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MINISTRY OF EDUCATION AND TRAINING - MINISTRY OF INTERIOR

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

TO HONG NAM

STATE MANAGEMENT ON INFORMATION
TECHNOLOGY INDUSTRY IN VIETNAM
Major: Public management
Code: 9 34 04 03

SUMMARY OF THE DOCTORAL THESIS
IN PUBLIC MANAGEMENT

HA NOI -2019


The work is completed at:
NATIONAL ACADEMY OF PUBLIC ADMINISTRATION
Science instructor: 1. PhD. Chu Xuân Khánh
2. PhD. Lã Hoàng Trung

Reviewer 1: ……………………………………………………………
……………………………….……………………………
Reviewer 2: ……………………………………………………………
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Reviewer 3: ……………………………………………………………
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The dissertation will be defended before the Academy-level thesis review Council
Venue: Department for Doctoral thesis Presentation - Meeting room No.........

Building ……, National Academy of Public Administration. No: 77 - Nguyen Chi
Thanh street- Dong Da district - Ha Noi city.
Time: …………h……………

The thesis can be found at the National Library of Vietnam
or the Library of the National Academy of Public Administration.


PREAMBLE
1. Reason to choose the topic
Firstly, the IT industry (ITI) is a knowledge-based industry, mainly of
which is exploiting human intellect, less in exploiting natural resources, and
having high added value. This is an economic sector where Vietnam has a
comparative advantage with young human resources that diligent in
working, good mathematical thinking. However, in fact, the revenue of the
information technology industry in our country is not high, not yet able to
promote the available potential.
Secondly, the ITI has an important role and is concerned by the Party
and the State, but the actions of state management of ITI and information
technology has not kept pace with the development as well as the actual
requirements.
Thirdly, there have not been a specialist research project based on the
science of public management on state management for this high-tech
industry.
From the above analysis, the PhD student has chosen the topic "State
management on Information Technology Industry in Vietnam" as his/her
doctoral thesis in Public Management.
2. Research purposes and tasks
- Researching and supplementing scientific basis on state
management on ITI; from that basis, study the situation, propose solutions

to improve state management on ITI in the coming time.
- To achieve the above-mentioned purpose, the dissertation defines
research tasks as: General analysis of some typical research projects related
to domestic and foreign state management on ITI; studying, analyzing and
supplementing some theoretical and practical issues to improve the state
management science base on ITI; analyzing the status of state management
on ITI in Vietnam, comparing to the development status of the industry;
draw results, limitations and their causes of state management on ITI;
proposing general and specific trends and solutions to continue to improve
state management of information technology in Vietnam.
3. Subjects and scope of research
- Research object are the organization and state management
activities on ITI in Vietnam.

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- The scope limited in the contents of state management on ITI
systems (institutions, organizations, teams, finance, supervision), focusing
on policies, strategies, planning, plans and programs; legal documents;
inspection and examination to eliminate violations; organizing the state
management apparatus on ITI in the field of manufacturing computer
hardware and computer software. The scope of space is Vietnamese
territory, focusing on central state management. The period of the thesis
survey, assess the situations is from 2009 - 2017; proposing the trends and
solutions to the year 2020 and vision to 2025.
4. Methodology and research methods
4.1. Methodology
- The methodology used for studying the thesis is dialectical
materialism, historical materialism and systematic theory.

4.2. Research methods
- The thesis uses a combination of many different research methods
including: Methods of analysis, synthesis, practical summation, statistics,
comparisons, practical surveys in close combination with expert methods.
5. Scientific hypothesis and research questions
- The author set up some research questions to find the answer:
(1) What are the characteristics and contents of state management of ITI?
What are the factors affecting state management on ITI, the tendency
of state management on ITI ?
(2) How is the real situation of state management on ITI, results,
limitations and its causes? Why is the state management on ITI in our
country not yet catching up the development, not yet taking and
promoting the role and creating conditions for development?
(3) How to improve the content of state management on ITI in Vietnam in
the coming period?
- Scientific hypothesis: ITI plays an increasingly important role in
economic development, competitiveness and national defense. ITI of our
country has not yet taken advantage of opportunities and competitive
advantages, has not promoted the potentials. State management on ITI has
not kept pace with the development, therefore ITI of our country has not
developed well enough to meet its potential.
6. The scientific and practical significance of the thesis

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- The dissertation clarifies the theoretical issues of state management
of ITI in Vietnam, provides more scientific basis for the completion of state
management on ITI in the coming period.
- In practice, the dissertation analyzes and evaluates state

management activities on ITI over the past time; proposes solutions to
improve policies, strategies, planning, legal documents, inspection and
organization of state management apparatus on ITI in accordance with the
actual situation in the coming time; It is also a valuable practical reference
for agencies, units and individuals operating in the field of ITI.
- New contributions of the thesis:
 New approach of the thesis: Comparing to the previous works, the
thesis approached by the method of public management science to study the
scientific basis, assess the real situations of state management of ITI, based
on that proposes solutions for completion. Thesis in-depth research on state
management of ITI in a systematic way, combining theory with practice.
Those are new contributions of the thesis.
 The thesis proposes a system of solutions to improve state
management on ITI in Vietnam. Accordingly that, the thesis is proposing to
improve the system of guidelines and policies; perfecting strategies,
planning, programs and plans; completing the system of specific legal
documents for ITI; proposing the establishment of the Information
Technology Industry Department on the basis of upgrading the Information
Technology Board under the Ministry of Information and Communications,
and at the same time consolidating the organizational apparatus in localities.
Those are new contribution of the thesis.
7. Structure of the thesis
In addition to the introduction, conclusions and recommendations, the
list of references and appendices, the thesis has 4 chapters including:
- Chapter1.Overview of research situation related to state
management of Information Technology Industry.
- Chapter 2. Scientific basis for state management of Information
Technology Industry.
- Chapter 3. Actual situation of state management on information
technology industry in Vietnam.

