Vietnamese software rises in global value chain

In just one year, FPT Software – Viet Nam’s top technology enterprise – recorded spectacular growth in the US market, with revenue surging from the 1 billion USD mark in 2023 to 1.7 billion USD by the end of 2024. With more than ten offices across the US and a host of service contracts for Fortune 500 corporations, FPT has become not only a symbol of success for the country’s software export industry, but also clear evidence of Vietnamese tech firms’ global competitiveness.

Rapid growth and competitive advantages

FPT Software’s breakthrough reflects the positive growth trend across the entire sector. According to Nguyen Thi Thu Giang, Vice Chair and Secretary-General of the Viet Nam Software and IT Services Association (VINASA), in 2024, Viet Nam’s information technology industry recorded total revenue of around 152 billion USD, up 7% from 2023. Of this, domestic software revenue reached 13 billion USD, while software exports were estimated at 7 billion USD – underscoring the growing capability of Vietnamese companies in the global market.

In terms of markets, Vietnamese technology firms are focusing on exporting software and services to traditional destinations such as the US, Japan and Europe, while expanding into fast-growing markets such as the Republic of Korea, Hong Kong and Taiwan (China). For companies providing technology solutions rather than outsourcing services, ASEAN nations such as Singapore and Indonesia are emerging as promising destinations. Additionally, new markets such as China and the Middle East are being studied and gradually approached, given their strong growth potential over the next two to three years.

According to Giang, one of Viet Nam’s greatest strengths lies in its large, young and well-qualified workforce. Each year, over 50,000 students enrol in information technology courses, trained by more than 150 universities and 250 vocational institutions. This provides a foundation for maintaining Viet Nam’s cost advantage while gradually moving into higher-value segments of the global technology services supply chain.

Favourable external conditions also add momentum, with global information technology (IT) spending expected to grow by 7–9% annually in the coming years. Meanwhile, developed countries are facing acute shortages of digital talent – a major opportunity for Viet Nam, a nation with a young population, strong mathematical ability, a passion for technology and a rapidly developing digital ecosystem.

These intrinsic advantages are even more valuable in a rapidly changing international landscape. According to Do Ngoc Hung, Viet Nam’s Trade Counsellor to the US, the restructuring of global supply chains after the COVID-19 pandemic, coupled with the US’s drive for domestic production and reduced dependence on China, is creating strategic opportunities for Vietnamese businesses, particularly in high-tech, industrial equipment and digital solutions.

In fact, many US companies are actively seeking reliable suppliers outside China, and Viet Nam is highly regarded thanks to its increasingly complete manufacturing ecosystem, competitive costs, young labour force and steadily improving technical skills. This is complemented by political and social stability, a high level of international integration and rapid domestic digital transformation.

Viet Nam is also seen as a potential partner for supplying precision mechanical components, moulds and auxiliary equipment to support the US’s key industries. These sectors demand high technical standards, strong reliability and stable supply – all areas where Vietnamese enterprises are steadily improving.

Making the most of existing opportunities

Although opportunities for US–Viet Nam cooperation in technology are wide open, market access still faces numerous barriers. This is especially true given the US’s increasingly stringent legal framework on intellectual property, cybersecurity, national security and technology export controls. In addition, cuts to foreign aid funds have somewhat limited Vietnamese firms’ access to resources.

Hung emphasised the need to strengthen connections between companies from both countries in priority technology areas such as electric vehicles, software, electronics, semiconductors, AI and environmental technology. Viet Nam should cooperate with major corporations such as Tesla in supplying components, batteries and green transport solutions. At the same time, domestic firms like FPT and Viettel should be supported to expand their presence in the US through subsidiaries, R&D centres and distribution networks.

It is also important to shorten licensing procedures for importing semiconductor chips and high-tech equipment from the US, to avoid missing opportunities in digital industry development and high-tech manufacturing. Viet Nam should develop smart manufacturing – a growing trend in the US – by building a supportive ecosystem for enterprises, enhancing workforce quality and swiftly issuing national standards for the sector.

Finally, accelerating negotiations for a comprehensive Viet Nam–US bilateral trade agreement would help remove tariff barriers, create a stable legal framework for investment, technology transfer and deeper integration into the global value chain.

From a domestic perspective, Giang of VINASA stressed the need for a more comprehensive strategy to support technology firms in sustainably expanding abroad. In reality, Vietnamese tech enterprises still face significant challenges when approaching international markets.

Foremost is the lack of local market presence. Secondly, there is insufficient market intelligence, including information on target customers, legal frameworks and effective access channels. Notably, Viet Nam’s IT sector has yet to launch a coordinated national communications campaign to promote its image, capabilities and brand internationally.

Given this, Giang proposed the creation of a dedicated trade promotion strategy for the IT sector, aligned with the new development context and the accelerating pace of global digital transformation. This should be accompanied by increased trade promotion budgets, with flexible allocation based on export revenue, and a relaxation of approval processes for national promotion programmes – allowing firms to receive support multiple times per year, similar to successful models in the Republic of Korea.

She also highlighted the importance of establishing shared offices for Vietnamese tech firms in major technology hubs such as the US, Japan and Singapore. These would serve as legal and commercial “bases”, providing official representation, boosting credibility and expanding opportunities for long-term cooperation with international partners.

Overall, taking Vietnamese technology global is no easy feat, but the opportunities are clear. To go far and with resilience, Viet Nam must not only grow rapidly but also strengthen corporate capacity and fine-tune policy support – at the right time and with the right focus.

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