Over recent years, Da Nang has received high praise from its foreign partners for its capacity for information technology (IT) outsourcing.  As a result, the revenue of the city’s IT sector has seen remarkable growth over the past decade.

Employees at a local IT company

According to the latest statistics released by the municipal Department of Information and Communications, the local IT sector earned 19,057 billion VND last year, an 11-fold increase in comparison with 2006’s figure.  The sector has maintained an average annual growth rate of 30%.

However, most of the city’s IT businesses are small-scale, and they are facing a severe shortage of capital and investment in advanced technologies. 

The Department’s Director, Mr Nguyen Quang Thanh, remarked “Da Nang is now home to over 700 IT businesses, but not one has over a thousand employees.  As a result, they are facing a lack of skilled employees to ensure their effective operation and enhance their competiveness against larger scale competitors from India and China.  Therefore, they often lose out on opportunities with foreign partners”.

Mr Thanh noted that one of the main reasons is the serious lack of working space in the city for IT businesses, whilst infrastructure at the local IT industrial parks has yet to meet the increasing demands from the developing IT sector.

Due to their small-scale of operation, local IT businesses mainly specialise in software outsourcing and assembling imported components.  In addition, only modest encouragement has been given by the city authorities to spur the IT businesses into conducting research and development of their own special IT products.

In attempting to deal with these problems, the city is giving top priority to developing the IT sector as one of its spearhead economic sectors, with a focus on software, digital content and IT services, in the years ahead.  The intention is to gradually make Da Nang into an IT hub in the central region.

Greater efforts will be made to help local IT businesses to expand their domestic and foreign consumer markets, promote their products, build their brand names, and gain easier access to the city’s Credit Guarantee Fund (CGF) for local small and medium-sized enterprises.