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Vietnam blooms as multi-lingual business center

"We chose not to go to India because, although they were very good at doing volume copying of software, they were not raising their quality and architecture."

Paul Smith, managing director of Harvey Nash's software development division

Giang Ding was enjoying the cool and quiet of the lobby at the Hanoi Hilton on Tuesday night, but he can still vividly remember the sounds and sights of the Vietnamese capital when it was being bombed by the US in the early 1970s.

Then he was a child, waiting to be evacuated into the countryside but now, after a wider odyssey around Europe, he is back working in his home city as a software engineer for a British company.

"I remember particularly the bombs on Christmas night in 1972. I can still feel the mood of the people, even though now the most we have to face is the speed of change," Ding said.

Vietnam still conjures up images of war, if only through films such as Apocalypse Now, to many in the West. Others still think of it as a struggling, third world economy that produced the boat people and is totally dependent on agricultural exports.

But these views are rapidly appearing outdated as the South-east Asian country, led by experts in information-technology (IT) such as Ding, muscles its way on to the world stage.

RETURNEES

Ding, a 38-year-old software specialist works for London-based IT recruitment firm Harvey Nash. He is one of a large number of Vietnamese who have returned to the country after working abroad -- in his case Austria and Ger-many -- armed with new skills and knowledge.

Ding went to the German Democratic Republic as part of an exchange program with the eastern bloc organized by Hanoi.

Others returning to Vietnam are former boat people who have returned with a variety of new languages from Europe, Japan and elsewhere in the Far East.

This linguistic goldmine, in a country where French and English have been spoken widely for many years, has been one of the major attractions for Harvey Nash.

The London Stock Exchange-listed company could have chosen India, China or even South Africa as an outsourcing center, but instead has pioneered Vietnam's entry into this fast-growing sector of international business.

Paul Smith, the managing director of Harvey Nash's software development division, says he has been attracted by the fact that the firm can offer work for a variety of different developed countries because of the language bank in Vietnam.

But he also talks of the "huge thirst for knowledge" shown by young Vietnamese people. The children of a trouble-hit generation have "channelled their tenacity and energy into the software market."

They have been encouraged to do so by the government, which is still nominally communist but, like China, is increasingly embracing aspects of the capitalist system.

The Hanoi authorities have thrown their weight behind outsourcing since signing a first joint-venture with Harvey Nash in 1999.

An office block in the center of Hanoi owned by Harvey Nash now employs 625 staff working on highly skilled software development work for clients such as Honda and the Discovery Channel.

"We chose not to go to India because, although they were very good at doing volume copying of software, they were not raising their quality and architecture," Smith said.

RIVALS FALTER

Since then, India has been hit by rising costs and skill shortages while China continues to struggle against cultural and language barriers in addition to little quality assurance, he believes.

Vietnam has the opportunity to overtake both India and China as a highly skilled, English-speaking workforce emerges from Hanoi university, according to Smith.

Political stability and government incentives encourage foreign companies to move outsourcing to a country which has embraced CMM, the quality control monitoring system developed by NASA.

Harvey Nash says its Vietnamese programmers with four years' experience earn US$400 to US$500 a month -- a tenth of the figure for similarly qualified staff in Britain.

Colin Heath, the head of management information systems at the Prince's Trust charity in London, is pleased he took the decision to outsource IT development to Vietnam just under a year ago.

He looks after 17 British staff who would be overwhelmed if they could not have brought in outside help, he argues.

"It has enabled us to concentrate our very limited resources as a charity on the things we really know best about," he said.

Harvey Nash has concentrated until now on the higher value end of the market and has avoided the call-center model. But it believes that in two years' time, it will be offering more general outsourcing services of the type common in India and China.

Smith is not the only executive singing the praises of Vietnamese productivity and capability.

Digby Jones, the director-general of the Confederation of British Industry, is due to visit the region in October. He has already spoken about Britain falling behind in the skills stakes and has singled out Vietnam as a nation which is fast moving up the value chain through concerted effort.

Honda, BMW and Mercedes-Benz are among the big manufacturing names which have already developed a significant presence in Vietnam, and tourism has become a major earner.

After six months back in Hanoi, Ding admits to still missing Europe, but he is excited by the vibrancy and rapid changes taking place in his native land.

"Many people think we just grow rice or export shrimps. I think it is good to show we can compete on the world stage in the high-tech sector, too," he said.
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