- Chapter 4. Guideline and solutions to improve state management
on information technology industry.

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Chapter 1
OVERVIEW OF RESEARCH SITUATION
RELATED TO THE SUBJECT OF THE THESIS
1.1. Group of published studies related to the information
technology industry
Domestic research projects: There have been a number of scientific
topics (mainly of which are the Ministry of Information and
Communication projects) to study the contents of information technology
industry (including some of state management and production and business
activities) such as: Research, propose objectives, implementation contents
and solutions for development ITI in some localities; improve the efficiency
of investment in and development ITI in Vietnam in the period of 20112015. There are a number of research dissertations related to ICT from a
business perspective, often focusing on software products such as building
product strategy at the company CMCSOFT in the period 2013-2015. There
have been journal articles and seminars on research on ITI mentioning
about the different aspects of
ITI (much concentrated in ITCommunications magazine). However, because the concept of ITI has not
been really popular, the number of domestic research is still limited, the
research contents often focus on rather narrow topics of ITI.
Overseas research projects: Many relating research works, mainly
focusing on factors for promoting IT product production. There is a
research project on human resource development, a study of the model of
factors to promote software production for export, research on the
importance of R&D, and research on combining public and private

enterprises to develop ITI production ... Since the concept of ITI is defined
differently in each country, in each study, then the results of this study
should be stringed, valid for the study of state management contents.
1.2. Group of published studies related to state management of
information technology industry
Domestic research projects: There have been a number of doctoral
dissertations, scientific topics, articles researching solutions to develop the
manufacturing industry of hardware and software products in enterprises,
which mentioned a few contents related to activities of state management
on information technology industry. Most notably, in 2010, Tran Quy Nam

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implemented a ministerial-level scientific project in which proposed
solutions to promote Vietnam's ITI development in the period 2011-2015,
and some solutions to improve institutions and policies were proposed.
Overseas research projects: There have been a number of doctoral
dissertations, a master's dissertations, books and research articles related to
state management of ITI from different perspectives and conceptions of ITI,
including international research on ICT in Vietnam. Most of the studies
confirmed the role of state management in the development of ITI; a
research has focused on software outsourcing policy (Phalgunia Gupta);
There are studies focusing on the policy of developing the domestic
software market before exporting (Robert Schware); A research has focused
on policies to promote interaction with the Government, combining
research and production (Shiu Wan Hung); There are studies focusing on
foreign direct investment policies, promoting computer hardware
development (Felix B. Tan and Kallaya Leewongcharoen).
1.3. Comment, evaluation

There have been research projects related to state management of
information and communication technology, but not much, especially no
research work on basic, systematic under the view of science of public
management were found. The researches have analyzed and proposed
solutions for ITI development in general, including some contents related to
state management activities; The contents of the study on state management
on ITI scattered in different works, not yet be associated systematically and
scientifically.
Recognizing the aforementioned research gap, in their research, the
PhD student approached under the public management science perception
in a systematic way, linking theory to practice; assessing the actual situation
state management on ITI, thereby proposes some solutions to complete this
activity in Vietnam.
Chapter 2
SCIENCE BASIS ON STATE MANAGEMENT
FOR INFORMATION TECHNOLOGY INDUSTRY
2.1. Theoretical issues about ITI
2.1.1. Information technology industry concept

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There are many different definitions of IT, but most commonly, IT is
to use computers and computer software to convert, store, protect, process,
transmit and collect information. In the IT field, it can be divided into 5
main components: infrastructure, application, industry, human resources
and information security.
From an economic sector perspective, industry is a large-scale
economic activity whose product becomes a commodity that is strongly
supported by technological and scientific advances. It is understandable that

industry in the direction of large-scale production, modern in which only
one or several stages of the entire process of producing goods to create
added value.
There are many different definitions, in this thesis, ITI is understood as
the industry of manufacturing IT products, including computer hardware
and computer software. Computer software is a special, invisible product
that cannot be used without being installed on computer hardware and can
be easily transmitted on the network. Software with hardware creates a
"complete" IT product.
2.1.2. The role of the information technology industry
IT is affirmed as an effective tool to create new development methods,
contributing to promoting industrialization and modernization, ensuring fast
and sustainable development of the country. Application is the market of
industry, whereas industry promotes applications, creates synchronous
infrastructure to promote the development of other economic sectors and
creates a foundation for developing the knowledge economy. Industry is a
market that uses IT human resources and vice versa high quality human
resources will promote industrial development. IT itself also creates a new
industry named information technology industry, which brings higher and
higher revenue, contributing significantly to the GDP of each country.
Right since the 2000s, our Party has advocated "Developing the
information technology industry into an important economic sector,
especially the development of the software industry". Development of the
ICT industry helps each country to master information systems, mastering
technology to produce hardware and software products. Therefore, the
country is not dependent on foreign firms for IT technology and products,
ensuring network information security, protecting national sovereignty over
cyberspace.

