Electronic and Information Technology in Vietnam

Preconditions for expansion

Given the time available for our work in Vietnamese industry, we do not have enough specific knowledge of the necessary skills and resources in Vietnam in order to recommend a coherent strategy for the coming software industry development.

To develop a strategy for a Vietnamese software industry it will be necessary to consider the various characteristics of the different software markets listed above. Probably, there will be separate industry policy approaches to each of these six or more markets.

The strengths and weaknesses of the software services offered in today's Vietnam should be analyzed in detail while a government policy is being formulated. To us, it is still unclear if the software services currently avail- able on the Vietnamese market could be used as a basis for advanced software development.

Any further policy deliberations will have to consider how a Vietnamese software industry will be able to overcome the following obstacles. (1)

A weak institutional support-structure: he software industry n Vietnam' cannot expand because of inadequate legislation to protect intellectual property. It will not be enough to formally establish a property-rights regime in Vietnam; it will have to be enforced as well.
Small domestic market: The current levels of demand for all kinds of computer applications are not high enough to stimulate the creation of a large domestic software industry. However, the Vietnamese market is now growing faster than ever.
Low levels of experience and a limited amount of expertise: The development of a software industry in Vietnam is hampered by the considerable lack of experience and low numbers of programmers, systems analysts, and project managers available in the country. Cf. Chapter 10 above.
Lack of development tools and weaknesses in methodology: There is a general lack of standardized design and verification tools in Vietnam, which makes it difficult to accumulate (and diffuse) experiences from different projects. Similarly, the ability to re-use software components from existing applications is still underdeveloped. Due to limited experience with large scale software development projects, computer specialists in Vietnam tend to follow non-standardized approaches to design and implementation of new programs; and often, for the same reason, there are difficulties in specifying performance requirements before detailed design and coding begin.
No marketing tools and after-sales services: The Vietnamese software industry has to build relatively advanced marketing competence and after-sales facilities, particularly since it is entering the global market as a newcomer. Initially, this lack could be compensated for if local firms act as subcontractors for internationally operating firms. The software markets are dominated by companies with effective organizations for world-wide marketing, distribution, and back-up service.
Language difficulties: Competence in the English language will have to be improved to match the requirements in the IT industries (e.g. for reading manuals, and communicating with foreign vendors and customers). More and more, English is the dominant language in this industry.

We support the movement to 'open systems' that facilitates inter-connections and networking between computers and communication equipment of different brands. We believe that it is excellent that the government in its 1993 national IT program strongly underlines the 'open systems' concept to information interchange both generally and for specific projects: A "computer system must follow certain standards (both the hardware and software) so that it can be integrated into the National Network and be compatible with international networks."

Such measures might actually provide important stimuli to a Vietnamese software industry -- indirectly by increasing the general qualities of software development and directly by linking local software development with systems software and application programs developed internationally.

There are at least three trends in the global IT industry that could make it difficult for a Vietnamese software company to enter the international market without becoming a sub-contractor or partner to a foreign software developer.

First, more and more advanced standard-package software is being developed and delivered along with computer and communications hardware. Products from local software developers will have to compete with packaged software that is becoming available for more and more specialized applications. The market dominance of a few operating systems (most notably Microsoft Windows) and the decline of closed, proprietary systems (such as Digital Equipment's VAX system) has made it possible to for software companies to sell packaged software that is compatible with a large number of installed systems.

Secondly, during the past few years, automation of coding and testing of software is being introduced world-wide. It will probably be easier, with a steadily decreasing number of personnel, to develop relatively large computer applications programs using standardized programming method- ology (including CASE tools). This trend might raise the entry barriers for newcomers in the international software industry and cause less resourceful companies to leave the international market.

Thirdly, it is not obvious that software development, production, and service for the international marketplace will generate much new employ- ment in Vietnam. With a decline in mainframe computing and an expansion of small, inexpensive but powerful personal computers running standardized programs, small, specialized software companies will find it difficult to generate new job opportunities. Improved programming skills among the end-users may also offset an expansion of software services.

Foot Notes:

Cf. a similar analysis in UNISYS, A strategic review of national information technology development, Vol 2, Hanoi, 1993, p. 27 etc.

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Last update: May 8th, 1995