New opportunities for Vietnam's technology industry

Vietnam can learn from successful models in the region to strengthen its position as a growing digital innovation hub. Photo: Pexels .

Faced with tariff fluctuations, Vietnam’s technology industry faces many challenges. However, this is also an opportunity for businesses to accelerate digital transformation, applying technology to transform from factories into smart manufacturing centers.

Dr James Kang, senior lecturer in Computer Science at RMIT University Vietnam, said many domestic technology companies are adapting by shifting to smart technologies, investing in software and digital services, and seeking new markets to survive and minimize negative impacts.

Turn pressure into motivation

Over the years, Vietnam has benefited from global trade fluctuations, especially US-China tensions.

This time, Vietnam is under pressure again. The new tariffs make Vietnamese exports such as phones and semiconductors, including those from Intel, less competitive in the United States, one of its biggest markets.

“However, this challenge could become a turning point. Instead of waiting for the wind to change direction, many Vietnamese businesses have taken proactive action.

Vietnam has committed to blocking the flow of Chinese goods disguised as originating from its territory. This is a strategic move to reduce trade tensions and demonstrate goodwill towards the policies of the US President Donald Trump administration,” said Dr. Kang.

Vietnam’s technology exports, including electronics and semiconductors, are facing new tariff challenges as the US tightens trade measures. Photo: Pexels .

As labor costs rise and the business environment becomes increasingly unpredictable, Vietnamese technology companies are stepping up their adoption of AI and automation.

In 2024, FPT invested 174 million USD to build an AI center, continuing to pour another 200 million USD into a high-tech manufacturing facility. The group's focus includes software development, cybersecurity and next-generation AI.

While not every business has the same resources, Dr. Kang says the trend is expanding, with smart technology being used to cut costs, increase productivity, and maintain flexibility.

Becoming a smart manufacturing center

Vietnam was once known for its cheap labor and efficient assembly lines, but that is changing. More and more businesses are turning to smart manufacturing, automating technologies such as robotics, Internet of Things (IoT) sensors and data analytics to produce faster and more accurately.

Some companies also offer digital transformation services to help businesses modernize their operations. With tools like the Internet of Things, factories can monitor energy consumption, detect faults in real time, and control machinery remotely. These technologies are helping Vietnam move up the global value chain.

“Transformation naturally comes with challenges. Businesses need to invest in training human resources, upgrading technology and changing mindsets. For many companies, this is the only option to move forward,” the expert from RMIT University Vietnam emphasized.

Vietnam also has potential to develop digital services. Products such as cloud computing, software as a service (SaaS) and mobile applications are not affected by tariffs like physical goods.

Inside VNG Corporation headquarters in Ho Chi Minh City. Photo: Bloomberg .

Dr. Kang gave an example of VNG Corporation. Once known as a game and online application publisher, VNG now also provides cloud services globally.

“Sales of digital products helps businesses overcome tariff barriers, expand internationally, and reduce dependence on any single market,” he added.

Overall, this shift reflects a larger trend. Vietnam is moving away from its status as a “low-cost factory” and toward becoming a global creative and digital force, while lower-value manufacturing is increasingly moving to other developing countries, including Sri Lanka.

New growth opportunities

Amid tariff uncertainty, Vietnam is exploring new export avenues. Trade agreements such as the CPTPP, EVFTA and RCEP open doors to markets such as Japan, Canada, the European Union and neighboring countries in the Asian region.

“These agreements help Vietnam diversify risks and avoid dependence on one market. For technology companies, this means greater stability and more sustainable growth opportunities,” said Dr. James Kang.

Initiatives such as the Artificial Intelligence and Semiconductor Conference 2025 (AISC 2025) also aim to accelerate research in the fields of AI and semiconductor technology – two key pillars if Vietnam wants to maintain its competitiveness.

Vietnam’s technology landscape is at a critical turning point, requiring bold moves to innovate. In addition to businesses, the government also plays an important role in facilitating access to capital and supporting research activities.

Dr James Kang, Senior Lecturer in Computer Science, RMIT University Vietnam. Photo: RMIT Vietnam .

According to Dr. Kang, local schools and universities need to equip young people with skills to prepare them for future jobs. For investors, the message is clear: Vietnamese startups and digital services have the potential to go global.

To maintain its competitive position, Vietnam can “learn” from some successful models. For example, South Korea has built a strong technology economy through investment in innovation. India has made its global mark by exporting digital services, while Singapore has become a global technology hub through strategic planning and sustained investment.

“By strengthening its internal capabilities, adopting smart tools and pursuing a clear strategy, Vietnam has the opportunity to shape the future and lead the region in the next wave of technological growth,” Dr. James Kang emphasized.

Source: https://znews.vn/co-hoi-moi-cho-nganh-cong-nghe-viet-nam-post1551896.html