Vietnam: destination for R&D investment of tech giants
Competition is increasingly fierce, so tech giants are interested in investing in research and development (R&D) to maintain growth and beat their competitors.
In April 2022, during a meeting with the Vietnamese media, Serg Bell – the co-founder of unicorn start-up Acronis – said that after surveying Indonesia, Thailand, Malaysia, Myanmar, the company found that Vietnam was the best place in the region for a medium-sized R&D center.
In 2003, Serg Bell and two others founded Acronis, specializing in security, cloud storage and cybersecurity, best known for Acronis Cyber Protect software. Acronis became a unicorn in 2019 and two years later it was valued at $2.5 billion. Acronis has more than 2,000 employees with a network of 5.5 million home users, 500,000 companies and 50,000 partners and service providers in more than 150 countries.
The unicorn’s plan to invest $50-100 million for an R&D center in Vietnam is being implemented half a year earlier than its initial plan. Acronis has surveyed the construction site of the Acronis R&D Center, which is expected to be located in District 9, HCM City.
Cybersecurity expert Dr. Nguyen Duy Lan, co-founder of Veramine Inc. (USA) specializing in security, said that having a unicorn start-up related to this field setting up an R&D center in Vietnam is exciting news. This shows that Vietnam is a market for the security sector and that investors appreciate the quality of human resources.
Acronis R&D center in Vietnam is expected to have about 500 employees. Ten percent of senior personnel will be sent from centers in Bulgaria and Singapore, and 90% will be on-site personnel.
Many big technological companies have chosen Vietnam to base their R&D centers. Samsung’s $220 million R&D Center is under construction, expected to be completed this year and will house about 3,000 engineers.
Samsung hopes the research capacity of Vietnamese engineers will be enhanced, not only in the field of product development, but also in the fields of artificial intelligence (AI), Internet of Things (IoT), big data, and 5G networks, creating a premise for Vietnam to catch up with changes in the 4.0 industrial revolution.
Besides Samsung, many other technology firms have also chosen Vietnam as a R&D investment destination. Grab has opened its R&D center in Ho Chi Minh City. LG is expected to open the second R&D center in Da Nang. Panasonic and Toshiba also have R&D centers in Vietnam.
Most recently, Qualcomm announced its only laboratory in Southeast Asia, in Hanoi, focusing on 4G/5G radio waves, a research room to improve performance and battery for mobile devices and a room to simulate the network environment to serve US and European markets. Currently, this center has about 50 engineers, all of whom are Vietnamese.
The R&D centers in Vietnam of Qualcomm and Samsung are the largest research and development centers of these corporations in Southeast Asia, researching technology for projects around the globe.
With more and more R&D projects present in Vietnam, high-quality human resources will become the target of tech giants.
Tran Viet Hung, founder of Got It, said that high-quality human resources are the main important factor in building technology companies. As proof, he pointed out the moves of technology corporations in the world. A few years ago, Facebook spent $1 billion to buy Instagram, and then bought WhatsApp for $19 billion. At that time, WhatsApp had fewer than 60 engineers.
Mr. ST Liew, President of Qualcomm Southeast Asia, Australia and New Zealand affirmed that support from Vietnamese engineers has satisfied customers.
Tech giants believe that Vietnam will have more opportunities to train more experts in the technology industry. This will allow Vietnam to stay on track with its digital transformation ambitions. To attract high-quality personnel, tech giants have their own policies.
While major corporations around the world focus on investing in research and development (R&D), a recent survey by the Ministry of Science and Technology shows that most Vietnamese enterprises implement innovation through investment in new technology attached to goods, machinery, equipment or upgrading of existing technology and equipment, with very little investment in R&D.
Vietnamese enterprises spend only 1.6% of their annual revenue on R&D, lower than many countries in the region, such as the Philippines (3.6%), Malaysia (2.6%), and Laos (14.5%). The spending on science and technology (both public and private sectors) is also only about 0.44% of GDP, behind Singapore (2.22%), Malaysia (1.44%) and Thailand (0.78%).