Vietnam’s Tech Leap: The Data Behind Its Rise as a Global Tech and AI Front-Runner

What Fortune 500s once kept to themselves, Vietnam is now making accessible to everyone. For decades, India, China, and Eastern Europe defined global outsourcing—but today, the data shows Vietnam has quietly overtaken expectations to become the world’s next powerhouse in AI and technology services.

At vitX, we unlock your competitive advantage with large talent pools, cost-effective solutions, and reliable outcomes – previously exclusive to the largest corporations. Our innovative approach ensures that businesses of all sizes can access the resources and expertise needed to thrive in today's competitive landscape. And Vietnam is our choice. Here is the data-backed why.

For years, the global IT outsourcing landscape was dominated by a few key players: India, China, and Eastern Europe. However, the map is rapidly shifting. Today, Vietnam is no longer an “emerging” contender; it has firmly established itself as one of the most compelling destinations for building and scaling technology teams. This transformation is not a quiet evolution but a visible and powerful trend reshaping the industry.

Outsourcing to Vietnam is more than just a cost-saving measure; it’s a strategic move that offers a unique blend of world-class technical talent, strong STEM foundations, cultural compatibility, and a booming tech ecosystem. This combination positions Vietnam as the new front-runner in the global IT outsourcing race.

Outsourcing to Vietnam: The next global trend in the IT industry!

Vietnam IT Outsourcing Market Growth (2022-2028) - Projected to reach $1.28 billion by 2028 with 16.38% annual growth rate

The Compelling Case for Vietnam: A Data-Driven Overview

What sets Vietnam apart? It’s the convergence of several key factors that create a powerful value proposition for businesses of all sizes. From its young, highly skilled workforce and globally recognized programming excellence to unwavering government support, modern infrastructure, and widespread English proficiency, Vietnam offers a rare opportunity: enterprise-grade outcomes at startup-friendly budgets. In other words, Vietnam doesn’t just compete; it levels the playing field, giving even smaller firms access to the kind of large, skilled teams that were once reserved for Fortune 500s.

1. Unbeatable Cost-Effectiveness Without Compromise

Vietnam offers highly competitive costs, making it an attractive outsourcing destination. Companies typically save 15-50% compared to neighboring countries like Thailand, Philippines, Malaysia, China, and India. Unlike other low-cost regions, Vietnam combines affordability with high-quality tech expertise, making it a unique value proposition for global companies. Thanks to government incentives, including 15-year tax holidays, and low overhead, Vietnamese providers pass on significant savings to their clients.

Senior developer hourly rates by region (2025)

Based on 15+ sources (including vitX direct experience)

As the chart above illustrates, the cost savings are substantial, especially when compared to Western countries. This allows companies to extend their runways, scale their teams faster, and invest in other critical areas of their business.

2. A Powerhouse of Skilled IT Talent

Vietnam’s talent pool is not just large; it’s also highly skilled and globally recognized. In the Coursera Global Skills Index 2020, Vietnam ranked 2nd in the Asia Pacific region and 22nd globally for technology skills, a testament to the country’s strong STEM education and specialized IT training programs [2]. This ranking places Vietnam ahead of many established and emerging tech hubs, highlighting the exceptional quality of its workforce.

Vietnamese developers are particularly adept in operating systems, artificial intelligence, computer networking, and human-computer interaction, among many other skills. This expertise is a direct result of a strong emphasis on STEM education and a growing number of IT-specialized schools and universities.

See below the data on the educational outcomes as compared to other countries.

Vietnam, with a GDP PPP per capita of ~$11K, scores 519 on harmonized education tests, surpassing countries like India (399), the Philippines (326), Indonesia (384), and even top regions in China (441). It ranks alongside high GDP economies like the USA (512), Canada (535), and Japan (538).

Vietnam’s education system is producing a new generation of problem solvers. This workforce is not only cost-effective but also ready for rapid learning and high-quality output. In emerging tech fields like AI, everyone starts on an equal footing.

Number of IT Engineers in Vietnam (2025)

Data based on 5 different sources, including Vietnam General Statistics Office 2025 ISB Vietnam Market Landscape Report

3. A Thriving and Abundant Tech Ecosystem

Vietnam’s IT outsourcing industry has been growing at a double-digit pace annually, with the IT outsourcing market projected to reach $698 million USD in 2024 and growing at an impressive annual rate of 16.38%. The broader IT services market is expected to reach $2.07 billion in 2024 and continue its strong growth trajectory.

The Digital Economy Strategy for 2025-2030 targets a total of 1.5 million IT professionals, which already represent the highest IT graduate-to-workforce ratio in the ASEAN region at 12%, compared to the average of 6-7%.

This abundance of talent ensures that companies can find the right skills for their projects, from enterprise systems and AI to backend, frontend, mobile, and full-stack development.

According to the Global Skills Index 2020 published by Coursera, Vietnam’s technology workforce is second only to Singapore in overall technology skill proficiency among all Asia Pacific countries. This places Vietnam ahead of advanced economies such as Japan (#3), Hong Kong (#4), and South Korea (#5), as well as notable outsourcing rivals like Thailand (#6) and Malaysia (#7).