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ICT contributes an increasing contribution to the country's GDP. This
is considered a young and potential economic day with high growth rate
that Vietnam has a competitive advantage in young manpower that diligent
in working and cheap compared to other countries in the region. In
particular, the industry of producing software products has high added
value, attracting, creating more and more jobs for employees. Those show
that ITI's increasingly important role is infrastructure to promote the
development of other economic and social sectors.
2.1.3. Characteristics of Vietnam's information technology industry
In this section, the dissertation presents four main characteristics of ITI
in Vietnam: (i) ITI is a high-tech product manufacturing industry, highknowledge products, high-automation hardware production while software
manufacture can be implemented separately through virtual offices, via the
network. In Vietnam, the hardware industry is mainly implements the
assembly stage while the software industry is mainly outsourcing for
exports and supplies for domestic demand; (ii) Market software products is
wide, direct competition in the international market. Hardware products
mainly participate in some stages of the global value chain; (iii) Large scale
investments, especially investments in hardware production assembly,
software brands and R&D. In Vietnam, most IT enterprises are SMEs, startup enterprises and R&D investments are very limited; (iv) IT human
resources are globally integrated, "moving" easily among countries in the
region and the world. In Vietnam, IT human resources lack in quantity and
weak in quality.
2.2. Contents of state management on information technology
industry and influencing factors
2.2.1. Contents of state management on ITI
The content of state management on ITI is divided into 5 main groups,
including: Institutional system including mechanisms, policies and legal
documents; Organizational system and operational mechanism of the

organization; The team and manpower carry out management activities
(staff, civil servants, employees, employees implementing management);
Expenses and funding for management activities (public finance); The
process of checking, evaluating and supervising management activities. The
details including (i) To develop and to organize the implementation of IT
policies, strategies, planning, program for development ITI. (ii) To develop,

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to promulgate, propaganda, dissemination and organizing the
implementation of legal documents on ITI; (iii) Inspecting, examining,
resolving complaints and denunciations and handling law violations in the
domain of ITI; (iv) International cooperation on ITI; (v) Organizing the
state management apparatus on ITI; (vi) In addition, state management on
ITI also includes the following contents: Developing and promulgating
regulations on standards and quality applied in the field of ITI; Managing
information safety and security in ITI operations; Granting, temporary
suspending, suspending, revoking types of certifications and certificates on
ITI; Managing investment in ITI operations according to the law;
management and development human resource for ITI; Organization of
management and use of natural resources and national database on ITI;
management and implement statistical reports on ITI according to the law;
Mobilizing information infrastructure and ITI equipments for national
defense, security and other emergency cases as prescribed by law. In the
scope of the research, the dissertation has studied and proposed solutions to
improve state management of ITI in 4 contents: construction,
implementation of guidelines - strategies - projects - plans - programs, legal
documents, inspection-check-handling violations and organizing apparatus.
2.2.2. The role of state management for ITI

State management plays an important role, deciding the development
of the information technology industry in our country, especially in the first
phase of the current development, including: (i) The role of creating a stable
environment and favorable conditions for production activities; (ii) The role
of promulgating the legal framework, implementing policies, encouraging
support, control and arbitration in order to achieve the objectives of
developing the ITI business; (iii) The role of preventing, overcoming,
limiting the negative aspects of the market mechanism for the production of
computer hardware and software products; (iv) Role of orientation for
activities of manufacturing ITI, direct investment in some areas to lead the
market; (v) The role of choosing to use highly effective management tools
creating a strong motivation to promote the development of ITI.
2.2.3. Characteristics of state management on ITI
In this section, the dissertation investigating the characteristics of state
management of ITI in our country today includes: (i) IT as well as IT
production activities are progressing very fast, many new technologies are

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constantly being created and therefore the state management has not held
pace with the rapid development of new technologies; (ii) ITI is a high-tech
manufacturing industry, the automation replaces people in almost every
stage of assembly therefore the state management will be different from the
one on previous traditional industries. This is a challenge for the
Vietnamese state management system, which originates from manual
agricultural production, influenced by prolonged war; (iii) The ITI
businesses has just been established in Vietnam for more than 10 years and
is in the early stages of development so that state management is still in the
process of foundation and gradually improving; (iv) Institutional system of

