Vietnam’s Remarkable Rise
1 Introduction
Is Vietnam the new Silicon Valley of Asia? The question may sound exaggerated, but it points to a real phenomenon: Vietnam’s astonishing rise from the ashes of war to become a dynamic “little Asian Tiger.” Over the past few decades, Vietnam has transformed from one of the world’s poorest, conflict-torn countries into one of its fastest-growing economies. We here explore the roots of Vietnam’s success – examining how history, culture, geography, and outside influences converged to fuel an economic boom. Our focus however is on the burgeoning software and tech sector. Our goal is to enlighten the business community about the remarkable developments in Vietnam, a country that until recently many might have overlooked. In doing so, we will see that while dubbing Vietnam “the next Silicon Valley” might be hyperbolic, the nation’s trajectory in technology and innovation is certainly worth paying attention to.
2 From War to Reform: Vietnam’s Economic Transformation
Vietnam’s post-war situation in the late 1970s and 1980s was dire. After the decades-long Vietnam War (ending in 1975) and additional conflicts, the economy lay in ruins – agrarian, isolated, and mired in poverty under a strict centralized system. By the early 1980s, Vietnam was on the brink of economic collapse, with per capita GDP under $300 and chronic shortages of food and goods. Faced with this crisis, the Vietnamese leadership made a pivotal decision: in 1986 they launched the Đổi Mới (“Renovation”) reforms to transition from a Soviet-style planned economy to a “socialist-oriented market economy”. The Đổi Mới reforms introduced market incentives, encouraged private enterprise, and opened Vietnam to foreign trade and investment. In 1987, Vietnam passed its first Law on Foreign Investment, signalling that foreign companies were welcome.
Vietnam didn’t stop there. The government has taken bold steps, cutting over 120,000 public sector roles and reducing the number of provinces from 63 to 34 to streamline operations and boost agility. Also there’s a strategic pivot from state-owned enterprises to strengthening the private sector. The IT and software industries are receiving strong support, including tax exemptions and other incentives to spur innovation.
The results of these reforms have been nothing short of dramatic. Over the subsequent decades, Vietnam’s economy accelerated with export-led growth and industrialization. GDP per capita has increased roughly 20-fold since the late 1980s. Once a country where the vast majority lived in extreme poverty, Vietnam has become a middle-income nation and one of the fastest-growing economies in the world. The poverty rate plunged from about 58% in the early 1990s to around 2% by 2021, meaning over 40 million Vietnamese lifted themselves out of poverty. Such an historically rapid reduction in poverty – meeting the UN Millennium Development Goals a decade early – has been lauded by the World Bank as “exceptional”. In short, Vietnam rose from wartime ashes to economic success through bold policy change and integration into the global market.
3 Cultural and Demographic Catalysts
Several internal factors rooted in Vietnam’s culture and demographics have underpinned this success. First, Vietnam has invested heavily in its people. The country’s population is now about 100 million – roughly the same order of magnitude as Germany’s – and importantly, more than half of Vietnamese are under the age of 35. This young workforce is a demographic dividend fuelling growth. Recognizing that human capital is key, the government made primary education universal and compulsory early on, achieving a literacy rate above 95%. Vietnam’s emphasis on education (a trait influenced by Confucian cultural values) means the labour force is relatively skilled and highly literate, ready to work in manufacturing or services where basic technical skills and learning ability are required. In fact, broad education investments and a focus on science and engineering have created a talent pool that is attractive to investors and suitable for a fast-changing economy.
Vietnam’s culture of resilience and work ethic, forged through years of hardship, is often cited as an intangible factor in its rise. The population has shown an entrepreneurial spirit once market reforms allowed private business – today millions of small businesses contribute to the economy. Socially, Vietnam’s development has been relatively inclusive: women participate in the labour force nearly as much as men, a smaller gender gap than in many countries. Ethnically, Vietnam is diverse (with 50+ minority groups alongside the Kinh majority), but the country has generally maintained social cohesion around national development goals. This diversity means a variety of cultural perspectives and regional strengths can contribute to the economy. For example, harnessing the creativity of all groups – including ethnic minorities and women entrepreneurs – has been part of Vietnam’s strategy for sustainable growth. The government and educational institutions have also begun tapping the Vietnamese diaspora (over 6 million people abroad) as a source of expertise and innovation. Many overseas Vietnamese have attained high-tech skills in Silicon Valley or other global hubs, and Vietnam is encouraging them to connect back with the domestic start-up ecosystem. In short, Vietnam’s youthful human capital, cultural emphasis on learning, and inclusive approach to development have provided a strong foundation for economic success.
