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Business

Vietnam's FPT to send 10,000 engineers to Japan

FPT Software's development center in Hanoi, Vietnam

TOKYO -- Vietnam's largest software developer, FPT Software, will send 10,000 Vietnamese development engineers to Japan to learn skills needed to mediate between Japanese companies and FPT software development bases in Vietnam. The move is aimed at boosting competition against Chinese rivals bidding for Japanese orders.

     The software engineers being chosen for the role are those familiar with Japanese language and business practices. They will be charged with discussing details of new systems with Japanese clients while leading software development teams back in Vietnam.

     These software engineers will be essential for winning more orders from Japan, as many Vietnamese engineers cannot speak Japanese. FPT software currently has roughly 700 software engineers that play the role of bridging cultures but plans to add 10,000 more by 2018. The company says that if it has 10,000 such system engineers, it can take on jobs for 150,000 engineers from Japan.

Mutual benefits

The plan will also help Japan's IT industry, which is currently suffering a lack of manpower after the government introduced a common number system for taxation and social security and a large system integration within financial institutions.

     FPT software will train half of the new engineers in Vietnam before sending them for training in Japanese companies, while the other half will be sent to study at language school in Japan for about seven months. To help achieve its goals, FPT software has partnered with Meros Language School in Tokyo. The Vietnamese company plans to send 50 engineers to the school in April 2015, 200 in July and 250 in November.

     The program is also open to Vietnamese engineers from companies other than FPT. A move by Truong Gia Binh, Chairman of FPT Software's parent company FPT, aimed at boosting the entire Vietnamese IT industry.

     Program participants will pay their own living costs while in Japan, expected to total about 1.7 million yen ($14,589). FPT will offer student loans in conjunction with a Vietnamese bank, while also serving as a guarantor.

     The living cost is "worth one or two years' salary for a bridge software engineer working at a Vietnamese IT company," said an FPT insider. "But loan repayments will not be so much a burden" if they can land a future job in Japan.

     FPT will also create a system to pay for employees who are able to clear certain conditions.

     On the evening of Nov. 8, some 50 Japanese and Vietnamese IT workers chatted over Vietnamese cuisine at a golf course clubhouse in a suburb of Chiba Prefecture. Those in attendance included Vietnam's ambassador to Japan, Doan Xuan Hung, and senior officials from Japanese companies such as NTT Data, IT Holdings and Recruit Technologies.

     It was at this dinner that Binh revealed his plan to foster 10,000 engineers intended to serve as a bridge between Vietnam and Japan, taking the attendees by surprise. Hung said that the program will help develop both Vietnam and Japan, showing the Vietnamese government's willingness to support the program.

Bridging the gap

The Vietnamese IT industry's appeal is price competitiveness. The average monthly labor cost per engineer is 200,000 to 300,000 yen, just 20-40% of those in Japan. Software development costs are 40-60% cheaper than in Japan and 30-40% cheaper than in China.

     But language remains a problem. Vietnamese engineers are at a disadvantage compared to their Chinese counterparts, who share a similar writing system with Japan. FPT software's planned program is expected to overcome this weakness.

     Contributing to Vietnam's development through promoting the IT industry is Binh's lifework. Nicknamed "Vietnam's Bill Gates," Binh founded FPT in 1988 after receiving a doctoral degree from Moscow State University during the Soviet era.

     He has signed a deal to start a business to support agriculture with IT knowledge together with Fujitsu. He met the president of the Japanese electronics maker, Masami Yamamoto, in person and included Vietnamese government officials in discussions before closing the deal.

     Currently Chinese IT firms dominate software sourcing for Japanese companies but they have seen business grow sluggish in recent years due to soaring wages and deteriorating relations.

     But a recent summit between China's President Xi Jinping and Japan's Prime Minister Shinzo Abe, held for the first time in almost three years, has raised the hopes of Chinese IT companies. An official from a major Chinese IT company said that rising costs "have been absorbed thanks to companies' efforts to move inland and improve productivity." 

     However, Chinese human resources for Japanese IT contracts are reported to be in short supply as Chinese domestic demand has increased following launches of online shopping sites.

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