state management on ITI is still lacking, the quality is not high and slow to
be updated in accordance with the development of technology and the
actual situation; (v) Activities of inspection, examination, detection and
handling of violations in ITI face to many difficulties due to the lack of
legal regulations, the boundaries between traditional concepts are being
changed; (vi) Organizing the state management apparatus on ITI has been
implemented from the central to local levels but still thin, part-time and not
high quality, there is overlap of state management among agencies.
2.2.4. Factors affecting the state management of ITI
In this section, the dissertation analyzes subjective and objective
factors affecting the state management on ITI including: (i) Factors of
scientific and technological progress; (ii) Factors of Political environment;
(iii) Factors of Economic and social environment ; (iv) Elements of national
development history and national traditions and culture; (v) International
factors; (vi) In addition, other factors such as economic crisis in the country
and abroad; world political fluctuations; climate change and natural
disasters also have different impacts on state management on ITI.
2.3. Development trend of state management activities on
information technology industry
2.3.1. The trend of developing IT product manufacturing activities
In this section, the dissertation analyzes the development trends of IT
product manufacturing activities, including: (i) The number of people
working remotely will increase significantly; (ii) Cooperation becomes the
center of IT culture; (iii) The experience of users is increasingly important;
(iv) Tendency of fiber popularization; (v) Wireless and mobile trends; (vi)
Trend of using block chain technology; (vii) Trend of 3D printing to

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produce IT products; (viii) Network information security will be a major
concern; (ix) Trend of Automation with robot.
2.3.1. Trends of state management activities on ITI
In this section, the dissertation analyzes some trends of state
management on ITI including: (i) "More dynamic", closer collaboration
with IT enterprises and communities; "Smarter" to clearly define the limit,
predict the future; (ii) More transparent; (iii) Decentralize and assign more
responsibilities; (iv) Focus more on creating a legal corridor; (v) State
management shifted from administrative to service, with the participation of
the private sector; (vi) More support domestic IT enterprises.
2.4. International experience on state management on
information technology industry and lessons learned for Vietnam
2.4.1. The experience from Korea
Regarding the IT sector, Korea promulgated three laws namely EGovernment Law (March 2001), Law on Promoting ITI (2009) and Law to
promote the provision and use of public data (2013). The Law on promoting
ITI focuses on creating a legal corridor, paving the way for regulations to
promote the production of hardware, software and human resources. The
law also stipulates the following contents: Establishing a national agency
specialized in ITI and sanctioning regulations in the field of ITI. In
addition, to promote software industry, Korea also has a specialized law on
software industry. Vietnam needs to study, summarize more than 10 years
of issuing and implementing IT Law in 2006, refer to the above laws of
Korea to be able to amend and split into component laws to enhance the
role of state management on ITI.
2.4.2. The experience from China
China's success is due to the right development strategy such as
attracting foreign investment, close links with the selected research
institutions and importers. The lesson for Vietnam is to found a right
development strategy, focusing on developing concentrated IT zones to
attract foreign investment; promoting the important role of state

management in the development of manufacturing electronic hardware
products, which is the role of general orientation and regulation, facilitating
production development.
2.4.3. The experience from India
The success of India's state management policy for software industry
must include four main points: (i) The human resources is abundant,
proficient in English language; (ii) Attracting many multinational

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companies to invest; (iii) Attracting a lot of overseas Indians; (iv) The
Strategic focusing for outsourcing services. The lesson from India's
experience is to promote investment attraction through building and
recognizing a series of centralized IT zones, developing high-quality human
resources to serve the domestic market.
2.4.4. The experience from Ireland
Ireland has built its National Development Plans and the Strategy for
Science Technology and Innovation of 2006-2013, launching The New
Software Economy strategy for software industry that focused on
developing new models and products based on cloud computing, therefore,
the software industry is quite successful. The Government set a strategy to
expand software parks and invest heavily in R&D through the Science
Foundation Ireland and the Venture Capital Fund (jointly funded by the
Government and businesses). The lesson for Vietnam is to develop and
implement national plans and strategies, focusing on attracting foreign
investment into software parks, focusing on R&D investment.
Summary of chapter 2
Chapter 2 studies the concepts, defines the scope of research, identifies
the characteristics and increasingly important role of ITI in Vietnam. On

that basis, analiazing in detail the contents of state management, the special
important role of state management for ITI of Vietnam, analyzing
characteristics, influent factors and development trend of state management
on ITI as well as the experiences from Korean, China, India, Ireland.
Chapter 3
CURRENT SITUATION OF STATE MANAGEMENT ON THE
INFORMATION TECHNOLOGY INDUSTRY IN VIETNAM
3.1. Current situations of production activities of information
technology industry
3.1.1. The reality of the enterprises manufacturing information
technology products.
Electronic hardware enterprises: Most FDI enterprises are large exportoriented enterprises, modern and high-tech equipment and play an
important role in the structure of the industry as well as export. Most of
Vietnamese enterprises are SMEs, mainly business on making assembly
and trade service. State-owned enterprises (SOEs) mostly have good
infrastructure, average technological level and relatively efficient
production and business activities, but in recent years growth has slowed
down. Private enterprises are small businesses, with only a few medium-

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scale businesses, although the growth of private enterprises is high, but the
value-added is still very low due to limited financial and technological
potential.
Software enterprises: Most of Vietnamese software enterprises are still
small and medium-sized companies, with limited competitiveness,
production and quality management processes are low quality, higher levels
expert teams are few, lacking marketing experiences. Even so, Vietnam
has a number of businesses that have attained certification of CMMI level

