_The Global Information and Communications Technology Industry: Where Vietnam Fits in GVCs_ (BPO) or digital content), many with an international orientation in regards to investors, management, and markets.

Notebook computers, mobile phone, software and other ICT-enabled BPO services are now among Vietnam’s most important exports. Global lead firms are now among the county’s largest employers; Samsung alone employs 75,000 in the country, and is projected to reach 100,000 employees in the coming year. But aside from significant job creation, much of the growth in hardware exports has been hollow from a technological learning and industrial upgrading point of view. Specifically, spillovers based on backward linkages between foreign investors and domestic ‘supporting industry’ firms remain weak or non-existent. On the services side, Vietnamese software firms have found success both at home and abroad. Companies like TMS Solutions and FPT Software have expanded their base of operations, and are able to deliver services in multiple locations around the world. However, they occupy a relatively low-value niche in the GVC, as they do not have successful products of their own.

As the overview of Vietnam’s ICT industry in Table 4 shows, the ICT sector in Vietnam, while modest in scale, has demonstrated growth across a broad range of metrics. From 2009 to 2013, the number of hardware firms increased at an annual rate of 26 percent, employment grew by 24 percent, and revenues soared by 68 percent. Revenue growth was mainly driven by the entry and expansion of foreign investors operating labor-intensive assembly plants. Samsung has been especially important, expanding and shifting away from producing low-end handsets for the domestic market toward higher-end models for export.

What follows is a brief overview of Vietnam’s ICT sector, including an exploration of key lead firms, suppliers and other GVC actors operating in the country. The section will also examine key rules and regulations that shape the ICT landscape and help determine the range of opportunities available. We identify several constraints to future growth, including the availability and quality of ICT-related education, effective programs for supporting industries, and support for ICT startups. Our analysis is based on relevant statistics and policy documents as well as a brief period of field research during January 19-30, 2015. We conclude with a set of policy recommendations and forward looking statements aimed at helping Vietnam capture higher value activities in the ICT GVC in the coming decades.

**Table 4. Vietnam ICT Industry Snapshot, 2009-2013**

|**Area**<br>**Metric**|**2009**|**2010**|**2011**|**2012**|**2013**|**CAGR**<br>**2009-13**|
|---|---|---|---|---|---|---|
|Firms|992|1,273|2,763|2,431|2,485|26%|
|ICT Hardware<br>Revenue(Million)|$4,627|$5,631|$11,326|$23,015|$36,762|68%|
|Employment|121,300|127,548|167,660|208,680|284,508|24%|
|Firms|1,756|2,958|44|7,246|6,832|40%|
|Software<br>Revenue(Million)|$850|$1,064|$1,172|$1,208|$1,361|12%|
|Employment|64,000|71,814|78,894|80,820|88,820|9%|
|<br> <br>Firms|2,844|2,312|3,289|3,883|4,498|12%|
|ICT-enabled<br>Digital<br>Content (BPO)<br>Revenue(Million)|$690|$934|$1,165|$1,235|$1,407|19%|
|<br>Employment|41,000|50,928|60,200|63,242|67,680|13%|
|Firms|5,592|6,543|6,096|13,560|13,815|25%|
|Total<br>Revenue(Million)|$6,167|$7,629|$13,663|$25,458|$39,530|59%|
|Employment|226,300|250,290|306,754|352,742|441,008|18%|

_Source_ : Ministry of Information and Communication (MIC) White Book 2014. _Notes_ : The MIC does not collect data on ICT-enabled services on aggregate

# **The ICT Hardware Sector in Vietnam**

Vietnam’s ICT hardware sector has grown significantly in the last five years. Once a marginal sector of the economy, the government sought a more central role for ICT goods in the 11