What is it really like to do business in Vietnam? Firstly,

I was privileged to host Prime Minister Nguyen Tan Dung of Vietnam on the 4th March at a business forum in London. The event organised by Harvey Nash and Vietnamese Chamber of Commerce attracted over 500 executives. The blog of the whole event can be found at www.harveynash.com I have been asked for the transcript of my speech to the forum so I have published below.

What is it really like to do business in Vietnam?

Firstly, why do I feel qualified to talk with you on this subject?

I have been working with Vietnam for over 8 years now. Harvey Nash has over 2500 local staff engaged in Vietnam developing software and providing Business Process outsourcing services..

We feel we have experienced the very best of Vietnam and have faced most of the challenges. Last year we acquired a Vietnamese Technology business, (Silkroad), testing regulation, employment and legal frameworks. Although we faced a number of challenges we completed the transaction with few issues.

Our business growth is dependent on professional IT development and project management skills, and a strong science based educational infrastructure. Given that our markets are UK, Europe, USA and Australasia; English language skills are vital.

You may be surprised at how successful Vietnam is in some markets. I never fail to be amazed by how the vision of its leaders is converted into reality so quickly.

So a few facts: Vietnam are: number two in rice production, number one in pepper, number two in sports shoes, number two in walking boots, number two in coffee. If you buy a bicycle in the UK it is ‘odds’ on that it was made in Vietnam. If you buy shoes from Clarke’s then your children are walking to school in shoes made in Vietnam.

Speaking of education: if you have children at school, lesson planning, curriculum planning and admissions systems used by the teachers are developed in Vietnam. If you have been to the doctors recently the prescription system, the patient records and online appointment system used by your GP is written in Vietnam.

So Vietnam already touches our lives in so many ways.

The gigantic news screen in New York during the primary’s broadcast live data and interviews to America. I doubt if Mc Cain, Gulliani or Roney were aware that the software delivering the service to the world for MSNBC was written in Vietnam.

So what is our experience in Vietnam?

Firstly, the people. Friendly, enthusiastic, hardworking, committed, loyal, willing welcoming and family orientated. These are just a few words that describe the Vietnamese people but young dominates with over 60% of the population below 35 years of age.

When we first entered Vietnam it took a long time to get some of the basics activities done. We entered through a partnership with a Vietnamese company and frankly, back in 2000, if we had tried to set up on our own it would have been very difficult. Our Vietnamese partners helped us enormously as did our advisers. Local government red tape, business knowledge, ever changing processes, reporting etc were all difficult to manage. Looking back, it was just as much us as it was the Vietnamese business environment. The British Embassy have been magnificent over the last eight years.

The country has moved at an amazingly fast pace and like many emerging economies it will probably leap frog the traditional development processes. WTO accession has really made a huge difference, with improving legal, intellectual property, financial frameworks in place.

Changes to employment law which in my view have always been a positive in Vietnam have made it easier to manage our business, important for a people based business.

The real challenge is keeping up with the volume of legislation as change is implemented. A locally based advisor both from a financial and a legal perspective is a must.

As you would expect, a technology based business such as ours, requires a continuous supply of science based graduates. The Vietnamese government has invested heavily in the education process with significant help from UK and other countries Over the last years this has paid dividends with rising graduate levels through a number of really strong Universities. In the UK our skills crisis, particularly in the sciences is caused by the move towards the arts at junior school and beyond. Only 11.4% of UK graduates study science in the UK. In Vietnam the number is over 80%.

English is the second language taught in schools and universities. The result: written English is very good but spoken and conversational English is variable primarily because of lack of practice. We have had to implement conversational English lessons for all our staff and special English only days in our development centres. It is improving particularly for our team leaders, within our middle management and supervisory staff and recently we have noticed a marked improvement with graduates coming into the business.

In the early days our real challenge was with infrastructure, telecommunications in particular. Mobile reception was not good, not easy to call out or receive and constant dropped connections. Limited bandwidth made high speed computer connections a real threat.

Now, Vietnam internet connections as a % of population are at 18.4%, a top twenty country. We experience excellent bandwidth, constant power, I can’t remember the last time we used back up generators. You won’t see buildings spewing Diesel smoke in Vietnam as you do in India. Video conferences are in constant use and we have adopted VOIP with no real challenges.

With "8 million motorcycles in Hanoi, that’s a fact" ( sorry Katie Meula) the roads are a challenge in Hanoi and even more of a challenge in HCMC. Vietnam cannot build or widen roads fast enough as the car becomes pervasive. But that is not our biggest challenge.

Property is the happy problem that we have. I say happy because it means we are expanding. Prime Minister Dung witnessed Prudential signing a contract with Harvey Nash for a 300 people business process outsourcing project in Vietnam. We are recruiting over 100 graduates in our software centre. This year I will need space for at least 600 additional people.

Currently the demand for space is such that new buildings are committed off-plan. Vietnam cannot build fast enough to meet demand. So those are some of our experiences. Would we do it again! Yes most certainly. The best is to come.

Our new challenge is to harness the talent. Direct the energy, enthusiasm and passion of the people to grow our business internationally and inside Vietnam. We are building our middle management team; we are putting something back into the country through sponsorship of education at university level, through working to create MBA programmes in the UK and through sponsoring Vietnamese students into UK Universities through the British Embassy Chevening programme. We fund gap year students to come to Vietnam to teach English and run an annual mission for technology companies to Vietnam.

Finally, 8% GDP growth brings a healthy consumer market, opportunities in financial services, manufacturing, infrastructure, energy and services. On the plane going to Hanoi you will hear American, French, Australian and German accents. Vietnam is a great country to do business with so not to miss the boat. Even now the Germans are throwing their towels on your business opportunities.

END

March 10, 2008 12:39 PM | Permalink