Export of software, digital content doubled after 5 years
The project "Development of exports in the city (city) to 2025, orientation to 2030" has just been approved by the People's Committee of Ho Chi Minh City. The goal is that by 2025, the city's export turnover will reach 70 billion USD and by 2030 reach 108 billion USD, 2.5 times higher than the turnover of 40 billion USD in 2020. Notably, in the proposal. In this project, leaders of Ho Chi Minh City emphasized the export activities of software products and digital content. In the past year 2020, the export turnover of software products and digital content of Ho Chi Minh City was estimated at 5 billion USD. With the minimum average growth rate of this industry group of 15% per year, it is forecasted that by 2025, export turnover will increase to 10.1 billion USD and by 2030 can reach 20.3 billion USD. The project clearly states that the nature of the software industry - digital content in Ho Chi Minh City is also outsourcing. However, the added value of this industry group amounts to about 65% of the export value.
The export value of this product group of Vietnam currently accounts for less than 1% of the world market size (the total value of Vietnam's software outsourcing in 2015 was about 2.5 billion USD - according to AT Kearney). Vietnam is still the country with the lowest software outsourcing labor costs in the world, ranging from 18-25 USD/hour depending on location (compared to developing countries in Asia, 18-25 USD/hour depending on location). - 40 USD/hour, Latin America is 30 - 50 USD/hour, Africa is 20 - 40 USD/hour - as assessed by Global Software Outsourcing Rates). The project emphasizes: Developing and exporting software and digital content products will be a potential market for Vietnam in general and especially Ho Chi Minh City in particular because the market size of this industry is very large.
Ho Chi Minh City aims to export more than 100 billion USD
Source: Project “Development of exports in Ho Chi Minh City until 2025, orientation to 2030”
GRAPHIC: WINTER SPRING
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Towards high-tech export
According to Dr. Tran Du Lich, a member of the Government, former Director of the Institute of Economics of Ho Chi Minh City, the orientation to promote the export of software and digital content is correct because it will be the leading strength in the world's digital industry. Moreover, intangible products will have much higher strengths and growth rates than tangible products. Most importantly, Ho Chi Minh City must do how to create an attractive enough ecosystem to encourage and attract businesses (DN) to promote creativity in the field of technology, create products. high added value. Ho Chi Minh City already has a Hi-Tech Park and Quang Trung Software Park, but recently, it has not been promoted, so it has not been able to bring into full play its advantages to encourage all sectors of domestic and foreign enterprises to promote innovation. creation. That will also be the biggest challenge of Ho Chi Minh City to achieve the above goal.
In 2020, Ho Chi Minh City's exports are estimated at 44.5 billion USD.
Analysis of growing industry groups shows that mechanical and electronics have the fastest and highest growth rates (22.5%/year), and are also industries with relatively high technology content but high dependence on technology. into foreign-invested enterprises, the localization rate is low, mainly processing and assembling with components imported from abroad.
The remaining industry groups with relatively high growth rates are the traditional industries of Vietnam, which are labor-intensive, including textiles and garments (5.27%/year) and leather and footwear (9.82%/year) )…
Do Hoa, a strategic consultant, said that the development of information technology and high technology is the right direction according to the general development trend. But currently, Ho Chi Minh City has not proved to have many advantages in the field of software or digital services. Therefore, it should not only be encapsulated in software or digital content, but also encourage the development and export of high technology. These are research and development in biotechnology, automation, robotics, IoT systems, artificial intelligence in healthcare, agriculture, etc.
“Ho Chi Minh City first of all needs to have a policy to encourage all economic sectors to participate and build their own resources, promoting the wisdom of the young generation. For example, open specialized training courses at universities. Human resources for this field require high expertise, so support policies must be prioritized. After that, it is necessary to prepare the related infrastructure ... then go to promote, invite both domestic and foreign enterprises to join to create high-tech products bearing the mark of Ho Chi Minh City. From there, it will promote the export of this product group to grow stronger," emphasized Mr. Do Hoa
Promoting service exports
In addition to promoting the export of software and digital content, Ho Chi Minh City also sets a goal to promote the export of services such as logistics, tourism, finance - banking. Because these are the new driving force for export growth in the long term. At the same time, the city will shift traditional labor-intensive industries to the periphery, including: textiles, apparel, footwear, food processing, rubber, chemicals; at the same time combine with accelerating automation application to gradually replace the role of unskilled workers. To do this, the city will promote investment attraction and develop service export industries (finance, banking, logistics). In particular, the formation of a financial center that can meet the needs of domestic, regional and international transactions is also fully compatible with the development orientation of an export service center in Ho Chi Minh City.
Dr. Do Thien Anh Tuan, lecturer at Fulbright University, analyzed: The economic structure of the city has shifted towards services and high value-added product groups. The promotion of software or information technology exports is generally appropriate and the city has advantages such as a team of qualified and qualified personnel, but the cost is still lower than the world average. Or the formation of the financial center of Ho Chi Minh City is also a direction to promote service exports. The city may not be able to compete with financial centers such as Singapore and Hong Kong, but it is possible to think of exporting this service to Laos and Cambodia markets. As for the traditional export industries such as processing and manufacturing, textiles, footwear, etc., they must gradually be moved to neighboring provinces because it is no longer the advantage of Ho Chi Minh City. But the most important thing is how to promote the project to achieve its goals.
The city only focuses on exporting intangible products such as information technology, software and services.
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Dr. Do Thien Anh Tuan
According to Mr. Do Thien Anh Tuan, there are many solutions that are not new but have not been implemented well in the past time. Therefore, the city needs to have determination to build incentive mechanisms for taxes, land, and access to cheap capital so that businesses can promote creativity and participate more in technology activities in general. But this field is associated with high-quality human resources. Therefore, Ho Chi Minh City must place specific orders with universities to promote human resource training activities that are competitive with the region. It is possible to give criteria such as the percentage of how many graduates pass the required competency tests, then the city will support businesses with financial mechanisms and incentives. At the same time, it is necessary to study a specific mechanism for the field of information technology, software and export technology products with high added value to encourage domestic enterprises to participate more.
“The city only focuses on exporting intangible products such as information technology, software and services, hoping to make a breakthrough in the near future. There are things that need to set a long-term benefit. For example, the relocation of seaports and traditional industries to neighboring provinces is also an activity to free up space and policies to focus on developing service industries and intangible products with high added value. more", emphasized Dr. Do Thien Anh Tuan.
References as Thanhnien