4 Global Integration and Foreign Investment
External influences have been equally critical to Vietnam’s rise. After Đổi Mới, Vietnam pivoted to an export-oriented growth model and actively courted foreign trade and investment. The country integrated into the global economy through joining ASEAN in 1995, signing bilateral trade agreements (including a pivotal trade deal with the U.S. in 2000), and eventually joining the WTO in 2007. Today, Vietnam is party to numerous free trade agreements – from the CPTPP to an FTA with the EU – which give it favourable access to key markets. This global integration has attracted high levels of foreign direct investment (FDI), especially as multinational manufacturers seek alternatives to China. Vietnam’s strategic location in East Asia, near global supply chain networks, and its stable political environment have made it a prime destination for investors looking for a “China+1” location. Investors from Japan, South Korea, Singapore, the U.S., and Europe have poured capital into Vietnam’s factories and real estate. FDI inflows reached about $25 billion annually in recent years and are projected to remain robust.
The impact of outside investment can be seen in Vietnam’s booming manufacturing sector. Companies like Samsung, LG, and Intel have built major production facilities in Vietnam. Vietnam is now one of the world’s leading electronics exporters – it has become a top producer of smartphones and electronics, second only to a few giants like China. The country also excels in textiles, footwear, and agricultural exports (it’s the second-largest coffee exporter globally). Crucially, foreign companies haven’t just brought money; they have brought know-how, technology transfer, and access to global markets, all of which have helped Vietnam climb the value chain.
Outside influence extends beyond just corporations. International development aid and expertise (from the World Bank, UN, etc.) assisted Vietnam’s transition in the 1990s and 2000s. More recently, as mentioned, the overseas Vietnamese community – including successful tech entrepreneurs abroad – acts as a bridge, advising start-ups at home and sometimes returning to launch ventures. In essence, Vietnam’s openness to the world has allowed it to leverage foreign capital and knowledge while still shaping these for national benefit. This blend of internal drive and external connection is a hallmark of Vietnam’s growth story.
5 Vietnam: The New Asian Tiger?
Thanks to the factors above, Vietnam is often cited as a rising “Tiger” economy in Asia. The term “Asian Tiger” originally described the high-growth economies of Singapore, Taiwan, South Korea, and Hong Kong. Vietnam now gets compared to these earlier Miracles for its sustained high growth. Indeed, Vietnam is frequently grouped with other fast-growing Southeast Asian economies as a “Tiger Cub Economy”. The numbers bear this out: Vietnam’s GDP growth has averaged around 6–7% for most of the past two decades (apart from a brief pandemic slowdown). Even in 2022, growth rebounded to 7.1%, and the World Bank projects around 6.5–6.8% annual growth in 2025–26. This pace is among the highest in the world and is set against the backdrop of a slowing global economy.
To put this in perspective, consider Germany – a much more developed economy of similar population size. While Vietnam is booming, Germany’s economy is stagnating by comparison. In fact, Germany’s output in 2024 was roughly the same as in 2019 (zero net growth over five years), and the outlook for 2025 “signals continued stagnation,” marking Germany’s longest period without growth in decades. German experts predict essentially 0% GDP growth in 2025 (after near-zero in 2023–24). Vietnam, meanwhile, grew over 5% even during the pandemic years and quickly returned to a high growth trajectory. This contrast highlights why Vietnam is drawing attention: at a time when many advanced economies face aging populations and sluggish growth, Vietnam offers youthful dynamism and expansion. Its economy is now the 37th-largest in the world (nominal GDP) and could rise much higher if high growth persists. Some analysts even project Vietnam could surpass established economies like Singapore in size over the next decade if trends continue.
Calling Vietnam “the new Silicon Valley” is an oversimplification – Vietnam still has far lower income levels and a different economic structure – but the spirit of the phrase captures Vietnam’s emerging role as a regional tech and innovation hub. The label “Little Asian Tiger” is perhaps more fitting: Vietnam has clearly joined the ranks of Asia’s most dynamic economies, thanks to a combination of historical resilience, favourable demographics, cultural emphasis on education, and global economic integration.
6 A Booming Tech and Software Sector
One of the clearest indicators of Vietnam’s progress is the rapid growth of its technology and software sector. In recent years, Vietnam has increasingly been talked about as an up-and-coming tech hub – sometimes nicknamed a potential “Silicon Valley of Southeast Asia” (or “Silicon Delta”). The Vietnamese government has explicitly prioritized the digital economy as a pillar of growth. Policies like the National Strategy on Digital Economy aim to position Vietnam as a global IT hub by 2030. This top-level support, combined with Vietnam’s cost advantages and talent pool, has spurred impressive growth in the tech industry.
