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IT expert predicts VN industry will grow 30%
Patrick McGovern, Chairman of International Data Group, which has provided communications and technology products and services for 120 million customers in 95 countries, paid an annual visit to Viet Nam to attend an IT exhibition. Viet Nam News reporter Vu Hoa talked with him about the group's plans.
What is your assessment of Viet Nam's IT development?
We often have studies and assessments on IT market growth rates. The world's average rate is around 20 per cent and Viet Nam achieved that.
Over 16 years of operation in the country, we have found that Viet Nam has made an obvious advance in ICT development as well as e-commerce.
However, the most impressive development is in the communications sector.
Its number of mobile phone subscribers is five times higher than fixed ones. New technologies including third generation (3G) and upcoming fourth generation (4G) have made positive strides.
The group forecasts Viet Nam will be in a list of countries which have leading ICT developments.
What are Viet Nam's strengths to attract foreign ICT businesses?
It is notable that there is a wave of big ICT enterprises looking for new and more suitable business environments. Mainland China is a market with several ICT production activities with high growth rates, resulting in a rapid wage increase of 25-40 per cent a year.
The increase rate in India was three times higher, at 25-30 per cent. Wage levels in the country are also three times higher than those in Viet Nam. This affects profits for investors and producers. They move their factories out of countries and find new markets.
The world's leading IT company, Intel, poured US$1 billion into the country.
Viet Nam is one of the most attractive investment destinations with a favourable environment and policies as well as hard-working human resources. They are young and well-educated, with skills, determination and enthusiasm. Moreover, training fees for Vietnamese people are lower than other countries. I think Viet Nam's ICT future growth rate would be 20 to 30 per cent.
How does your group plan to accelerate investment here?
Viet Nam is among countries which we give priority to in ICT investment. We carried out studies and the group achieved a yearly growth rate in Viet Nam of 35 per cent.
Advisors provided positive forecasts of Viet Nam's ICT market. We believe its ICT development rate will be measured by the rate of new products.
IDG Viet Nam has expanded into IDG Indochina Group. We organised 17 conferences and seminars annually. We planned to expand to Indonesia and Singapore.
We always encourage and support the establishment of new companies to shorten the time of bringing products from laboratories to markets.
IDG Venture Viet Nam Fund, established in 2004 with a total capital of $100 million, invested in four such Vietnamese companies. Asset growth rate of the fund was 38 per cent a year. This has been the first venture fund in ICT Viet Nam.
Next year, we will establish the second fund with a total investment of $150 million. It is expected that by 2012, we will establish a $250 million development fund to support companies in their first two years of operation to expand their production. Total investment from IDG in the market will be $400 million.
In addition, the development fund will give support to businesses in the healthcare and retail sectors. We also plan to bring more ICT publications into the market, including special ones for CEOs and CIOs.
What is the criteria for the group to choose companies eligible for support from the funds?
We normally choose companies based on market demand for products, capital return capacity and time. In addition, we also consider their long-term development capacity and their human resources as well as existing assets.
The Vietnamese Government is building a project to turn Viet Nam into a powerful ICT country by 2020. So what direction should the country follow?
A study showed that as much as 40 per cent of a country's GDP growth rate is due to education and training activities. I think Viet Nam should focus on ICT training and education to help the younger generation use and create complicated and sophisticated ICT products and services. It will also promote ICT domestic consumption.
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