The Global Skills Index assesses millions of learners globally based on benchmarked assessments in technology, business, and data science. Vietnam’s 2nd position underscores the quality of its IT education, the depth of its developer ecosystem, and the effectiveness of national initiatives to advance STEM capability.

Vietnam’s rapid rise shows an ability to leapfrog competitors, a trend reinforced by its double-digit IT industry growth rate (16.38% CAGR).

4. High English Proficiency for Seamless Communication in IT

Effective communication is critical for successful outsourcing, and Vietnam excels in this area. In the 2024 EF English Proficiency Index, Vietnam ranked 8th in Asia out of 23 countries, with a moderate proficiency score of 498, which is above the global average [6]. The EF test’s broader reach now includes candidates from smaller, less urbanized provinces, affecting Vietnam’s national average. Nonetheless, English proficiency in the IT sector continues to maintain higher standards, especially among staff working directly on international projects ensuring smooth collaboration and clear communication between clients and their outsourced teams. The fact that English communication is now a standard recruiting filter for IT outsourcing, with most developers at least “upper intermediate” or “B2” according to the CEFR scale (generally considered an EF EPI range of 500–600).

Country	EF EPI Score	Global Rank	Proficiency Band
Poland	588	15	High
Philippines	578	20	High
Malaysia	568	27	High
Vietnam	498	63	Moderate
India	490	69	Moderate
China	464	84	Low

In practical IT outsourcing terms: you can expect Vietnam teams to consistently deliver clear written and technical English, with ongoing progress in live communication and an overall level that meets or exceeds the requirements for complex international software delivery.

Bottom line - For most global clients, Vietnam’s IT workforce now offers English communication capabilities that match or surpass those typical of India and are well above China, but still trail the Philippines and Poland for native-like fluency and accent neutrality

5. Cultural Compatibility and a Collaborative Work Ethic

Vietnam’s work culture is a unique blend of Eastern and Western influences, a legacy of its history of wars and persistance. This cultural adaptability makes for smooth and effective collaboration. The work culture emphasizes teamwork, respect, and a strong commitment to meeting deadlines. Vietnamese professionals are known for their dedication, passion, and hands-on approach to problem-solving. Their collectivist culture fosters a strong sense of teamwork and respect for leadership, making them highly collaborative and a pleasure to work with.

6. A Stable and Supportive Business Environment

Vietnam stands out for its political stability and pro-business government. The country’s robust economic growth and safe sociopolitical climate minimize risks for long-term engagements. The government actively supports the IT sector through investments in education, infrastructure, and favorable policies. Vietnam established its largest-ever technology investment with the National Data Development Fund in 2025. This fund specifically supports AI, big data, machine learning, cloud computing development, IoT infrastructure and blockchain technology.

Modern infrastructure, including ubiquitous internet access and state-of-the-art tech parks, ensures that your teams have the tools they need to succeed.

Vietnam’s tax breaks and operating incentives make it one of the most attractive environments in Asia for IT, software, AI, and tech-enabled service businesses—with multiple, overlapping fiscal supports for new projects, global partnerships, and advanced R&D work.

Conclusion: Vietnam is Your Strategic Advantage in a Competitive World

Vietnam offers a compelling and data-backed proposition for IT outsourcing. It’s a rare combination of top-tier talent, significant cost savings, exceptional quality, cultural compatibility, and a stable business environment. By choosing Vietnam, you’re not just cutting costs; you’re gaining a strategic partner poised to grow with you and committed to your success.

As the data clearly shows, Vietnam has transitioned from an “emerging” outsourcing location to a front-runner. For forward-looking companies, it has become the ideal destination to build and scale technology teams, leveling the playing field and providing access to the kind of skilled talent that was once the exclusive domain of large enterprises.

When compared to other major outsourcing hubs such as India, Eastern Europe, and Latin America, Vietnam offers a uniquely balanced proposition that meets diverse client needs while mitigating risks—making it a smart, future-proof choice for your next IT outsourcing project.

Unlock your Vietnam advantage with vitX and gain a competitive edge in the global market.

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References (not exhaustive)

[1] Ken Research. (2024). Vietnam IT Outsourcing Market Outlook to 2030. Retrieved from https://www.kenresearch.com/industry-reports/vietnam-it-outsourcing-market

[2] Coursera. (2020). Global Skills Index 2020. Retrieved from https://www.coursera.org/skills-reports/global

[3] Vietnam Plus. (2025, January 3). IT outsourcing fetches nearly 700 million USD. Retrieved from https://en.vietnamplus.vn/it-outsourcing-fetches-nearly-700-million-usd-post307775.vnp

[4] Mordor Intelligence. (2025). Vietnam IT Services Market Size, Share & 2030 Growth Trends Report. Retrieved from https://www.mordorintelligence.com/industry-reports/vietnam-it-services-market

[5] Coaio. (2025, August 22). Vietnam Software Industry Growth: Key Statistics and Outsourcing Opportunities. Retrieved from https://coaio.com/ask/vietnam-software-industry-growth-key-statistics-and-outsourcing-opportunities/

[6] EF Education First. (2024). EF English Proficiency Index - Vietnam. Retrieved from https://www.ef.com/epi/regions/asia/vietnam/