Vietnam is a favorite supply of IT outsourcing services to Japan

Vietnam is a favorite supply of IT outsourcing services to Japan

According to a statistics from Japan's Ministry of Economy, Trade and Industry (METI), Japan has an average of over 100,000 engineers working in the fields of information security, cloud computing and mobile technology. For new technologies such as AI, Big Data, IoT and Robotic, etc., Japan will likely lack about 600,000 IT engineers by 2030.

The shortage of IT engineers in Japan has led to a high competition among companies in order to hire this rare human resource. To deal with the shortage of human resource in information technology in the country, in recent year, a number of Japanese companies have put their effort in finding and hiring IT talents from other countries, particularly from Asian countries. Besides, the use of outsourcing service is also an ideal solution for the problem of Japan.

Outsourcing is no longer a new trend. Becoming a trend since 2000, China and India were the two leading outsourcing service providers for the Japanese market. Since 2010, this trend has been shifting from China to Southeast Asian countries. Among major countries of outsourcing service providers in the region such as Myanmar, Thailand, Philippines and Bangladesh, Vietnam is the most competitive one.

Vietnam has a massive source of young technical labor with good technical qualification is a targeted source for Japanese companies. Vietnamese students have a strong background in scientific subjects which are suitable for the study and career option in IT, and their foreign language qualifications, especially English and Japanese, are well appreciated. IT teaching and training is also a focus of the education for the economic development and the industrialization effort of Vietnam. Therefore, software companies in Vietnam are enjoying a strong support from the state government.

Since 2014, Vietnam has been becoming the 2nd biggest partner to Japan in software and service outsourcing. More than 10 software companies in Vietnam have established their subsidiaries in Japan. A survey conducted by the Information Technology Promotion Agency Japan on more than 1,100 Japanese IT companies using outsourcing services shows that there are 31.5% of them likely to select outsourcing services from Vietnam, comparing to the numbers of 20.6% for India, 16.7% for China, 9.7% for Thailand, and 7.4% for Philippines.

A statistics indicates that Vietnam currently has 20,000 employees serving the Japanese market in ITO (Information Technology Outsourcing) and BPO (Business Process Outsourcing). Annually, there are about 55,000 IT graduates from universities and colleges in Vietnam. With more than 40 years of cooperation, Vietnam is ready to make up for Japan's increasingly lack of IT human resource because of the pressure of aging population.

On the recent Japan IT Day 2018 held by the VIETNAM SOFTWARE & IT SERVICES ASSOCIATION (VINASA) and the Vietnam – Japan IT Cooperation Club (VJC), Mr. Hironobu Kitagawa - Chief Representative from the Japan External Trade Organization (JETRO) in Hanoi said that Japan identifies Vietnam as one of the potential markets for investment as well as an IT human resource supply. Japan has invested in 54 IT projects, accounting for 19.6% of total investment projects in Vietnam and the investment wave from Japanese businesses will probably continue to increase in the future.

According to experts, the participation in training and hiring IT engineers from abroad countries is a good strategy of Japanese companies. This will not only help solve the urgent demand for IT human resource in this country but also provide high quality human resources for Japan in the long term.