According to the Vietnam Software Association (VINASA), Vietnam’s software and IT services industry generated over $4.5 billion in revenue in 2022 and is growing at 10–15% per year. The country has become a popular destination for software outsourcing and offshore development, thanks to several key strengths:
- Skilled Talent Pool: Vietnam produces more than 100,000 IT graduates every year, many with strong skills in programming, AI, cloud computing, and other in-demand technologies. Technical education is booming, and Vietnamese engineers are often well-versed in English, which is helpful in serving international clients. This young tech workforce is hungry to prove itself, much like India or China’s were in earlier decades.
- Cost Competitiveness: Software development services in Vietnam cost 30–50% less than in Western countries. For example, a mid-level developer in Vietnam might earn one-third of a counterpart’s salary in the U.S., yet with comparable skills and quality. This affordability, without a big sacrifice in quality, makes Vietnam extremely attractive for outsourcing contracts.
- Government Support and Infrastructure: The government not only sets visions like the 2030 IT hub goal, but also backs it up with action – establishing tech parks, investing in ICT infrastructure, and offering tax breaks for tech investments. Internet access is widespread and cheap (thanks to heavy infrastructure investment, even rural areas are getting connected). Additionally, Vietnam ranks highly on global indices for outsourcing attractiveness (such as A.T. Kearney’s Global Services Location Index), reflecting its improvements in ease of doing tech business.
- Business Ecosystem and Investment: Over the last decade, Vietnam’s start-up ecosystem has blossomed. As of 2024 there were over 4,000 start-ups operating in Vietnam, including at least two “unicorns” (start-ups valued over $1 billion) and around 11 more companies valued above $100 million. Pioneering tech firms like VNG Corporation (online gaming and digital content) achieved “unicorn” status, followed by fintech companies like MoMo (e-payments) and VNPay, and blockchain gaming developer Sky Mavis (known for the game Axie Infinity). The presence of these high-value start-ups shows that Vietnam is not only doing outsourcing, but also creating innovative products and platforms of its own. Supporting this, there are now hundreds of incubators, accelerators, co-working spaces, and VC funds in Vietnam’s major cities to nurture new tech ventures.
Together, these elements have turned Vietnam into a rising star in software development and IT. The country is already Asia’s second-largest software outsourcing destination after India in some rankings, serving clients worldwide. And it’s moving up the value chain: from basic coding projects a decade ago to now handling advanced work in artificial intelligence, fintech, and smart manufacturing. A recent Bloomberg report highlighted that Vietnam’s ambitions in cutting-edge fields like AI hinge in part on its growing tech champions. In short, Vietnam’s tech sector is booming domestically and gaining recognition globally.
Let's illustrate the state Vietnams hi-tech sector has reached meanwhile by presenting two examples
7 FPT Corporation: A Homegrown Tech Giant
No discussion of Vietnam’s software sector is complete without FPT Corporation, the country’s largest and most influential technology company. Founded in 1988, shortly after the Đổi Mới reforms, FPT started from humble beginnings (its early name was “Food Processing Technology,” reflecting an initial focus that quickly shifted to IT). Over the decades, FPT grew in tandem with Vietnam’s economy, and today it stands as a homegrown multinational tech services powerhouse. FPT Software, the primary IT arm of the conglomerate, now employs over 27,000 professionals in 28 countries worldwide. In 2022, FPT Software recorded about $803 million in revenue – a massive figure for a Vietnamese company – and it continues to grow rapidly.
FPT provides a wide range of services including software development, systems integration, digital transformation consulting, AI and data analytics solutions, cloud services, and more. It has built up strong research & development capabilities and has formed partnerships with global tech giants like Microsoft, AWS, and IBM. Impressively, FPT counts 89 Fortune Global 500 companies among its 1,000+ clients around the world. In other words, many of the world’s biggest firms (spanning aviation, finance, healthcare, manufacturing, etc.) entrust critical IT projects to teams in Vietnam. This speaks volumes about how far Vietnam’s tech sector has come.
The success of FPT has had a multiplier effect on Vietnam’s tech ecosystem. It demonstrated that a Vietnamese company can compete at world-class levels, which has inspired countless start-ups and IT graduates. FPT also actively invests in education (running a university and technology institutes) to keep the talent pipeline strong. In recognition of its leadership, Gartner has named FPT as a leading IT services provider in the Asia-Pacific region. FPT’s story essentially mirrors Vietnam’s story: from very modest beginnings to competing on the global stage through vision, skill development, and integration with the global market. For the business community, FPT is a case study in how Vietnam can produce companies that are not just low-cost outsourcers, but true innovation partners.
