The association in recent months has organized a lot of seminars and events to promote Vietnamese tech firms’ business in the Japanese market, stressing that Japan is a very promising market for Vietnam.

Japan’s IT sector is facing big challenges in the labor force and geopolitical risks. Many Japanese enterprises hope they can cooperate with Vietnamese businesses in some fields, such as workforce exchange and cross-border joint ventures.

A recent survey conducted by VINASA of 20 enterprises, including 10 enterprises with more than 1,000 workers, five with 500-1,000 workers and other five with 200-500 workers, found their revenue has been growing steadily over the last five years, 22-28 percent per annum, and a large proportion came from new business fields.

Previously, Vietnamese IT firms just worked with Japanese IT firms and solved questions that Japanese IT firms got from enterprises in different business fields. Recently, the number of enterprises in Japan’s various industries have placed orders directly with Vietnamese IT firms.

According to An Ngoc Thao, VINASA (the Vietnam Software and IT Services Association) , deputy secretary general, the Japanese IT outsourcing market is valued at $30 billion per annum. Of this, only $2 billion came to Vietnamese tech firms, while the remaining went to Chinese and Japanese pockets. 

In fact, if looking at the whole Japanese ICT industry, the scale could be up to hundreds of billion of dollars.

To increase opportunities in the Japanese market, Thao recommended that Vietnamese firms and workers prepare deep knowledge about other industries in Japan. 

Vietnamese firms need to invest in research and solutions for Japanese industries with high needs, such as manufacturing, automobile industry, finance and banking, insurance and healthcare on new technological platforms, such as cloud computing, AI and blockchain.

At the same time, they need to prepare a workforce of engineers with high capability in new technologies, and experts with deep professional knowledge who can be ready together with Japanese enterprises to research and develop new solutions from the very start.

Thao said that Vietnam now, in the eyes of Japanese, is one of the most important partners, especially with geopolitical advantages. He believes that Vietnamese firms will make a breakthrough in revenue when entering the Japanese market.

“The 50-100 percent growth rates could be unattainable by 2025, but revenue which is 5-10 times higher than now is quite within reach, if Vietnamese firms and human resources can prepare well,” he said.

“There will be large Japanese projects that need thousands or tens of thousands of workers,” he said. “Vietnamese firms need to set up firm alliances in both human resources and technological solutions and experience to deal with practical situations.”

“Once Japanese partners believe that Vietnamese enterprises can accompany them to implement their aspirations, will we be able to get large projects and think about 5-10-fold revenue growth in the next five years,” Thao said.

NTT e-MOI’s Nguyen Thi Anh also thinks that there is still large space for Vietnamese IT firms in the Japanese market. As the Japanese population is aging, the country is lacking laborers and needs more IT solutions.

For example, nursing for the elderly is a field which has great potential for development for at least 30 years more in Japan. The characteristic of the sector is providing services to older people, with reasonable costs, so applying IT is a must.

In the last 2-3 years, digitized nursing services has been a keyword attracting attention from the Japanese community.

In fact, this is just one of many sectors in Japan that must apply IT to offset the lack of workers, and this offers great opportunities to Vietnam’s IT firms.

Anh said when cooperating with Japanese businesses, Vietnamese IT firms need to prepare carefully to be sure that the two parties share the same view about the future picture and can work together for a long period.

“Particularly, it is necessary to clarify Japanese partners’ wishes and expectations from the products and services provided by Vietnamese firms, the way of cooperation, the assignment of tasks, as well as the expected profits. In many cases, Japanese customers make a small request but want Vietnamese enterprises to understand the broader implications," Anh shared.

Binh Minh