Why Vietnam Is The #1 Destination For Offshore Software Development (2021 updated)

When people think of Vietnam, they’re often met with the visual of bustling cities, idyllic mountain landscapes and sun drenched beaches. Or, perhaps, reminded of the nations war-torn history.

Very rarely do they see the country for what it has become: a thriving technology hub and Vietnam Is The #1 Destination For Offshore Software Development.

Vietnam is an incredible choice for intelligent businesses looking for offshore software development, because Vietnamese developers are some of the brightest and most ambitious technologists in the world. 

Forbes calls Vietnam a “small but mighty powerhouse” with “a highly adaptive approach to work and tech”, and its firm success as a newly-introduced member of the World Trade Organisation only serves to echo this sentiment. 

From education to culture to government, here’s why Vietnam should always be the first choice for your offshore software development.

Vietnam outperforms the eastern and western worlds

The Vietnamese are intelligent and highly learned, with a 96.8% literacy rate among working-aged adults. 

In the 2015 OECD Program for International Student Assessment, which measures performance in maths, science and reading among 15-year-old students, Vietnam ranked 8th.

To put this into a global context (72 world economies, in fact), that placed Vietnamese schoolkids higher than not only their counterparts in Hong Kong, China and South Korea – but also Australia (14th), the UK (15th) and the USA (25th). 

With 65% of the 97 million strong population under 35 years of age, it’s no surprise that the Vietnamese are switched on and ambitious, particularly when it comes to technology. 

When Google engineer Neil Fraser visited on a fact-finding trip to review Vietnam’s high-school computer science education methods, he found that half of Vietnam’s 16-year-olds would pass Google’s interview process, and kids as young as 10 were as technologically capable as those in the 11th grade back in his homeland.

A government that champions technology readiness

The Vietnamese government has recognised the potential to be seen as a global software development leader – looking well beyond the “workshop of the world” capability and instead, building strong foundations for technology success.

As a stable, one-party dominion, they are committed to providing high-quality STEM education to their population, encouraging English as a mandated second language, opening “technoparks” across the country and building world-class university infrastructure that focus on the sciences in all major cities.

With a pronounced skills shortage plaguing businesses all over the developed world, the Vietnamese government’s focus on ensuring all students start learning coding and logic from the age of 10 is a strategy that is beginning to pay serious dividends for both the countries population and the businesses who have identified the opportunities they represent.

Vietnam’s laser-focus on technology

With technology mandated to be a primary pillar of Vietnam’s economy (seeing as over 250 higher learning institutions teach I.T.), it’s no surprise that over 40,000 Vietnamese software professionals are graduating and entering the workforce each year.

This represents an annual ~20% increase on an already established software industry that exported $3.5B USD worth of software in 2018, and 7.1% overall GDP growth in the same timeframe. In short, Vietnam isn’t just a tech country, but a tech epicentre. 

By 2050, it’s projected that Vietnam will be among the top 20 economies in the world. 

It makes sense to get on board with their progress at a time where the rewards are abundant and highly cost-effective. 

By partnering with a high-quality offshoring operator leveraging Vietnam’s tech excellence, there aren’t just opportunities for direct access to “a growing population of entrepreneurs, engineers and technology experts” but also everything that comes with improved productivity and scalable skill implementation – happier teams, happier customers, better products and better companies.

Vietnam’s continuous effort to protect intellectual property (update 2021)

Having signed a landmark trade agreement with the E.U last year, Vietnam has increased its ranking in the International IP Index 2021. The country's score rose from 36.62 percent (18.31) last year to 37.49 percent this year, according to the intellectual property (IP) index published by the US Chamber of Commerce Global Innovation Policy Center (GIPC) (18.74). Vietnam has jumped up a notch to 41st position in the International IP Index 2021. 

In recent years, information technology has become one of the key economic sectors in Vietnam and the government has been investing a great deal in education to stimulate the growth of the sector, specifically Stem (science, technology, engineering, math’s) education. Vietnam has been praised for making great efforts to align its IP Laws with EU FTA and CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) in compliance with existing agreements. “Strengthen the protection of copyright online as well as improve the technological protection measure and digital rights management environment.”, according to the drafted IP Law. This has increased the confidence of businesses choosing Vietnam as an outsource destination as the laws and government of Vietnam fully protects businesses intellectual property rights. 

Ranking number #1 on the WIPO Global Innovation Index among other popular outsourcing destinations (update 2021)

Vietnam holds the 1st place for innovation from WIPO. As well as topping the innovation table of lower-middle-income group, which includes most other popular outsourcing destinations, Vietnam also holds the record of being innovation achievers for 10 consecutive years in the “GII Bubble Chart”. Clearly demonstrating Vietnam's strengths and differentiation when compared with other strong software development destinations. 

Vietnam’s incredible performance throughout COVID-19 pandemic (update 2021) 

When COVID-19 struck in early 2020, Vietnam surprised the world with its almost unparalleled success in managing the pandemic. According to The Lowy Institute, in the COVID Performance Index ranking nearly 100 countries, Vietnam ranks alongside New Zealand and Taiwan as the global top three countries for effective management and mitigation of the COVID-19 pandemic. 

The Vietnamese government and the citizens have made an amazing effort to contain the pandemic through targeted testing and a centralized quarantine program. Although it remains present in Vietnam, to the situation has not gotten out of control at any point and Vietnamese citizens daily life has largely remained unaffected. Economically Vietnam was ranked number 1 out of all the Asian countries in 2020 achieving GDP growth of 2.9%, one of only 3 Asian countries who’s GDP did not contract.   

VIETNAM HAS BEEN MAKING AMAZING EFFORTS TO ENSURE ONGOING CUSTOMER SUPPORT THROUGHOUT THE PANDEMIC

Summary 

According to Global Software Outsourcing Reports, Vietnam is in the top 5 best software outsource destination. As IT outsourcing is becoming a common choice of worldwide tech firms, Vietnam can be one of the go-to destinations with the effective cost while mitigating the risk of complicated cyber attacks. This is our updated article for 2021 since there have been many global changes.  

If you want to learn more about the nuances of software development, give us a call. We’re always happy to advise and contribute to your decision-making process.