Tuesday, September 9, 2014

Silicon Valley dream in Vietnam is coming true

VietNamNet Bridge - The emergence and expansion of international technology corporations in Vietnam in the past two years shows an important shift in investment. The Vice President of the Vietnam Association of Foreign Investment Enterprise (VAFIE), Nguyen Van Toan, talks about this trend.
Q: Microsoft recently announced that it would expand the production scale of the Nokia cell-phone factory in Bac Ninh Province. Earlier, Samsung, LG, and Intel had also said they would increase their investment in Vietnam. What do you think about the investment wave of these world-leading technology companies?

Silicon Valley, IT, technology corporations, microsoft, samsung, LG
Mr. Nguyen Van Toan.

A: Foreign investment is not something new in Vietnam but the appearance of technology groups with projects worth billions of US dollars show the changes. This proves that the investment climate in the country is getting better and Vietnam is becoming the preferred destination of foreign investors, especially as many international companies are gradually withdrawing from China because of macroeconomic instability and high labor costs.
This opportunity also comes at the time Vietnam is strongly changing its investment attraction orientation, focusing more on quality and giving priority to investment in the field of high technology, clean technology and source technology and the investors from the developed countries.
The presence of multinational corporations can push the development of the local business community, help local businesses participate in the global production, supply chain, increase export value and improve the quality of human resources.
Creating a Silicon Valley in Vietnam is the dream of many people. I know that Samsung is seeking land to set up a research center in the north. This is a good sign because if they do so, it means that they want to turn Vietnam into their global production base. The latest technologies and models will come from here.
Q: However, the under-developed supporting industry of Vietnam is a barrier hindering the country from entering the production chain of multinational corporations. What do you think about this?
A: The support industry has been a matter of concern for decades, but until now it has not been solved properly. For Samsung, its current supply chain includes 80 foreign units.
However, when more international technology groups come to Vietnam, I believe that Vietnam's supporting industries will prosper. In early September, VAFIE will hold a conference with local businesses to seek supporting partners. It is good if a big technology group can select 10-15 Vietnamese firms.
A businessman told me that it is a huge success if Vietnam can join the 1% on the value chain of the technology groups like Samsung.
Q: To become a partner of the multinational corporations, what should Vietnamese businesses do and what support that they need?
A: First of all, Vietnam must invest heavily in technology, brains and human resources. Initially, they may have to import technology. Obviously, technology is a long-term issue of Vietnam.
In addition, the Government should also have incentives for support industries in terms of taxes, land leasing, and capital to promote the development of this field. Priority should also be given to foreign high-tech enterprises if they commit to support and have long-term cooperation with domestic enterprises.
Management mechanisms also need to be stricter to create transparency in the investment environment.
Q: With the new policies on investment encouragement, how will be the wave of investment of high-tech groups in Vietnam in the coming time?
A: Years ago, experts predicted the new wave of investment shifts into Vietnam and this is the biggest opportunity, both economically and politically. In the message released early this year, the Prime Minister set out the key task of seeking new growth engine for the economy, which is the technology platform.
At the same time, developing the high-tech industry, cooperating with many international friends such as Japan, the USA, South Korea, and the EU are also the key to Vietnam to escape from dependence, toward greater equality in development production. I believe that Vietnam can succeed in this shifting wave.
Source: VNE/VNN
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