3, 4, 5 of international software production quality management process and
other prestigious international certificates in the field of manufacturing
software, ensuring information security such like ISO 27001.
3.1.2. Situation of producing information technology products
Hardware - electronic products: The structure of hardware - electronic
products is seriously imbalanced, investment in specialized informatic
products only accounts for about 11.5%. The computer market including
desktop computers, laptops, tablets and smartphones with an average annual
growth of about 15-20%. About 80% of the desktop computer market is in
the hands of Vietnamese enterprises. However, production is getting
narrower because Vietnamese computer companies have not yet surpassed
the limits of assembling synchronized desktop models equipped for offices
and schools. Laptops, tablets, smartphones dominate the market but in fact
Vietnamese companies are almost leaving this market segment open.
About the software products, in recent years, Vietnamese units
producing software have provided many valuable products to the market,
notably the types of management software such as accounting software and
HR software, investment management software...Especially, many
specialized software for telecommunications and software serving eGovernment have been promoted by VNPT and Viettel groups. Other
Vietnamese software enterprises such as FSoft, CSC, TMA, Global
Cybersoft... have developed many software products and services based on
cloud computing, boosting outsourcing for Japanese , North American and
European market. Concomitantly, many open source software products
have been invested, developed and localized.
3.1.3. Situation of market of information technology products
Market of hardware-electronic products: Bringing the clear
characteristics of a production based on technology transfer platform. Due

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to not being proactive in technology and raw materials, domestic enterprises
played a faint role, unable to regulate the market. The market share of
computers having an international brand is estimated at 15-30%, the share
of non-branded assembly computers is about 65-70% due to reasonable and
flexible prices, while the domestic brand computers account for about 1530%. Particularly, more than 90% of the laptop market share in Vietnam
are belonging to foreign brands. The market share of Vietnamese brand
laptops is only modest at around 10% but the quality is not too inferior to
foreign computers. The domestic market in the coming time tends to
research product design, selecting components and attaching product labels,
focusing on developing products of smart phones and cheap tablets with
Vietnamese brand. The export market mainly concentrates from the joint
venture area through outsourcing and assembly activities.
Market of software products: The domestic market mainly depends on
the purchasing power of state-owned agencies and enterprises invested by
the state budget because of determination to boost the application of IT in
the agencies of the State and the Party. Another reason is the pressure of the
integration process which requires improving operational efficiency,
automating production processes, improving competitiveness in the key
industries. Up to 70% of software enterprises are mainly orienting domestic
markets that are the environment for enterprises to train and improve their
capacity. For overseas markets, Vietnamese software enterprises mainly
provide software outsourcing services. AT Kearney organization has rated
Vietnam as the 10th most attractive country in software outsourcing. The
foreign market mainly focuses on North America, South Korea and Japan.
3.1.4. Current situation of human resources for information
technology
The number of long-term formal IT training institutions is relatively
abundant, accounting for about two-thirds of all university training
institutions. The targets of admissions of university and colleges in IT

industry also increases year by year. However, after graduating, IT students
cannot immediately enter the labor market in an industrial environment due
to their lack of foreign languages and soft skills, so there is a shortage in
both quantity and quality. Short-term training on IT is diversified, providing
effective support for long-term training but not well controlled, especially
in quality.

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3.2. Current situation of state management on ITI
3.2.1. Actual situation of guidelines, policies, strategies, projects,
plans and programs for development of information technology industry
- Guidelines and policies issued by the Government at resolutions have
shown relatively sufficient contents, affirming the important role of the
information technology industry and facilitating the development of the ITI.
However, guidelines and policies in general reflect political determination,
need to be institutionalized into legal documents, investment in resources to
become realization; some of guidelines are still slow to be textualized to
implement in practice. Some guidelines and policies are still general and
not specific and qualitative, such as strengthening, encouraging and
prioritizing, making it difficult to implement. The basic reason is that the
progress of science and technology in the IT field has changed rapidly,
substantially changing the mode of production, state management has not
kept up with the development of technology. The IT industry has many
different characteristics from traditional industries, hardware products
participating in the global value chain, software products can be easily
circulated in the network environment.
- Since 2005, there has been a "ITI development strategy" issued that
identifies long-term goals, indicating key solutions. However, this

"strategy" was integrated with the ICT development strategy in general.
Some contents have been implemented, the target of software and hardware
revenue exceeded the set target. Besides it, many contents have not been
implemented and no longer suitable after more than 10 years of
implementation, so it is necessary to develop and issue a new strategy
specifically for ITI.
- Since 2007, there has been "ITI development planning" issued,
integrated with ICT development planning of the 3 key economic regions.
Deploying those plans, up to now, a series of concentrated IT areas have
been formed that have attracted many strong domestic and foreign IT
enterprises to invest in production. In the whole country, there are 41/63
provinces and cities generating revenue related to the production of IT
products and up to 19/63 localities getting revenue from exporting IT
product. However, many of the goals set out in the plans have not been
implemented. The main reason is that the localities have not arranged and
attracted resources, the resources, if any, are often not focused, fragmented,

