industry - 142 billion USD).
The number of Vietnamese digital technology enterprises participating in business in foreign markets is about more than 1,500 enterprises.
Some typical enterprises are Viettel, VNPT, FPT, CMC, TMA, NTQ Solution, Rikkei Soft, VMO Holdings, VNG, MOR Software, ...
Reporter: Besides the success of many businesses that have established their names in the international market, there are also many young businesses that are aiming to bring Vietnamese technology products to the world. In your opinion, what valuable lessons can young businesses learn today so that they do not “stumble” right from their first steps?
Dr. Nguyen Thanh Tuyen: I can take an example from the Japanese market. In May 2023, during the Vietnam Information Technology Week in Japan organized by VINASA, we had the opportunity to visit and work with a number of successful businesses in Japan such as FPT Japan, NTQ Japan, VMO Japan, Rikkeisoft….
The leaders of these businesses shared with us their secrets to success.
One is “Go to the headquarters in Tokyo and then spread throughout Japan” . In the past, when setting up offices in the provinces, it was very difficult to convince Japanese customers. NTQ Japan decided to move its headquarters from the remote Kanagawa province to the central Chiyoda district of Tokyo. The location of the headquarters in the “diamond” district has helped the company gain trust in the eyes of Japanese customers, making them confident enough to sign contracts.
Second, “Using Japanese people to approach the Japanese market”. Japan is a very demanding market . It takes foreigners decades to understand the language, culture, and business like the Japanese. Moreover, it is very difficult for foreigners to approach Japanese customers. Therefore, Vietnamese businesses often recruit Japanese people from other companies. Although paying Japanese employees is more expensive, they create trust for customers. In 2020, FPT Japan established FPT Consulting with the majority of employees being Japanese.
Third, go straight to the brain. In the past, Vietnamese businesses promoted by “spreading leaflets” by sending out documents everywhere. The result was often no response. Now, businesses choose and find ways to approach directly to the highest leaders of organizations and businesses that are potential customers.
Fourth, shifting from “Offshore” (using domestic resources - offshore - PV) to “NearShore” (using foreign resources - nearshore - PV) and “BestShore” (providing services most effectively to customers - PV). Previously, FPT Japan only opened offices in Japan, receiving work to transfer to Vietnam to perform in the “Offshore” way. Recently, when the Japanese Government issued a policy of only assigning work in Japan and not sending work abroad. To cope with this policy, FPT Japan has shifted from offices to branches located in Japanese cities, implementing the “Near Shore” approach instead of “Offshore”.
In 2017, FPT Japan established its first “Nearshore” center, FPT Okinawa & R&D Joint Stock Company, which was later renamed FPT NearsShore and opened additional branches in Fukuoka and Hokkaido. To date, FPT Japan has established a network of 16 branches across Japan and is about to open its 17th branch.
Reporter: Vietnam has many businesses that have established positions in some major markets around the world, but many have failed. In your opinion, what challenges are our IT businesses facing when bringing digital technology products to the world?
Dr. Nguyen Thanh Tuyen: There are many challenges for Vietnamese enterprises. In my opinion, first of all, not many outsiders, many foreign organizations and enterprises know about Vietnamese digital technology. Information technology is an industry with large revenue, many exports, high marginal profit value, and is an economic sector with great profit potential in Vietnam. However, the State's support for information technology enterprises is still very modest.
Compared to an industry that has received a lot of state support in recent years, food production, in 2023, Vietnam exported more than 8 million tons of rice with a revenue of 4.7 billion USD, a marginal profit of 30 million USD (about 0.6% of revenue). Also in 2023, the export value of software and information technology services in Vietnam is estimated to reach 9 billion USD, twice that of rice exports. It is worth noting that the added value of software exports is many times higher than that of rice exports, reaching approximately 80%.
However, each year the state only allocates a very small amount of funding to support businesses in promoting trade (about 2.5 billion VND/year) through the Trade Promotion Program of the Ministry of Industry and Trade.
Despite great efforts, due to limited funding, the Make in Vietnam booth at the ATxSG 2024 exhibition is quite modest compared to the booths of other countries, especially our digital technology competitors such as Singapore, China, Korea...
Our product portfolio is still modest. Apart from the software and IT services sector which is our strength, Vietnamese hardware products have almost no presence in the international market apart from products manufactured by FDI enterprises in Vietnam.
