Microsoft's Gates Sees Vietnam Outsourcing Potential

Microsoft Corp. Chairman Bill Gates said Vietnam has the potential to develop as an outsourcing center similar to India, during the first visit by the world's richest person to the Southeast Asian nation.

Gates, 50, met Vietnamese Prime Minister Phan Van Khai and President Tran Duc Luong in Hanoi, before crossing town to take questions from students at the Hanoi University of Technology. The visit by the founder of the world's biggest software company takes place two months after Intel Corp., the world's biggest semiconductor maker, said it would build a plant in Vietnam.

While the U.S. government says infringement of intellectual property rights is rampant in Vietnam, the nation of 84 million people is attracting the attention of global technology companies, lured by economic growth exceeding 8 percent a year and an estimated literacy rate of at least 90 percent.

"It's great that Intel is coming here, and no doubt that other information-technology manufacturers will see the kinds of skills'' in Vietnam, Gates said in Hanoi today. "But in no sense should Vietnam specialize in manufacturing. Vietnam should also focus on software development, outsourcing. There's an opportunity to do call centers."

Citing the example of India, Gates said "hopefully Vietnam can also be a country that grows the capacity to supply skills to other countries, including the U.S."

Later in the day, during a visit to the largely rural province of Bac Ninh, east of Hanoi, Gates noted"the Asian miracle" of rapid economic growth that has boosted the standard of living in countries throughout the region.

List of Miracles

"Over the next decade, Vietnam will join the list of those miracles, and provide all the advances that come with that development," Gates told a crowd of journalists, local officials and curious locals. "Microsoft is committed to playing its role by making a broad set of investments in the country.''

The estimated value of Vietnam's industry for software- related and information technology-related services was $170 million in 2005, with the industry growing at an annual rate of about 40 percent, the Vietnam News reported today.

Vietnam now has about 600 software-development companies employing 15,000 workers, up from 170 companies employing 5,000 in 1999, according to the report.

"There are two factors in Vietnam's favor,'' said Nguyen Dang Tien, vice-chairman of Ho Chi Minh City-based software company Diginet Corp., which was founded in 1996 and has about 150 employees. "We have the overseas Vietnamese coming back, and they have skills and experience they gained outside the country. And we have a young population, and they learn fast.''


Still, about 92 percent of software in Vietnam was pirated as of 2004, the highest rate in the world, according to the Business Software Alliance, a trade group funded by Microsoft.

"Piracy of copyrighted works and trademark counterfeiting remains rampant throughout Vietnam,'' the Office of the U.S. Trade Representative said in a 2005 report.

At Vietnam's last round of talks on joining the World Trade Organization, held last month in Geneva, members of the working party on its accession bid asked questions on the timetable for Vietnamese regulations to implement intellectual property laws, according to a summary from the WTO.

Today, the Redmond, Washington-based company signed what Gates called a ``milestone'' accord with Vietnam's ministry of finance, in which the ministry would become the first state body to use fully licensed software throughout its entire information technology system, according to a finance ministry press release.


"This confirms the government's commitments in intellectual property protection, as we approach international integration and becoming a full member of the WTO,'' the ministry said.

Lenovo Group Ltd., China's largest personal computer maker, said this month that it would buy $1.2 billion of Microsoft's Windows software over the next year as part of efforts to curb piracy of the world's most-used operating-system software.

Earlier this week, Gates met with Chinese President Hu Jintao during Hu's visit to the U.S. Hu said China has an interest in upholding intellectual property rights commitments because the world's most populous nation doesn't see itself solely as a center for manufacturing, Gates said.

"Throughout Asia, and particularly here in Vietnam, we have seen great economic development, and the opportunity to create high-paying jobs is strong,'' Gates said. "The key element is talent.''

To contact the reporter on this story: Jason Folkmanis in Ho Chi Minh City This e-mail address is being protected from spambots. You need JavaScript enabled to view it \n


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