Vietnam - Software parks still far from “technology incubator”

The role played by concentrated software parks remains modest in the development of the information technology which has gathered 500 enterprises and 30,000 workers, or 10 percent of the number of enterprises and workers of the whole industry.


Enterprises put high hopes on software parks


More than ten software parks have been established in Vietnam since 2000, the year when the first software park was set up in the country. However, only a few of them can exist and develop.

According to Dr Mai Liem Truc, former Deputy Minister of Post and Communication, there are many reasons that make the parks not really attractive. 

In the past, when the telecommunication and Internet charges were high, the preferences in the software parks were once attractive to enterprises. However, as the charges have been decreasing, there is no more gap between the charges inside and outside the parks, while the tax incentives have been applied to all software enterprises, not only the ones in the parks.

Small and medium enterprises now cannot enjoy many preferences any more, while big enterprises in the field such as Viettel, VNPT or VTC have their own facilities outside the parks already.

In principle, the most important role of software parks is giving support to enterprises, acting as the bridge connecting enterprises and the government. In developed countries, software parks are the places where big hi-tech firms gather which connect the enterprises with universities and research centers.

Therefore, Truc believes that in the immediate time, software parks should be set up only in big cities like Hanoi or HCM City, while the massive establishment of software parks has caused a big waste.

CSC, a US-based big company, is now operating outside the concentrated software parks. However, CSC’s General Director Ngo Hung Phuong still believes that establishing software parks is a good policy, because the parks can support enterprises, attract foreign investors and show the government’s level of interests on the national technology development.

Ngo Van Toan, Deputy General Director of the US-based Global CyberSoft (GSC) which has 500 engineers working at the Quang Trung Software Park for the last five years, also believes that setting up software parks is a reasonable strategic plan.

However, he has stressed that one should not think that once Vietnam has software parks, it will have strong technology market, because this still depends on the economic development, business climate and many other factors.

The modest achievements

To date, the achievements gained by software parks, including the ones in HCM City, remain modest. The Quang Trung software, for a long time simply served as the “accommodation” for small enterprises. Big firms including GCS, TMA, Viettel, IBM and HP have only set up their software centers there recently, which is hoped to make the park more bustling.

To date, Quang Trung mostly acts as the place which provide service infrastructure to tens of workers and researchers a year. Meanwhile, it still has not reached the goal on production. 

Chu Tien Dung, Chair of Quang Trung Software Park, said the park has 5000 software workers, while training centers have tens of thousands of learners. This is just the achievements for the first phase of development of software parks, while in long term; the parks should focus on the research and development activities and technology idea incubation.

According to Dung, it is still very difficult to attract technology ideals to the “incubators” because enterprises still do not have sufficient confidence on the current incubation mechanism.

The Thu Thiem Software Park in HCM City has been sitting idle since 2008. Meanwhile, the Vietnam-Japan Park has been under implementation, but the project is facing difficulties due to the economic crisis. Meanwhile, the HCM City authorities are reconsidering if the State or private enterprises should be allowed to develop software parks. Software industry is really a special field which needs venture and big investments. 

Saigon Tiep Thi
Business & Investment Opportunities
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