Vietnam’s path to tech self-reliance gains momentum

Vietnam’s export-driven economy is facing renewed pressure from global trade tensions, including recent tariff measures from the United States. These developments have exposed the country’s dependence not only on foreign markets but also on imported technologies, particularly in areas like cloud computing, cybersecurity, and artificial intelligence (AI).

This moment presents an opportunity to rethink Vietnam’s digital strategy. Rather than continuing to rely on overseas platforms and infrastructure, the country can accelerate its shift toward self-reliance by investing in domestic technology. The recently passed Law on Digital Technology Industry (DTI) provides a timely framework to support this transition.

Reducing reliance on imported technology

Vietnam currently imports a significant share of its digital infrastructure, from hardware and software to cloud and Internet of Things (IoT) services. These imports, sourced from countries such as the United States and Israel, come with high costs and limited control over data usage. For example, services from companies like Google, Microsoft, and Amazon are subject to US export laws, which can restrict access based on geopolitical relationships.

Developing in-house platforms and tools would reduce these vulnerabilities and provide more open access to Vietnamese users. It would also support the DTI Law requirements for data privacy and sovereignty by storing and sharing data according to local regulations.

Why domestic platforms matter

Beyond cloud and cybersecurity services which are reliant on global providers, Vietnam’s digital consumer market is also dominated by foreign platforms such as Shopee and Grab. These platforms boast advanced software, speed, and user experience, making it difficult for local alternatives to compete. However, with the right investment in skills and infrastructure, this imbalance can be addressed.

India offers a useful comparison. Domestic platforms like Ola and Rapido have successfully challenged Uber by offering services tailored to local needs. Vietnam could follow a similar path, especially with support from the DTI Law’s fiscal incentives and technology acquisition subsidies.

Developing a Vietnamese generative AI tool, for instance, would allow for broader access and reduce bias linked to foreign political or commercial interests. It would also help bypass restrictive international regulations, ensuring that Vietnamese users are not excluded from essential services due to external policy decisions.

The domestic IT boom could lead to regional opportunities. Vietnam’s strategic location, cultural proximity to ASEAN neighbours, and growing digital literacy position it well to become a regional hub for digital services. By offering customised, cost-effective software solutions, Vietnam could export its capabilities to countries like Cambodia and Thailand – markets that may prefer locally adapted services over generic global offerings.

Building the workforce to support digital growth

Vietnam’s demographic advantage is clear: as of 2024, 51.7 per cent of the population is under 34. This young, tech-aware workforce is a major asset in the shift from low-cost manufacturing to a digital economy. However, only 28.8 per cent of the Vietnamese workforce currently hold a technical degree or certificate, highlighting a significant skills gap.

Education-industry collaboration in designing and assessment will be key. Vietnam could adopt models like Germany’s dual vocational training system, which combines classroom learning with hands-on experience. Institutions such as RMIT already offer industry-focused courses in IT, AI, IoT, and cybersecurity, helping prepare the workforce for future demands.

The government should undertake programs to introduce IT in the curriculum at the early stages of schooling. Also, it is worth thinking about providing incentives to small institutions providing skill uplifting courses and certifications based on industry requirements. This will enable easy access to IT-related courses to a section of the population who cannot afford to study at universities.

Vietnam’s Digital Technology Industry Law is a strategic shift toward digital sovereignty and economic resilience. By fostering domestic innovation, reducing reliance on foreign platforms, and investing in human capital, Vietnam is laying the groundwork for long-term leadership in Southeast Asia’s digital economy.

Story: Dr Sreenivas Tirumala, Senior Lecturer in IT, School of Science, Engineering & Technology, RMIT University Vietnam

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