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leading to asynchronous and uneven investment among localities. After
more than 10 years of implementation, many contents are no longer suitable
for practical and technological conditions, it is necessary to develop and
issue a new and plan specialized for ITI.
- Software industry development program was issued 10 years ago.
Many contents of the program have been drastically implemented,
achieving important results, contributing positively to the growth of ITI in
this period. However, there are still many contents that have not been
implemented synchronously and have not got the desired results. The main
cause are the domestic economic downturn, tightening public spending;

some ministries, branches, localities and IT enterprises have not really
participated in the Program; There is still a lack of guiding documents on
norms, financial mechanisms and technical norms..
- The project to make Vietnam soon become a strong ICT country by
2020 (including ITI) has been approved by the Prime Minister since 2010.
The overall framework scheme, mainly demonstrating political
determination and tasks and solutions of the basic scheme already in
previous strategies, planning and programs. Therefore, the results of
implementing the Scheme is to synthesize the results of implementing these
strategies and plans. The major limitation is in the stage of organizing the
implementation that no action plan has been issued, so the ministries,
branches and localities have not really entered and spent a worthy
investment to implement the Scheme.
- The Target Program for the development of the ITI to 2020, with a
vision to 2025, was approved in 2015, continuing to inherit the successful
implementation of the programs for the 2007-2014 period, concomitantly,
updating and supplementing new content in accordance with the latest
regulations issued; integrating and using the resources of other ongoing
programs for ITI development. Although it was promulgated since 2015,
this Program has not been implemented yet, funding has not been allocated.
The main reason lies in the responsibility of the chairing agencies and
branches and the difficulties of the economy in the over time.
- The overall plan for the development of Vietnam's electronics
industry (including computer hardware production) by 2010 and the vision
to 2020 has been approved by the Prime Minister. So far this is the only
plan for the development of electronic industry (including computer

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hardware production) issued. Some contents of the plan have been
implemented but there are still many contents that have not been
implemented in practice. The main reason is that the contents of the plan
are still general, difficult to implement and the chairing units have not paid
enough attention, and have not arranged the resources for deployment.
- The master plan for IT human resource development to 2015 and the
orientation to 2020 has been approved by the Prime Minister since 2009.
The solutions focus on increasing investment, expanding the scale and form
of training, innovating programs, content, methods and processes of
training. However, the actual implementation of the Plan is very limited,
much of the contents have not been implemented, objectives and solutions
are qualitative and difficult to assess. The main reason is that the lead
agencies have not really directed strictly, the financial mechanism has many
obstacles..
- Thus, until now, the strategy, projects, programs and plans for ITI
development to 2020 have been basically formed and issued; Implementing
a number of programs has achieved remarkable results, such as the program
of software industry development. However, there are some shortcomings
such as: (i) There are no strategies, plannings, programs and plans
specialized for the development of the information technology industry that
are issued, in fact, ITI is now integrated with ICT. Much of the content on
ITI is missing or unclear; no strategy, planning, program, long-term plan for
the period after 2020 were issued; (ii) Strategies, plannings, programs and
plans issued over 10 years are no longer appropriate, especially in the
context of rapid progress of IT over the past time as well as the adjustment
of guidelines, policies and organization apparatus and economic context at
home and abroad; (iii) Strategy, planning is not really, is still formal, not
feasible; especially the conditions of resources to ensure the implementation
of the strategy and planning are not responded; (iv) Many programs and
plans have been issued but have not been implemented or just stopped at the

start-up phase.
.
The main reason is due to: (i) The quality of strategies, planning,
programs and plans is not close to reality, lacking of feasibility, nonnormative and lacking of sanctions, so the implementation is still limited;
(ii) The resources to ensure implementation of strategies, planning,

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programs, plans, especially financial resources have not been met; (iii) The
domestic and international context changes, especially the rapid progress of
technology, the fierce competition of countries in the region..
3.2.2. Status of legal documents related to information technology
industry
- The National Assembly promulgated the Law on Information
Technology 2006 (IT Law), including the field of manufacturing computer
hardware and software products. The law stipulates the development policy
of ITI (Article 48) and stipulates that the competent state authorities issue
regulations and organize the implementation of activities to develop ITI
market (Article 49). By implementing IT Law, ITI has gradually become an
important economic sector. However, in fact, over 10 years of
implementation, some contents of IT Law are still unclear (Article 39,
Article 45); some contents had been handed over to the Government,
ministries and branches have not been normative (Article 49, Article 50);
there is also inconsistency between IT Law and some other Laws; the
regulations on ITI are inadequate and no longer suitable with the trend of
technology development. Regarding enforcement, there is overlap in the
implementation of state management on hardware industry; on software
copyright and intellectual property rights; lack of funds for implementing
approved programs and plans; small scale and potential of IT enterprises

hinder the development of the information technology industry. In addition
to the IT Law, the National Assembly has adopted a number of specialized
Laws that incorporate the adjustment of activities of producing IT products
such as Investment Law and Import and Export Tax Law.
- The Government has issued a specific guidance on some articles of
the IT Law on ITI, which is the highest document so far with specific
regulations on ITI. The decree regulates ITI types, development of the key
IT product, centralized IT zones and the measures to ensure developing ITI.
Over 10 years of implementing the Decree, a number of important results
have been achieved (mainly as a basis for issuing guiding documents).
However, many contents of IT Law have not been instructed in the Decree,
some contents are slow to implement, many contents have not been
implemented and some contents need to be adjusted to suit the reality. In
addition, until now, the Government has not yet had other documents
regulating the contents specialized for ITI, which are often integrated in

