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Outsourcing Vietnam

In: Business and Management

Submitted By ninerseries
Words 1610
Pages 7
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Vietnam, a prominent future of US outsourcing and offshoring
In the last decade, many major corporations and small companies in the United States relied heavily on outsourcing and offshoring to foreign countries such as Vietnam. According to U.S consultancy group, Vietnam ranks as one of the ten most attractive off shoring and outsourcing destinations in the world. IT companies are constantly under pressure to produce software products more efficiently within tight budgets. Vietnam’s outsourcing agenda was aimed to greatly reduce labor costs, manufacturing or production expenses, and administrative service fees. Vietnam has been viewed as a potential alternative for U.S companies seeking to establish a lower-cost manufacturing capacity. The increasing costs of labor in China and rising Chinese taxes on foreign enterprises has forced many U.S firms to expand its long-term operations in Vietnam. Within the last five years, Vietnam had become a more popular off shoring network than China and India. Vietnam has the second-highest gross domestic product growth after China and now the third-largest offshore network destination in Southeast Asia. The Vietnamese labor pool consisted of an estimated 80,000 plus IT graduates. More than half of Vietnam’s population is under 25 years of age, and 83 percent of all graduates are science-based. “More foreign direct investment means fewer programmers available. To cope, his firm has shifted some work to Vietnam…” (Economist 72)
Outsourcing software development is the driving economic force of emerging companies. Offshore development may include software programming, web design, website, application testing, and more. China and India had been the popular industry leaders in offshore development, but despite their mutual market share in software development, Vietnam is quickly emerging as the next hotspot destination

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