Outsourcing Toolkit

Vietnam tipped as future offshoring hotspot

Andy McCue silicon.com

Published: 11 Jul 2007 09:22 BST

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 has just bought Ho Chi Minh-based recruitment business SilkRoad for $1.8m (£887,139).

Harvey Nash cited the fact Vietnam has the second-highest GDP growth after China and that it's now the third-largest offshore services destination in south-east Asia.

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

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

He said: "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."

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

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