Most Vietnamese IT firms have failed to make adequate investment in research and development due to limited financial capacity and a lack of skilled personnel, said HCM City Computer Association chairman Chu Tien Dung.
In the past 10 years, firms focused on creating IT products to meet short-term market demands rather than properly investing in research and development (R&D), Dung said.

In the past 10 years, firms focused on creating IT products to meet short-term market demands rather than properly investing in research and development (R&D), Dung said.

Domestic IT businesses that took on outsourcing work from foreign partners found it difficult to make sufficient investment in R&D because most of them were small and medium-sized, said Vietsoftware chairman of the board Tran Luong Son.

Some of the companies realised the importance of R&D but due to insufficient financial capacity, their R&D investment had yet to bring satisfactory results, he said.

While investing in R&D seems to be difficult for small IT firms, several larger enterprises have invested in R&D, resulting in new production technologies and unique products that have played a decisive factor in sharpening their competitiveness.

TMA Solutions, a large software outsourcing company, recently opened its first R&D centre in the Quang Trung Software Park in HCM City to expand its business in training, mobile service and business solutions.

Chairman of TMA Solutions Nguyen Huu Le said the company accepted outsourcing contracts from foreign companies over the past 12 years and also executed R&D projects under contracts with foreign partners.

"To date, TMA has accumulated good experience in innovation technologies from these projects and we can produce many items in Viet Nam," he said.

Mobile provider Viettel also established an R&D centre to develop new telecommunication equipment. The company has developed a USB with integrated 3G, the VT1000-3G, and plans to put it on the market by the end of the year.

CMC Group has also announced that it will set aside US$2 million to research or acquire new technology.

Establishing R&D centres in Viet Nam, however, still faced tax barriers and difficulties with equipment testing procedures, Le said, adding that it took his company three years to complete all relevant procedures.

Le suggested the Government should offer incentives for R&D projects.

Dung agreed. He said that Vietnamese ICT companies were seeing big opportunities in technology transfer from global IT companies as they move their R&D centres to Viet Nam to cut costs.

Several local outsourcing companies have seen a chance to receive R&D centres from foreign partners. The centres brought comprehensive technology and increased profits for local outsourcing companies, he noted.

To encourage more enterprises to shift to R&D, Dung suggested the Government rethink its tax policy for ICT companies that invested in R&D projects or R&D labs.