Vietnam sets ambitious target for IT development

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Viet Nam targets to have 10 localities with revenue of more than US$1 billion each from information and technology (IT) by the year 2025.

The target was set at a conference to review IT development programme in 2015-20 in the southern region held in Tien Giang Province early this week.

Phan Tam, deputy minister of Information and Communications, said the IT, electronics and telecom sector has seen rapid development with extremely important achievements in the past five years.

Viet Nam’s revenue from IT, electronics and telecommunication in 2019 reached $112.5 billion, double that of 2015. The sector’s growth rate in 2015-19 period was more than 26 per cent, four times higher than GDP, contributing VND53 trillion ($2.1 billion) to the State budget last year. It creates jobs for more than one million people.

Tam said in 2009-19, the average revenue growth rate of the software industry reached 17.7 per cent a year. In 2019, the software revenue was $5 billion.

However, the sector has also seen shortcomings as it has depended on FDI firms. Revenue of FDI companies in the IT sector accounted for up to 98 per cent of the total export revenue.

Despite the large number of domestic enterprises, 99 per cent are small and micro enterprises. Their competitiveness and ability to participate in the global value chain are still very limited, mainly entrusted with services and assembly work. Domestic enterprises only contribute about 10 per cent of the industry’s total revenue, he added.

(Photo: Custom News)

The ministry has been rushing to build a draft decision to approve the IT development programme by 2025 with a vision to 2030.

Nguyen Thanh Tuyen, deputy head of the ministry’s Information and Technology Department, said the IT development programme aimed to make Viet Nam’s IT industry a big economic sector with a rapid and sustainable growth rate based on achievements of the Fourth Industrial Revolution. The sector would provide momentum for the country’s digitalisation and digital economy.

Accordingly, the revenue growth of the sector would be double the country’s GDP growth, taking the lead among industries with high export value.

Under the programme, the country would have 50,000 IT and telecom firms. Of which, 10 big businesses would act as leaders with revenue scale of over $1 billion and having ability to compete internationally.

Local businesses must master the software and IT services, providing 90 per cent of products and solutions for e-government construction, digital transformation, transport and smart agriculture.

In the hardware sector, domestic IT firms should produce equipment for 5G networks while the foreign direct investment companies must have a localisation rate of 30 per cent.

The programme also plans to have 60 per cent of Vietnamese people using social networks developed by local providers by 2025, gradually reducing dependency on foreign ones. Meanwhile, 40 per cent of Vietnamese people would use domestically-made search tools.

Viet Nam now has three big IT areas in HCM City, Ha Noi and Da Nang. Another software park is under construction in Ha Noi’s Long Bien District.

The draft programme is expected to be submitted to the Prime Minister in the second half of the year.

Tran Van Dung, vice chairman of Tien Giang Province People’s Committee, said they are planning to build the Mekong software park. It is expected to attract human resource for IT sector of the province in particular and the Cuu Long (Mekong) Delta region in general.

IT products, especially mobile phones and computers took the first and third places among top 10 key export staples of Viet Nam in 2019 with trade surplus of $28 billion.

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