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Vietnam, Open for Business.
The people of Vietnam will soon celebrate the 30th anniversary
of the end to the Vietnam War (in Vietnam, the war is referred to
as the American War). Things have changed here in the last 30 years.
Vietnam today is a country the size of Italy with a population the
size of Germany -- and has one of the most enviable economic growth
rates in the world. Interestingly, over 60% of the population is
under the age of 30, which means that most of the people living
in Vietnam today are too young to remember the fighting. With the
characteristic energy of youth, this young nation is pushing hard
to build a future where Vietnam is a global competitor-and America
is a top trading partner. One area in particular is in providing
outsourcing services to American businesses looking for faster,
better, cheaper ways to make their products.
Hanoi is a bustling city of 3.5 million, where the mixture of old
and new is in constant evolution. One of the first sights to strike
the first time traveler here is the amount of rubble piled in seeming
random patterns around stacks of new brick -- the amount of new
growth construction can only be described as astounding. New streets,
new office complexes and new homes are going up everywhere one looks
in this key industrial and government center. Vietnamese tend to
invest in land because of an old wariness of banks, driving up land
prices and fueling a building boom.
Partnering with industry, the Vietnamese government is making a
big push to expand their economy out of deep impoverishment at the
end of the American/Vietnam war; encouraging significant investments
in education, transportation, housing, and technology. Over the
last several years, significant reforms, including a wide-ranging
trade agreement with the US and the promise of World Trade Organization
membership in 2006, have caught the attention of foreign investments,
now exceeding $30 billion. The partnerships with industry provide
important impetus to this thrust. Industrial growth has been constant
at 15% annually for many years, and similar examples of extraordinary
growth can be found in telecommunications and road systems. Wireless
Internet cafes are popping up everywhere and everyone has a mobile
phone, not unexpected in a society of thirty-somethings.
The Vietnamese are determined to challenge their much larger, older,
and better financed competitors (India and China). Economic growth
has averaged 7-8% annually for the past 8 years, earning good profits
for an increasing number of private and public Vietnamese firms.
Considering the state that the country was in following the war,
Vietnam's emergent growth can only be considered spectacular. Perhaps
the best thing fueling their growth is the capitalistic attitude
of the people.
As with many emerging economies, Vietnam will leap-frog the telecommunications
and computing infrastructure of 30 years ago-jumping directly into
advanced fiber optic cabling and wireless capabilities. And, many
of the globally largest corporations have taken notice of the investment.
For example, Nike, has produced apparel and footwear products in
Vietnam for many years. More and more high-technology production
is moving to Vietnam. Several multi-national companies such as IBM,
Hewlett-Packard, Intel, and Infosys have well established contracts
manufacturing computers, printers, and components. These companies
are in Vietnam because of the quality of the products produced here.
One might ask how this is possible under a communist government.
Well, although the government is led by the Communist Party, the
government has provided tax incentives, much like non-communist
governments do, to encourage development of technology based companies
and workers. Examples of free enterprise abound, and are sanctioned
and actively encouraged by this government. Of course, to make money,
takes money, and the Vietnamese government has shrewdly bolstered
the financial infrastructure. For example, investment licenses can
be applied for over the Internet, with approvals received sometimes
within eight hours. The government is much more proactive now than
it was 10 years ago.
Another key attribute fueling Vietnam's growth, is its multiple
language fluency. As is common in much of Asia, many Vietnamese
speak multiple languages fluently, and English is often a second
(or third) language of choice; making it mildly easy for a non-Vietnamese
speaking American to make himself understood. And these are just
a few of the clear signs that Vietnamese society is becoming more
educated, more technically capable, and more globally competitive.
About the author
Ed Carroll is a sales executive with ProDx, a Beaverton-based technology
services company with offices in Seattle and Hanoi. ProDX is a business
unit of Hepieric, Inc. Ed can be reached at EdCarroll@prodx.com.
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