The digital workforce behind Vietnam’s manufacturing industry boom

Vietnam has seen impressive economic progress since joining the World Trade Organization in 2007 laying the foundation for Vietnam’s ambition to become a top South East Asian economic power. Its economy is expanding rapidly and main observable reasons of this expansion are foreign direct investment (FDI), a strong manufacturing industry, and a developing technology sector.

The rising cost of labor in China has led many foreign corporations to shift their production contracts to Vietnamese companies. The textile and electronics manufacturing industries, in particular, are where this trend is most apparent. Vietnam has emerged as a top destination for IT outsourcing, drawing in global tech firms searching for undiscovered talent.

A synergistic interplay between Vietnam’s human capital advantages—particularly a young, digitally skilled workforce—and the structural cost benefits inherent to its manufacturing sector has position the country as an important hub in the reconfiguration of global supply dynamics. Notably, Cushman & Wakefield has designated Vietnam as the world’s top business process outsourcing (BPO) location. Because of this, Vietnam's software sector—and the number of software engineers—is experiencing significant growth.

However, Vietnam's economy faces both benefits and drawbacks from the development of automated technologies. Although Vietnam’s corporate sector is emerging as a critical innovator in these technologies, AI & automation may disrupt labor structures in particular industries. Balancing the scale of workforce expansion with the velocity of technological change underscores a central governance challenge for the state.

Vietnam has a remarkable economic trajectory, driven by its manufacturing industry, foreign investment, and technology. To ensure long-term prosperity, the country must carefully chart its course while facing obstacles in the areas of automation, sustainability and infrastructure development.