Engineering in Vietnam: new projects, opportunities, employers and skills required
We take a look at the opportunities for engineers in Vietnam: what skills employers are looking for and what kinds of engineering projects are planned or currently underway.
With over 95 million people and smaller than California at roughly 330,000 square kilometres, Vietnam has one of the densest populations in the world. This hasn’t stopped it transforming itself from one of the world’s poorest nations to what the World Bank describes as a ‘lower middle-income country’.
Its GDP per capita growth has been one of the most rapid across the globe, averaging 6.4 per cent a year during the 2000s and in 2015 had an estimated growth rate of 6.7 per cent. The World Bank says economic activity “moderated” in the first half of 2016 (industrial growth slowed down and agricultural production was hit by a drought) but GDP was still expanding by 5.5 per cent.
According to the General Statistics Office of Vietnam, 2017 is a pivotal year for the implementation of the five-year economic development plan 2016-2020 with many favourable socio-economic factors and a positive business environment creating confidence as well as a stable macro-economic situation.
In terms of improvements to infrastructure and construction, a great deal is going on. Quan Huynh, president and ceo of HR consultancy NVM Group and ceo of recruitment firm VIPSearch, explains the country has a robust infrastructure development plan to meet the demands of high urbanisation and the growing population.
“A poor current transportation system, the pressure to improve the roads, build the new bridges and develop more highways and subways becomes the necessity and priority,” he says. “And the government is now doing it with a lot of support from the World Bank, ADB (Asian Development Bank) and ODA (Official Development Assistance) funds from Japan.” According to Timetric’s Construction in Vietnam Key Trends and Opportunities 2021, construction has grown steadily and the industry registered a growth rate of 9.1 per cent in 2016.
Last year, the government launched a new rural building programme for 2016-20 which covers schools, hospitals, roads, water treatment facilities and related infrastructure. Meanwhile in the cities, Huynh reports that there are a lot of civil construction and condominium projects underway to meet the high demands of “staying, living, renting and doing business”. Overall, the government aims to increase housing per capita from 16.7 to 25 square metres per person. There are plans to build one million affordable houses by 2020, which is supported by programmes such as the Housing for Poor Rural Families.
At the other end of the scale, housing developments also include Vinhomes Central Park, inspired by the New York park of the same name, which aims to deliver a five-star city lifestyle on the Ho Chi Minh City riverfront. Still with construction, investment is also coming from countries such as Japan and Thailand on projects such as retail and shopping malls.
On the transport front, the Vietnam Railway Development Strategy 2020 aims to increase passenger and freight transport and the Ministry of Transport has proposed a plan to develop the North-South railways infrastructure. This includes building a dual-track broad-gauge line connecting Hanoi and Ho Chi Minh City, two express railways sections as well as upgrades to the existing railway.
On the roads, there are also aspirations to create a new 1,372km expressway linking the two cities and the government would like construction on this to begin no later than May 2019. Overall, it reportedly wants to expand the network of expressways from 2,500km in 2020 to 6,411 by 2030. With the aim of increasing trade volumes, the seaport areas are also a major focus for development and this will also drive infrastructure growth.
Without doubt however, one of Vietnam’s showcase megaprojects will be the new Long Thanh International Airport in the southern province of Dong Nai, which has been scheduled for construction to begin in 2021, but there are now calls to bring this forward to 2019.
According to Timetric, the government is focusing on the manufacturing sector to help fulfil its aim to become a fully industrialised and middle-income status nation by 2020. Under the Socio-Economic Development Plan 2016-2020, it is planning to support new start-ups and upgrade industries through various programmes and initiatives such as the Mekong Business Initiative, the Finland-Vietnam Innovation Partnership Programme and the National Technology Innovation Fund.
The technological infrastructure is also a focus of attention with the 2020 Broadband Plan launched in January 2016 to support development and growth as well as promote social and economic inclusion. Like many others around the world, Ho Chi Minh City aspires to become a smart city so a number of smart projects aim to tackle urban issues such as traffic congestion, pollution and energy conservation are also ongoing.
The country also needs to meet the increased demand for more power, especially electricity. The government’s 7th Power Development Plan for 2011 to 2030 emphasised the increased role of renewable energy. With Vietnam blessed with one of the highest number of sunshine hours in the world, an increase in solar will form an important part of the energy mix with wind, hydropower as well as bioenergy.
Looking at the local skills scene, clearly there is a huge demand for engineers from all disciplines. With so many national projects being undertaken, Huynh says there is a lack of manpower in the field as well as a shortage of highly qualified engineers and managers.
He adds that while Vietnam’s universities are turning out homegrown engineers, for the project leaders or senior management positions companies might hire from overseas or relocate people from within their organisation from other countries.
“Besides the technical skills, we also need to improve the soft skills such as communication, foreign languages and problem-solving skills,” he says.
These comments are underlined in the Vietnam Briefing by the investment consultancy Dezan Shira & Associates, which says that may local engineers are not up-to-date with latest information and technology and lack language skills. It also says management skills remain weak.
Like many countries, Vietnam has to plug a huge skills gap when it comes to digital skills in areas such as data and analytics and cyber security. It is predicted to face a shortage of more than 500,000 people in the IT sector by 2020. As a fast-growing country, big names such as Cisco are pledging to help address this with a range of programmes and such initiatives are much needed.
As a result of the labour and skills shortage in the country, many firms in Vietnam are forced to spend a considerable amount of money every year on employee training programs. According to the Vietnam Briefing, foreign companies in Vietnam have to retrain 40 to 50 per cent of their Vietnamese labour force. It says a key reason for Vietnam’s lack of high-skilled workers lies in the country’s education system, which traditionally focuses on “pure theory” rather than practical skills. It states: “Therefore, if Vietnam wants to attract more foreign investors, an education reform is definitely necessary.”
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