Tuesday, February 06, 2007

Outsourcing Vietnam

Sources: Vietnam's Growing Role in Outsourcing, Vietname Examines Outsourcing Attraction

Vietnam is becoming one of the main contenders in the far east for outsourcing IT contracts. India has been a large source of skillful IT workers for international IT companies, but other emerging countries, such as Vietnam and Pakistan, are giving India a run for its money. Vietnam has been working on developing its human resources via education and training in the new technologies in order to attract outsourcing projects. For instance, the country looks to develop its services to take advantage of the growing demand for IT engineers to patch mistakes in software packages. These opportunities to attract outsourcing work as international IT businesses start looking beyond India to fulfill their outsourcing needs would contribute to Vietnam's economic growth and development.
For example, Microsoft has already formed a solid outsourcing relationship with a digital design company in Ho Chi Minh City called Glass Egg Digital. Glass Egg works on digital designs for Microsoft's video gaming department, and has already attracted other big customers such as Sony Computer Entertainment Europe and Atari. Its revenues have grown 50% in the past two years. Other big IT companies have also turned their sights towards Vietnam for big plans. For instance, Intel plans to construct a $1 billion chip testing and assembly plant there.
However, some have noted that there are some drawbacks to outsourcing to Vietnam. One is the obvious lack of fluent English speakers. Another is the lagging developments in the country's own technology, such as the lack of a fiber-optic broadband network which translates into slow internet connections. Yet another disadvantage is the difficulty in changing currently-held portrayals of Vietnam to one that is equated with technology, just as India has successfully done. Nonetheless, international IT companies balance these drawbacks against other big advantages such as low wages. In Vietnam, programmers earn only about one tenth of what a programmer in the United States would earn.


Questions:
1) What can Vietnam do to better compete with the likes of China, India, and Korea in the area of technology outsourcing?
2) What are some of the policy concerns about outsourcing work abroad in order to take advantage of cheaper labor?
3) What role does globalization play in this scenario?

1 comment:

amy said...

I believe Philippines is a better destination if you want to outsource your business