Another issue of concern is human resources in information technology. For technology enterprises, the key factor is human resources, especially human resources from the university training system. Although Vietnam has nearly 170 universities that provide information technology training, the training quality is uneven, with only about 30% of graduates meeting market requirements. Our human resources are still weak in foreign languages, soft skills, especially skills in working in a professional environment.
Finally, we do not yet have an ecosystem of digital technology businesses to accompany us abroad.
Reporter: You just mentioned the need for a Vietnamese business ecosystem to accompany us to the world. How do you think this solution should be implemented?
Dr. Nguyen Thanh Tuyen: Building a Vietnamese business ecosystem to catch Whales abroad is very important. Accordingly, to win large IT projects (Whale Projects), Vietnamese IT enterprises need to build a strong ecosystem including domestic enterprises and enterprises operating abroad. While domestic IT enterprises in Vietnam have strengths in new technology, new products but poor sales capacity, enterprises operating abroad have stronger sales teams and stronger networks. If the two sides can combine their strengths to exploit the market in that country and thereby improve their ability to penetrate the global market.
Equally important is the need for media support to raise awareness and provide information to Vietnamese businesses about potential foreign markets, so that businesses dare to go fishing.
Support Vietnamese IT enterprises to organize more trade promotion activities, business matching, organize exhibitions, fairs or participate in international exhibitions and fairs to promote Vietnamese enterprises and Vietnamese digital technology products.
Information technology training institutions (universities, vocational training) need to further improve the quality of information technology training to meet the requirements of foreign markets, focusing on new technologies, foreign languages such as English, Japanese, Chinese and soft skills.
Along with “Made in Vietnam”, businesses need to build “Made by Vietnam” products and services to serve the global market. In order for Vietnamese digital technology businesses to go global, from the strategy of “Go Global from Japan” of FPT Japan or “Made by NTQ” of NTQ Japan, it can be seen that in order for Vietnamese digital technology products, services and solutions to be easily accepted by world customers, we should not only limit ourselves to products, services and solutions made in Vietnam (Made in Vietnam) but also encourage all products, services and solutions created by Vietnamese businesses, whether the business is located in Vietnam or another country, as long as it is owned by Vietnamese people.
Vietnam needs a global marketing strategy for Vietnamese IT enterprises “Made by Vietnam” to promote, strengthen support, and accompany Vietnamese IT enterprises to go abroad. Accordingly, any product, solution, or service, as long as it is owned by a Vietnamese enterprise, regardless of whether the enterprise operates in any country such as Japan, China, or the US, is encouraged to develop.
Reporter: Going abroad is a difficult but glorious task. How will the task force to bring Vietnamese digital technology products to the world continue to support Vietnamese digital technology enterprises to reach foreign markets, sir?
Dr. Nguyen Thanh Tuyen: Recognizing that there is still much work to be done, the Ministry of Information and Communications will soon deploy many solutions to support Vietnamese digital technology enterprises to reach out to foreign markets.
We will continue to work with relevant units of the Ministry of Foreign Affairs and the Ministry of Industry and Trade to establish channels and focal points to support businesses in foreign markets (especially focusing on countries such as the US, Europe, Japan, Korea, etc.).
In addition, we increase surveys on the needs and capabilities of Vietnamese enterprises participating in foreign markets; Build a database of Vietnamese enterprises working in foreign markets to build a business ecosystem that supports and helps each other when participating in foreign markets.
Coordinate with the Ministry of Foreign Affairs, the Ministry of Industry and Trade, the Vietnam Federation of Commerce and Industry and successful enterprises in foreign markets to research and collect market information on foreign information technology markets to serve as a basis for Vietnamese enterprises to refer to and develop business plans.
Continuing the success of the past year, we will continue to coordinate with relevant agencies to organize delegations to support trade and investment promotion for businesses: Participate in fairs, exhibitions, and seminars related to introducing and promoting information technology and communication products.
Organizing communication and promoting the brand and capacity of Vietnamese enterprises is also especially important to further elevate the brand of Vietnamese information technology enterprises to the world.
Reporter: Thank you Dr. Nguyen Thanh Tuyen!
Source: https://special.nhandan.vn/ra-khoi-bat-ca/index.html
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