IT firms fail to invest in R&D

Most Vietnamese IT firms have failed to make adequate investment in research and development due to limited financial capacity and a lack of skilled personnel, said HCM City Computer Association chairman Chu Tien Dung.
Most Vietnamese IT firms have failed to make adequate investment inresearch and development due to limited financial capacity and a lack ofskilled personnel, said HCM City Computer Association chairman Chu TienDung.

In the past 10 years, firms focused oncreating IT products to meet short-term market demands rather thanproperly investing in research and development (R&D), Dung said.

Domestic IT businesses that took on outsourcing work from foreignpartners found it difficult to make sufficient investment in R&Dbecause most of them were small and medium-sized, said Vietsoftwarechairman of the board Tran Luong Son.

Some of thecompanies realised the importance of R&D but due to insufficientfinancial capacity, their R&D investment had yet to bringsatisfactory results, he said.

While investing inR&D seems to be difficult for small IT firms, several largerenterprises have invested in R&D, resulting in new productiontechnologies and unique products that have played a decisive factor insharpening their competitiveness.

TMA Solutions, alarge software outsourcing company, recently opened its first R&Dcentre in the Quang Trung Software Park in HCM City toexpand its business in training, mobile service and business solutions.

Chairman of TMA Solutions Nguyen Huu Le said thecompany accepted outsourcing contracts from foreign companies over thepast 12 years and also executed R&D projects under contracts withforeign partners.

"To date, TMA has accumulated goodexperience in innovation technologies from these projects and we canproduce many items in Vietnam ," he said.

Mobileprovider Viettel also established an R&D centre to develop newtelecommunication equipment. The company has developed a USB withintegrated 3G, the VT1000-3G, and plans to put it on the market by theend of the year.

CMC Group has also announced that it will set aside 2 million USD to research or acquire new technology.

Establishing R&D centres in Vietnam , however, still faced taxbarriers and difficulties with equipment testing procedures, Le said,adding that it took his company three years to complete all relevantprocedures.

Le suggested the Government should offer incentives for R&D projects.

Dung agreed. He said that Vietnamese ICT companies were seeing bigopportunities in technology transfer from global IT companies as theymove their R&D centres to Vietnam to cut costs.

Several local outsourcing companies have seen a chance to receiveR&D centres from foreign partners. The centres brought comprehensivetechnology and increased profits for local outsourcing companies, henoted.

To encourage more enterprises to shift toR&D, Dung suggested the Government rethink its tax policy for ICTcompanies that invested in R&D projects or R&D labs./.

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