These 2 ASIAN superpowers are up and coming in tech – is this your time to invest and make your move?s
Following in the footsteps of neighbouring superpower India, Vietnam and the Philippines are the next up and coming markets that are within the radar of potential startup founders and investors.
Starting about a couple of years ago, Vietnam has seen for itself a proliferation of electronics factories that has set up their bases in its cities. Famous brands and companies include Samsung Electronics, Nokia, and Fuji Xerox. According to The Wall Street Journal, Samsung has even made Vietnam one of the largest offshore production bases for its Samsung Galaxy smartphones, and also contributed to 10% of Vietnam’s exports. The introduction of such large tech organisations, especially since the entrance of Intel back in 2010, has started to change the tech industry landscape of the nation that was once dominated by textile and agricultural exports.
The low cost of labour is also one of the main reason for the huge inflow of foreign tech companies setting their manufacturing bases in Vietnam. Besides the inexpensive labour, there is also a greater emphasis placed on computer science in the education system in Vietnam, which helps contribute to a pool of talent that such tech companies can tap into. In fact, one of Google’s engineers was impressed by the nation’s students when he dropped a visit to Vietnam, to see that primary school students have already started learning computer informatics at such a young age.
The government has also tried to promote the inflow of foreign investors in a bid to improve and upgrade Vietnam’s infrastructure, and also help boost their growing technology sector. Just this year, Vietnam’s Premier has announced plans to devalue the dong, and at the same time increase the foreign ownership limit in banks to help facilitate foreign investor’s activities in the nation.
Besides such government initiatives, the tech startup scene in Vietnam has also started to flourish, with the introduction of incubators, training institutes, co-working spaces, and many startup-centric events for the community specifically prevalent in Ho Chi Minh City and Hanoi.
However, there are still restrictions in Vietnam, especially when it comes to certain media regulations where the government recently had a crackdown.
The Philippines is now one of the region’s fastest-growing economies, with a huge population that are extremely active on social media (with 83 per cent social media penetration as compared to the United States which is less than half of Philippines). Although the infrastructure might not be as developed yet, the nation has since seen a spike in startup activity and is showing great potential to be a tech hub in Asia. E-commerce, social entrepreneurship, and transportation are some of the main industries startups partake in.
According to the World Startup Report, Philippines appeals to potential business founders due to low operation costs, a huge market with low barriers to entry, and a high level of English proficiency among its citizens. In addition, the country has also received investment upgrades this year which strengthens the fact that the country is stable and reliable, attracting the inflow of foreign investments.
However, as Philippine’s tech scene is still in its growth stage, the availability of seed funding from domestic investors is very minimal and to even find greater amounts of grants is, as according to the World Startup Report, is ‘virtually non-existent’. Furthermore, the Philippines suffers from brain drain, where skilled labour tends to pursue career and business prospects outside of the country.
While the prospect might seem daunting at first, technopreneurs should spend some time in both countries to have a feel of the tech scene – making some friends among locals might open up unprecedented opportunities, or give you the chance to tap into a base of qualified tech professionals who can share a wealth of local insights, and serve as a source of affordable freelance assistance as you expand operations.