JETRO Expert: “Vietnam Tech Has Been More Advanced Remarkably in the Past Decade”

In a recent discussion with NTQ Solution, Mr. Yohei Arai, Director of the Innovation Team at JETRO (Japan External Trade Organization) Hanoi Office, shared insights into the potential of Vietnamese tech companies and how Japanese businesses perceive Vietnam’s digital capabilities in recent years.

Beginning with basic competencies, Vietnam’s digital capabilities have continuously surged, and it has actively implemented AI, IoT, and AR/VR in diverse sectors. With robust digitization efforts across industries, Google has recognized Vietnam as the fastest-growing digital economy in Southeast Asia, with over 1500 digital enterprises generating revenue from international markets in 2023.

Looking closer into Japan, one of the top IT destinations for Vietnamese tech firms, the rise of Vietnam’s tech landscape presents an opportunity for Japanese businesses to access high-quality resources and numerous choices of IT vendors. Moreover, this emergence might bring the potential for Vietnam to become an indispensable part of Japan’s digital economy in the future.

JETRO’s Perspectives!

Alongside the surge of Vietnamese IT firms into the Japanese market, there has been an active contribution of JETRO – Japanese government-related organization responsible for promoting trade and investment between Japan and its partner countries. For many years, JETRO has collaborated closely with Vietnamese organizations, and agencies to facilitate numerous promotional activities, acting as a bridge to connect Vietnam – Japan businesses.

In an exclusive sharing session with NTQ Solution, Mr. Yohei Arai, Director of the Innovation Team at JETRO Hanoi Office, provided diverse perspectives on Japan’s digital adoption landscape and how Vietnamese tech firms can leverage advantages to establish a stronger presence.

Mr. Arai emphasized key challenges of Japan’s IT Landscape, including severe technology resource shortages, population aging, and the necessity of advancing the latest digital transformation while maintaining legacy systems.  These are the areas that Vietnam can tackle thanks to the abundance of high-quality resources from both domestic and Japan, quick adaption to new technologies, and extensive experience in the successful deployment of offshore/nearshore IT models.

“I can say that Vietnam’s technology has been well-developed in the past decade. Some Japanese companies are impressed by the rapid technological advancements in Vietnam, and at some points become equal to Japan’s technology competencies. Moreover, in certain fields like telemedicine and digital payment, Vietnam also stands out in digital adoption,” shared Mr. Arai.

He addressed some of the advantages for Vietnam tech firms when comparing with India and China – Countries with the most developed IT service sectors. While Japanese companies began seeing the risks in software development in China, service providers in India are increasingly focused on Western markets. Along with internal competitive edges, this presents a significant advantage for Vietnamese digital enterprises stepping into the Japanese market in the coming period.

Currently, JETRO is actively collaborating with various Vietnamese government agencies and organizations to promote trade between Vietnam and Japan, fostering a deeper connection within the business communities of both countries. The investment cooperation between NTQ Solution and SB Technology is one of the typical examples representing a comprehensive strategic partnership between Vietnam – Japan businesses.

“Traditionally, the relationship between Vietnamese and Japanese companies in the IT field has been centered on outsourcing software development (offshore development), but I think this relationship will change as the Vietnamese economy develops in the future. In addition to offshore development, we need to move forward to building new business models, such as equal collaboration between companies from both countries. The recent remarkable growth of Vietnamese startups and the progress of digital transformation in Vietnam are important signals of a new trend, and I hope Japanese companies will not miss this opportunity.” Mr. Arai added.

To recap the discussion, Mr. Arai expressed that the globalization of Vietnam companies, with NTQ Solution as the typical example, is a positive signal, not only for the nation itself but also for Japanese companies as a whole.

“We look forward to seeing more partnerships like this as it provides an opportunity for business communities in both countries to develop together, and even potentially collaborate to expand globally,”  Mr. Arai expected,