Over recent years, Da Nang has been issuing many preferential policies for local information technology (IT) businesses, including facilitating access to bank loans, organising more trade promotion activities, and training qualified human resources for the local IT sector.  The intention is to increase the competitiveness of the businesses, help them to promote their production activities, and attract more talent and FDI inflow into the city’s IT sector.

The Director of the FPT Software Da Nang company, Mr Nguyen Tuan Phuong, said that the city’s incentive policies have helped local IT businesses to enhance their productivity and competitiveness, create thousands of job opportunities for local residents, and promote the city’s growth. 

Employees at a local software company

A representative from the city's Software Business Association said that, thanks to the city’s active support, local IT businesses have been able to overcome their difficulties within the context of fierce competition in both domestic and foreign markets. 

In particular, some of the city’s newly-established IT enterprises have accessed short-term loans from the city's Investment and Development Fund to develop their new and larger projects by rapid capital turnover.

The local VBPO Company is a typical example.  It has borrowed twice from the Fund, arranging a total of 1.5 billion VND in loans.  Over the 5 years of its operation, the company has already set up cooperative relationships with 30 foreign partners involving outsourcing services.  As a result, the company’s export turnover has exceeded its annual targets.

However, many local IT experts have remarked that the establishment of the ASEAN Economic Community (AEC) later this year will offer both opportunities and challenges for local IT businesses. 

One of the challenges is the fierce competitiveness of local and foreign IT businesses operating in the city in attracting high-quality human resources, and software projects from foreign customers.  In addition, the land lease fees and the costs of human resource training in Da Nang are also higher than in foreign countries.  This leads to higher prices for software products developed by local businesses rather than by foreign competitors like Malaysia, Singapore and China.

These experts have suggested that the city authorities should issue even more incentives for local IT businesses to help them expand their production and enhance their competitiveness against foreign competitors.