8 Finative: A New Fintech Innovator
At the other end of the spectrum from FPT’s giant stature, we have emerging start-ups like Finative – illustrative of the new wave of tech entrepreneurship in Vietnam. Finative is a Hanoi-based fintech and IT consulting start-up, founded in 2021. In just a few years, Finative has grown to around 50–200 employees and carved out a niche in providing digital solutions for banks and financial companies. As Finative describes its mission: “we help banks and fintech companies across APAC and Europe accelerate digital transformation through tailored IT solutions.”. This means a company in Vietnam is building and implementing advanced software for banks not only domestically but also for international clients – a remarkable fact that underscores Vietnam’s global reach in tech services even at the start-up level.
Finative’s work involves modern banking technologies such as core banking system integration, mobile banking apps, and leveraging platforms like Temenos (a popular global core banking software). Essentially, they are helping traditional banks modernize their tech stacks and digital customer experience. That Finative can export such high-tech services from Vietnam to clients as far as Europe shows the credibility Vietnamese tech firms have attained. It also highlights the fintech boom in Vietnam: digital payments, online banking and financial tech are a hot sector, supported by a young, tech-savvy population at home. Dozens of new fintech start-ups (in e-wallets, online lending, etc.) have sprung up, and firms like Finative support both these fintech companies and established banks in their digital journeys.
While Finative is still small compared to FPT, it provides colour to Vietnam’s story by demonstrating the entrepreneurial energy in the tech sector. Founded by local tech professionals (some likely with overseas experience), Finative represents the new generation of Vietnamese start-ups aiming for global markets from day one. Its presence in Hanoi’s growing tech scene also indicates that innovation is not only confined to Ho Chi Minh City (Vietnam’s commercial capital), but is nationwide. As Vietnam continues to develop its start-up ecosystem (with incubators at major universities, innovation hubs, and events like Techfest), we can expect many more “Finatives” to emerge – small start-ups with big ambitions to serve the world.
9 In a nutshell
Vietnam’s journey from a war-torn, impoverished land to a thriving tech-enabled economy is one of the most compelling development stories in recent memory. The roots of this success are multifaceted: a history that necessitated resilience and bold reform, a culture that prizes education and hard work, a demographic edge with a young population, and savvy engagement with global trade and investment. Vietnam leveraged these factors to become a manufacturing export powerhouse in the 2000s and 2010s – and now, in the 2020s, it is leveraging them to climb into higher-value sectors like software, digital services, and innovation. Its economy continues to boom at ~6–7% growth, outpacing many developed countries by a wide margin.
So, is Vietnam the new Silicon Valley? Probably not in the literal sense – Silicon Valley’s unique ecosystem is hard to duplicate. However, Vietnam has certainly become a Silicon Valley of Southeast Asia in terms of vibrant tech activity and start-up growth. Some have dubbed it Asia’s next tech frontier or a “Silicon Delta,” capturing the idea that Vietnam is a rising regional tech hub. Vietnam’s software industry and start-up scene, exemplified by giants like FPT and newcomers like Finative, show that the country is capable of both delivering world-class IT services and fostering innovation on its own soil.
For the international business community, the implications are clear. Vietnam is no longer a remote afterthought – it’s a place of opportunity, whether for investment, partnerships, or sourcing talent. The Vietnamese government’s vision is to have a digital economy accounting for a significant share of GDP by 2030, and current trends suggest they are on track. Challenges remain (infrastructure needs, higher education quality, global economic fluctuations), but if Vietnam sustains its reforms and investment in human capital, its “little tiger” economy may grow into something even more formidable.
In conclusion, Vietnam’s rise is a testament to how a country’s history and culture can fuel a turnaround when combined with openness to outside influences. It may not be the next Silicon Valley just yet, but it has undeniably earned its status as a booming Asian tech and business hotspot. The remarkable progress of this once-overlooked nation is indeed something the world – and especially business leaders – should pay attention to. Vietnam’s story shows that even from the darkest of histories, a bright and innovative future can emerge.
10 Sources
- Vietnam Briefing – Why Is Vietnam’s Economy Growing So Fast?
- World Bank – Press Release March 12, 2025: Vietnam Economic Update
- Vietnam News (VNS) – “Vietnam’s path to sustainable poverty reduction”
- Intereconomics (German Economic Institute) – “Germany’s economy stagnated…”
- Coaio (Tech firm blog) – “Overview of Vietnam’s Software Industry”
- Coaio – “Top Software Firms in Vietnam (2025)”
- HIMSS – FPT Software Profile
- LinkedIn – Finative Company Info; Finative Job Posting
- Vietnam Investment Review – “Innovative start-up ecosystem garnering attention”
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