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Vietnam tipped to be next outsourcing hotspot
But China and India to remain dominant...

By Andy McCue

Published: Tuesday 10 July 2007

Vietnam is tipped to become a more popular outsourcing destination than both China and India within the next five years.

The bold claim has been made by recruitment company Harvey Nash, which has just bought Ho Chi Minh-based recruitment business SilkRoad Systems for $1.8m.

Harvey Nash cited the fact Vietnam has the second highest GDP growth after China and that it's now the third largest offshore services destination in South East Asia.

Special Report: Inside India

In February silicon.com's Steve Ranger visited the Indian tech hotspots of Bangalore, Mumbai, Pune and Hyderabad. Click on the links below to see photo galleries of the cities and companies visited.

♦ Satyam's IT campus
♦ Hyderabad's tech parks
♦ Bringing tech to rural India
♦ High-tech on the streets of Pune
♦ Pune - the new Bangalore?
♦ Boom town Bangalore
♦ Bangalore's Electronics City
♦ SAP and Wipro in Bangalore

The Vietnamese labour pool also has around 80,000 IT graduates, a figure that is increasing by 9,000 per year. More than half of Vietnam's 84 million population is under 25 years old and 83 per cent of all graduates are science-based.

But Mark Kobayashi-Hillary, co-author of Global Services: Moving to a Level Playing Field, said Vietnam's growth still pales into comparison against China and India, which are each churning out 2.5 million graduates per year.

He said: "There would have to be unbelievable growth in Vietnam. But it's not really about one country competing with another. We are moving towards global services and the whole pie is getting bigger."

Outsourcing: Five hot trends

What's looming on the horizon in outsourcing? - from globalisation to green sourcing, click here to read our take on the trends to watch.

Companies already outsourcing IT services to Vietnam include Honda and Intel.

SilkRoad Systems CEO Marc Voss said in a statement: "With a growing and youthful IT workforce, low costs and high aspirations to develop its software services, Vietnam is a natural offshore location and has all the ingredients to become the leading market choice in the next few years."