Vietnam: The next offshoring hot spot?

Despite country's "growing and youthful IT workforce," China and India to remain dominant in outsourced business services.
Written by Andy McCue, Contributor
Vietnam is tipped to become a more popular outsourcing destination than both China and India within the next five years.

The bold claim has been made by recruitment company Harvey Nash, which recently acquired Ho Chi Minh-based recruitment business SilkRoad for $1.8 million.

Harvey Nash cited the fact that Vietnam has the second-highest gross domestic product growth after China and that it's now the third-largest offshore-services destination in Southeast Asia.

The Vietnamese labor pool also has about 80,000 IT graduates, a figure that is increasing by 9,000 per year. More than half of Vietnam's 84 million population is under 25 years old, and 83 percent of all graduates are science-based.

But Mark Kobayashi-Hillary, co-author of Global Services: Moving to a Level Playing Field, said Vietnam's growth still pales in comparison to that of China and India, which are each churning out 2.5 million graduates per year.

"There would have to be unbelievable growth in Vietnam. But it's not really about one country competing with another. We are moving towards global services, and the whole pie is getting bigger," he said.

Companies already outsourcing IT services to Vietnam include Honda Motor and Intel.

"With a growing and youthful IT workforce, low costs and high aspirations to develop its software services," SilkRoad CEO Marc Voss said in a statement, "Vietnam is a natural offshore location and has all the ingredients to become the leading market choice in the next few years."

Andy McCue of Silicon.com reported from London.

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