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A New Era of Digital Partnership Between Vietnam and Japan

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The Vietnam-Japan Digital Transformation Association (VADX JAPAN) officially launched in Tokyo, marking a new chapter in the digital cooperation between the two nations. The association aims to connect Vietnamese businesses in Japan’s information technology (IT) sector and foster collaboration in sharing advanced technology initiatives and solutions.

Image credits: Nhan Dan

Ambassador Pham Quang Hieu highlighted the rapid growth of Vietnamese IT enterprises in Japan since the first company established a branch there in 2005. Now, over 60 Vietnamese IT companies are operating in Japan. The establishment of VADX JAPAN is a significant milestone in this development, underscoring the growth in reputation, quality, workforce scale, revenue, and future opportunities for Vietnamese IT enterprises in Japan.

He expressed his hope that the association will help Vietnamese IT enterprises advance further and play a leading role in promoting digital transformation and contributing to bilateral cooperation for the benefit of both countries.

VADX JAPAN Chairman Do Van Khac emphasised that the association aims to be a hub connecting businesses involved in digital transformation and innovation. It also seeks to facilitate the exchange of technological initiatives and solutions between Vietnam and Japan. This platform will provide ample opportunities for IT enterprises from both countries to collaborate, significantly enhancing the quality of the IT workforce, which is currently in short supply in Japan.

The association plans to organise activities that promote innovation, technology transfer, research and development, and the application of advanced digital technologies for its members. In terms of human resources development, VADX JAPAN aims to build a contingent of tens of thousands of high-quality engineers in Japan and hundreds of thousands of proficient Japanese-speaking engineers in Vietnam.

This effort is intended to help alleviate Japan’s projected labour shortage, which is estimated to reach nearly 800,000 people by 2030, according to the Ministry of Economy, Trade, and Industry of Japan.

VADX JAPAN’s assessment indicates that Japan’s demand for software development outsourcing is estimated at over US$ 30 billion annually, while Vietnamese IT enterprises currently hold only a 6-7% market share. Thus, the potential and long-term opportunities for Vietnamese IT businesses in Japan remain substantial.

The association has set an ambitious goal of achieving a total revenue of 1 trillion JPY (approximately US$ 7 billion) for Vietnamese IT enterprises in Japan by 2033. This target reflects their aspiration to become a reputable and strong organisation that significantly contributes to the digital and green transformation of both countries.

OpenGov Asia reported in December 2023 that Vietnamese and Japanese experts convened in Hanoi to explore potential solutions for enhancing collaboration in their digital economies. The forum, titled “Digital Economy Partnership under Indo-Pacific Economic Framework for Prosperity (IPEF): How should Japan and Vietnam Cooperate?”, was organised by the Central Institute for Economic Management (CIEM) in collaboration with the Graduate School of Public Policy at the University of Tokyo.

The leaders of both nations agreed to collaborate on developing digital government, digital economy, digital society, and emerging core industries such as semiconductors. They recognised the importance of promoting the free flow of data across borders, fostering digital connectivity, and strengthening trust among consumers and businesses in the digital economy. Cooperation will also extend to smart power grids, smart cities, power market development, and the localisation of the energy industry.

Furthermore, the two governments will work together on sustainable development goals, climate change mitigation, natural disaster risk reduction, and other environmental initiatives. Japan has pledged ongoing support for Vietnam in research, technology transfer, and health-related human resources training, facilitating this cooperation through initiatives like Medical Excellence Vietnam (MEV).

These initiatives highlight the importance both countries place on bilateral cooperation, as they aim to officially elevate their relationship to a comprehensive strategic partnership for mutual prosperity.

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