July 10, 2007 6:32 AM PDT

Vietnam: The next offshoring hot spot?

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 recently acquired Ho Chi Minh-based recruitment business SilkRoad for $1.8 million.

Harvey Nash cited the fact that Vietnam has the second-highest gross domestic product growth after China and that it's now the third-largest offshore-services destination in Southeast Asia.

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

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

"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," he said.

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

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

Andy McCue of Silicon.com reported from London.

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6 comments

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Simple solution
It's all very simple.

Any country that establishes a trade surplus with the U.S. should be taxed to make up for it and the funds should go directly into Social Security until we can afford to have our own families again and not only through the good will of crooked business owners looking for windfall profits by driving wages down.

End of subject.
Posted by JadedGreg (33 comments )
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Xenophobic thought
Trade deficit? Try trade surplus. According to Forbes, through the first 8 months of this year, the US has a $6.4 Billion trade surplus with Vietnam.

In regards to your idea... isn't the problem with American's not competing on the global market place? Why should Americans be working in factory and other menial labor jobs? Our cost of living is much to high for this. If we really want these kind of jobs, we should stop living a first-world lifestyle, and the jobs will come back.

We need to pour money into re-educating those factory workers to compete on the global marketplace. Dumping money into entitlement programs is not going to fix the root of the problem. Education is the root. Spend our money there (instead of wars!)
Posted by Lucas Jans (1 comment )
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We've Already Offshored Nut Production To 'Nam
Why not offshore high-tech to 'Nam? We've already offshored nut production. The next time you stop by Trader Joe's, read the labels on nut products like cashews. You'll see that they either come from 'Nam or Thailand. The nutcrackers, well of course they are from China. After you eat your 'Nam nuts then you can brush your teeth with Chinese toothpaste.
Posted by Stating (869 comments )
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vietnam
why is the most recent story on Vietnam IMPOSSIBLE to find on your website and this outdated one featured? Where is "Vietnam becomes crouching tech tiger?"
Posted by djacobsonw (27 comments )
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Vietnam will become leading software outsourcing in near future!
www.tuvinh.com
Posted by tuvinh (4 comments )
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Vietnam will be one of the top place where to do software outsourcing in the world.

8x Solutions Inc. - Software Outsourcing Company in HCMC, Vietnam
www.8xsolutions.com
Posted by 8xSolutions (1 comment )
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