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some common documents. The Prime Minister, in addition to issuing
programs and plans for the development of ITI mentioned above, has also
issued direct and indirect legal documents on ITI.
- At the ministerial, sectoral level, there are some notable documents
related to ITI development such as guiding the management and use of
funds for development of IT industry; List of products of software and
hardware, electronics; prescribing the determination of software product
production activities; the priority of investment and procurement of
domestic IT products and services using the state budget.
3.2.3. Actual situation of inspection, checking and handling of
violations of information technology industry

The Inspectorate of The Information and Communication Industry
presides over the inspection, examination and handling of violations of ITI.
In general, the work of inspecting, examining and handling violations of ITI
has been implemented in recent years but still very limited in both terms of
quantity and level. Some reasons of limitation are such as the inspection
teams ara lack in quantity, not regularly updated to improve the
qualifications and support facilities are lacking and outdated; there is also
the overlap of functions and tasks of specialized inspectors relating to ITI;
The propaganda, dissemination and guidance of laws have not been
effective; regulations on violations have not been updated, sanctions are not
enough to deter.
3.2.4. Current status of international cooperation in state
management of information technology industry.
In the over time, cooperative relationships have been expanded, calling
for funding for the development programs of ITI, creating investment
opportunities, promoting trade for businesses, developing human resources
for ITI; participating in many trade agreements such as ITA, WTO and FTA
free trade agreements as well as signed cooperation agreements. However,
there are still many shortcomings such as the lack of international
experience in state management on ITI; has not created an open policy
environment in which administrative procedures reduced, preferentially
attracted foreign investment and technology transfer; slow in trade
promotion and human resource attraction. In the coming time, state
management of information and communication technology focuses on
addressing the above limitations, concluding negotiations on trade

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commitments, sending experts to deeply participate in international

organizations, attracting international resources to develop ITI and
supporting Vietnamese IT products to international market.
3.2.5. Current status of state management apparatus on information
technology industry
The apparatus of state management on ITI has decentralized clearly the
functions and tasks at the central level (Ministry of Information and
Communications), local level (Department of Information and
Communications) and related agencies, units and associations. However,
the current state management apparatus on ITI have revealed some
limitations such as: There is no unit specialized in state management on ITI;
The contingent of cadres and specialists specialized in state management on
ITI is thin and lacking practice experience; At the central level, the unit
advising on state management on ITI organized under the model of
Department that restricted proactive; The relationship and interaction
between state management agencies on ITI and the relevant agencies at the
same level, especially with associations and enterprises, is lacking in strong
attachment, has not yet created consensus and synergy.
3.2.6. General results achieved
- The guidelines and policies for development of ITI have been paid
attention and directed by the Party, the National Assembly and the
Government, and issued many resolutions affirming the important role of
ITI, setting targets and solutions to facilitate ITI development in the coming
time. In particular, policies on encouraging investment, incentives and
exemption of corporate income tax. According to that, the software industry
is specially invested with preferential treatment, enjoying the highest tax
incentives, Vietnamese enterprises involved in manufacturing and
providing software services are supported investment from the development
support fund of the government. The policies encouraging the use of
domestic IT products and services have attained some certain results.
- Strategies, planning, programs and plans for IT development have

been developed and issued, implemented and attained some important
results. Many localities have developed their programs and plans for ICT
application and development on the basis of national schemes and programs
suitable to their localities, in which capital sources are used local budget in
combination with supporting from the central budget.

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- The system of legal documents has been gradually improved,
creating a synchronous and favorable legal framework for developing ITI. It
can be said that the full basic legal environment is gradually being
improved and updated to create a more favorable corridor for developing
ITI. The state management apparatus on ITI has been deployed from the
central to local levels with clear and transparent decentralization of
functions and tasks.
3.2.7. Limitation, inadequate and basic causes
- The guidelines and Policies of the Party and the Government are
still slow to be legalized, some guidelines are generally qualitative and
difficult to implement.
- Strategies, plannings specialized for ITI have not been issued,
currently being integrated with ICTs, many qualitative contents are difficult
to enforce, the promulgation of strategies and planning are still formalism.
Moreover, these strategies and plannings issued over 10 years are no longer
relevant now. The programs and plans of ITI development have been
issued, updated and implemented with initial results, in the period from
2015 is hardly implemented.
- The system of legal documents on ITI is lacking, or slow to issue,
not keeping up with the actual situation (especially the documents
specialized for ITI development). The system of legal documents on ITI

needs to be finalized, with the regulations on current procurement
investment, IT projects are often inclined to purchase hardware products
because of easy in disbursement and norms are quite clear. IT projects often
have little investment in software products due to the lack of norms and
regulations on procurement investment. In addition, the lack of regulations
governing the import and export of software or the policy of VAT
exemption for current software products has limited the development of
Vietnam's software industry.
The quality of documents is sometimes unrealistic and difficult to
implement; The content of documents is difficult to understand and unclear,
which makes it difficult to enforce; The documents were not timely causing
difficulties for production activities, losing opportunities to dominate the
market; many documents were overlapping and contradictory; The
collection of opinions in the construction of documents are sometimes not
realistic and formalism; The dissemination, storage and search of legal

