Companies relocating their production from China has been underway since the US-China trade tensions. And now, Covid-19 is accelerating that process. While countries like India race to become the next manufacturing hub for these companies, Vietnam has emerged as a strong contender to win big in the post COVID-19 world. Over the past 2 years, Vietnam has been steadily rising the ladder to become a leading exporter of electronics.
Low-cost labour, robust supply chain and significant government support are some of the key attributes supporting Vietnam’s rise as a manufacturing hub. Major companies including Nike, Adidas, Samsung, Foxconn are few giants that have shifted their factories and research centres to Vietnam. Apple recently hired a range of talents from engineers to operating managers to scale their capabilities in Vietnam.
Young population and large workforce
Vietnam is well known for its youth population with more than 52% of people in working age and about 97% of the working age population is literate. With this abundance of young labor force, Vietnam is leading all the way to fulfill world’s demand for different products. Draup’s research indicates that there are over 52,000 manufacturing talent relevant for Hi-tech industries like electronics and industrial automation. With over 200,000 rich and diverse digital talent skilled in the areas of cloud, AI and IoT, companies to achieve Manufacturing 4.0 goals.
Vietnam’s low-labour cost is one of the prime criteria that is forcing companies to shift their production from China and evade the latter’s rising labour costs. Draup’s talent cost analysis indicates that the Median salary of manufacturing jobs in Vietnam is $7000 per annum. This is nearly half of the labour cost in China.
Vietnam is investing heavily in infrastructure, such as roadways and ports, to provide an efficient logistics environment for investors. Over the past 5 years, Vietnam’s infrastructure spending growth was among the fastest in ASEAN. With a large-scale port development projects across the country, foreign investors have shown interest in enhancing the logistics capabilities of Vietnam.
Government regulations and initiatives
Supportive policy and regulatory framework have aided Vietnam to gain the desired competencies. Tax exemptions, special economic zones, infrastructure development projects are some of the key government initiatives that pull the companies to setup their production facility. Vietnam has also signed a handful of bilateral and multilateral trade agreements including free trade agreements. The government has also initiated action plan to meet the skill demand of high-tech industries by increasing vocational and technical training schools and courses.
Draup conducted a comprehensive location and talent intelligence study on Vietnam to understand the country’s Manufacturing talent pool, skill sets and labour costs. Our study also incorporates analysis of other dimensions such as Ecosystem maturity, Policies, Universities, and infrastructure.
Download the report to get an overview of Vietnam for Hi-Tech Manufacturing Talent Analysis as you plan to de-risk your supply chain operations.