The world including Japan has experienced a resource crisis during a difficult period of Covid 19. However, IDC predicts that global revenue in the IT sector and business services will continue to grow through the end of 2023, even as the global recession continues. In that situation, many businesses are in a shortage of experienced developers, so the trend of using outsourcing services with high quality and low cost is getting more and more popular.
According to GrandViewResearch, the global IT services market was valued at about $715.93 billion in 2020. Of which, the size of the IT Outsourcing (ITO) market was valued at $556.67 billion in 2020, accounting for 77.75% of the entire market. The annual growth rate of the IT services market is 8.4% and the ITO market is 7.7%. On that basis, the IT services sector is expected to be worth about $1,070.28 billion by 2025, and the ITO market will be valued at around $806.63 billion. That would still be more than 75% (75.37%) of the entire IT services market.
When it comes to the outsourcing market, Vietnam is known as a country with a young population and abundant high-quality, well-trained human resources. With the boom of information technology, many enterprises in Vietnam have started with outsourcing services and provided technology solutions to many other countries, including Japan.
For many years, Vietnam – Japan has always been in a friendly relationship, closely cooperating to develop together in all fields, especially in information technology. There are some reasons why Japanese businesses prefer to outsource technology projects in Vietnam
1. There’s not too much time difference
Nowadays, we can work online, sign an online contract, and also do meetings via online platforms. Distance is no longer a barrier as in the past, but time zone difference is still an issue to consider. Japan and Vietnam are only 2 hours apart, and it is convenient for exchanging work and setting up meetings for the team which leads to good working efficiency and creating good product quality for Japanese businesses.
2. Good meet demand of communication and language
According to statistics of the Japan Foundation in 2018, Vietnam is the 6th country in the world in terms of the number of people learning and using Japanese. In 2018, Vietnam had 178,000 Japanese learners, of which 31,200 are students of domestic universities – a potential high-quality resource for businesses. Therefore communication is a great strength of Vietnam when working with Japanese businesses.
3. Competitive price for talent resource
Reducing cost is the main reason for any business while choosing outsourcing from another country. Outsourcing service has helped Japanese businesses save money rather than do their recruitment by large effort, cost and time. For the Vietnamese market, the cost of outsourcing is more competitive than in other markets such as India, Australia or the US for the same level of engineers. Moreover, when it comes to business trips, it is not only easier for Japanese representatives to have business trips to Vietnam but cheaper also.
4. The similarity in culture and working style
Both Vietnamese and Japanese people are industrious and hard working. Due to the long time of cooperation and development, both countries share some common, deep understanding of the culture, work style and other aspects of life. Because of that, the cooperation of the two sides is always favorable and towards a long-term strong relationship. In addition, Vietnamese take work responsibility very seriously and always try hard to improve day by day, so their quality of work always meets customers’ expectations.
From the above reasons, Vietnam will be able to become a very potential market in the future for vendors from Japan and other countries. Vietnamese enterprises should pay more attention to training high-quality human resources reaching international standards. Thereby, meeting the demand for information technology resources to support Japanese businesses.
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SETA International is one of the leading software solution providers in Vietnam providing one-stop software development services with high quality, efficiency and competitive cost; and being trusted by international clients for the past 14 years like Amazon, Pfizer, American Airline. We provide IT consultation and IT outsourcing services for AI, VR/AR, IoT, mobile, web and cloud.