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documents is not convenient, especially the dissemination of laws to the
foreign investors.
- The state management apparatus does not yet have a specialized ITI
unit, the ITI sector has not been given adequate attention, often
concurrently and integrated with other areas.
- The main reason is: (i) Rapid progress of science and technology
(such as cloud computing technology, big data, artificial intelligence)
leading to changes in thinking and management methods; (ii) The lack of
investment resources or investment is quite limited, resulting and efficiency
are low, not really taking advantage of young and dynamic human
resources of Vietnam; (iii) The quality of constructing policy, strategy,

planning, legal documents are not high; (iv) The apparatus of state
management is thin and the quality of human resources is limited and
lacking in the connection between state management with enterprises and
associations.
Summary of chapter 3
Chapter 3 summarizes and assesses the situations of ITI production
activities from 4 key aspects including enterprises, products, markets and
human resources, showing an overall picture of the information technology
industry in our country. The impact on ITI production activities includes
many different factors, Chapter 3 has deeply integrated, analyzed the actual
situation of state management on ITI from 4 aspects of state management
including guidelines - policies, strategies - planning - schemes - programs plans, legal documents and organizing state management apparatus.
Concomitantly, Chapter 3 has deeply analyzed the results, limitations and
the basic causes that state management activities have achieved, have been
encountered in recent years. The results of research in Chapter 3 combined
with the results of research on trends and experiences in Chapter 2 will be
the basis for proposing solutions to improve the state management on ITI in
Chapter 4.

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Chapter 4
ORIENTATIONS AND SOLUTIONS TO CONTINUE
COMPLETING THE STATE MANAGEMENT ON THE
INFORMATION TECHNOLOGY INDUSTRY
4.1. Viewpoints and orientations to complete the state
management on the information technology industry
The point of view: (1) Based on the Party and State guidelines; (2)
promoting to develop ITI into an economic and technical sector with rapid

and sustainable growth; (3) improve the effectiveness and efficiency of
state administrative management; (4) consult and apply domestic and
international experiences; (5) consistent with the general development trend
of the world, taking advantage of Vietnam's potential and strengths..
In terms of directions: (1) Focusing on management decisions such as
what to help, for whom and how much, especially developing key products,
centralized IT zones, transferring to private sector the provision of
infrastructure services; (2) Assigning more powers and responsibilities to
local governments, allocating centralized IT areas to localities to manage,
assigning enterprises to developing key IT product, applying the form of
hiring executive directors (CEOs) ) such as of the private sector,
transforming non-business units into joint-stock companies; (3) Enhancing
the relations with the public, businesses, associations and consumers of IT
products; (4) Applying business management by efficiency, according to
the output instead of input, should not allocate funds to agencies and units
based on the number of employees and payrolls without caring about
efficiency of management and use in practice; (5) Promoting the application
of the mechanism for ordering public non-business services using the state
budget; (6) Research and apply the form of using employees to work under
contracts instead of the recruiting regime to work for a lifetime to maintain
the strive for continuous learning, creating flexibility in personnel; (7)
Developing a model in which the state management agencies are provided
with public services related to the law on ITI, perform consultancy
contracts like as private enterprises; (8) Allowing private enterprises to be
provided with some public services in the field of ITI such as legal
consultancy, investment consultancy, guiding the procedures for licensing
for production and IT services.

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4.2. Some solutions for continuing to improve the state
management on information technology industry
4.2.1. General solutions
Completing the ITI development policy in the direction of
continuously updating and supplementing in accordance with the actual
situation; more specific, more feasible to be able to institutionalize legal
documents as a basis for practical implementation, including: the policy of
developing IT enterprise; IT product development policy; the policy of
attract investment in manufacturing IT products; the policy of developing
IT product market; the policy for developing IT human resources.
4.2.2. Some of specific solutions for continuing to improve the state
management on information technology industry in Vietnam
4.2.2.1. The solutions to improve policies, strategies, planning, plans
and programs for development of information technology industry
Developing strategies, planning, plans for ITI development separately,
overall and synchronously, avoiding integrating with ICT development
contents as before; Reviewing, adjusting and updating in accordance with
current practical conditions of ICT development strategies; Improving the
quality of strategies, planning, programs and plans for ITI development;
Reviewing, modifying and supplementing to ensure ITI is an important
content that must be included in strategies, plannings, plans and program
for socio-economic development; Developing detailed planning of
concentrated IT zones; Focusing on drastically implementing the target
program for the development of the ITI industry until 2020 which has been
approved.
4.2.2.2. Completing the system of legal documents related to the
information technology industry
Completing the system of legal documents towards urgently
supplementing the missing documents, legalizing the guidelines and

resolutions adopted by the Party and the Government; revise documents
that are no longer appropriate to reality, ensuring clear responsibilities,
clear sanctions, clear resources and feasibility in the implementation.
4.2.2.3. Improving inspection, inspection and handling of violations
Completing the legal regulation system, focusing on updating
violations and adjusting appropriate remedies; promoting the propaganda
and guidance on the law, especially using online; strengthening inspection

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