VietNamNet Bridge – The products and solutions displayed at the
2012 information technology and communication (ICT) expo have astonished the
public, because they have been too familiar and uninspiring to people.
More than 40 years ago, Gordon
Moore, the co-founder of Intel, said he believed that the capacity of
microprocessor would be double once in every 1.5 years. This is also the nature
of the ICT industry: products and solutions have been improved every day.
Therefore, the familiar old hat
products and solutions displayed at the trade fair prove to be enigmatic for
people. The familiarities could be seen also at the workshop on the sideline of
the trade fair, discussing the policies and giving predictions about the
Vietnam’s ICT development.
The same experts, management
agency representatives and businessmen were invited to the workshop, while the
same way of taking stocks was applied.
While Vietnam still keeps its
viewpoint unchanged over the last many years, its circumstances and conditions
have become quite different from that of 10 years ago.
A lot of changes have happened in
the world over the last 10 years. No one could imagine before that a young
company run by a young person – Facebook - could have the market value of tens
of billions of dollars in the IPO. Meanwhile, in Vietnam, there has been no big
change in the ranking in the ICT industry.
Trade or technology?
FPT, which has been always
leading the Vietnam’s ICT industry, was once classified by the HCM City Stock
Exchange as a distributor. This was because in the eyes of clients and
investors, Vietnamese IT firms simply acted as the sales agents which
distributed foreign made products and solutions.
Customers keep complaining that it’s
nearly impossible to find any IT products made in Vietnam and invented by
Vietnamese people. IT firms just have been doing the outsourcing for foreign
partners to earn money, while they do not spend money and time on developing
their own technologies.
Chu Tien Dung, Chair of the HCM
City Computing Association, which conducted a survey on 256 IT firms,
accounting for 85 percent of the total revenue and use 75 percent of the labor
force in the IT industry in the city, said domestic IT firms’ operation has
been on the decrease.
The survey found out that the
total turnover of the enterprises in 2011 increased by 17.6 percent over 2010
to 80,347 billion dong, of which hardware and electronics had the turnover of
34,844 billion dong.
However, the problem is that the
growth was mostly seen in foreign invested enterprises which saw the turnover
rising from 4066 billion dong to 13,415 billion dong. As such, of the 11,447
billion dong worth of the revenue increase, 9349 billion dong came from foreign
invested enterprises.
Meanwhile, domestic firms have
not obtained such satisfactory results, and if noting that the turnover
increase could be partially attributed to the inflation, one would see that
domestic firms’ business results have been on the decrease.
Dung also gave warning about the
low ratio of the profit on revenue of IT firms, just three percent. Only 20
percent of hardware companies could really make profits. The figures gave
warning about the bad prospect of the enterprises in the future, while no solution
to the problem has been discussed.
Thirty three medals were granted
to the best enterprises in eight groups to recognize their achievements. The
second group, comprising of the leading Vietnamese computer brands, and the
eighth group, comprising of the leading enterprises in ICT training) both have
seen sharp falls in turnover.
The second group of enterprises
includes the familiar names - FPT Elead, Robo, CMS, Wiscom, SingPC. The
turnover of the enterprises in the group dropped dramatically by 21 percent to
851 billion dong from that of 2010. Meanwhile, the turnover of the enterprises
in 2010 was 25 percent lower than that of 2009.
The noteworthy thing is that
while domestic hardware and computer assembling companies have been taking loss
continuously, the sales of foreign products have been increasing sharply in the
domestic market.
Dinh Minh
Business & Investment Opportunities
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