– Real estate: In 2023, total FDI from Japan into Vietnam’s real estate sector reached nearly USD 6.57 billion, accounting for about 10% of Japan’s total FDI in this country.⁷

Skilled Human Resources’ demand

Japanese enterprises have a substantial and growing presence in Vietnam, with 3250 firms in 2023⁸ across various sectors including manufacturing, construction, and finance. This significant investment has created a critical need for high-quality human resources. While Vietnam boasts an abundant labor force, there’s a recognized gap in the technical skills required by Japanese companies, particularly for high-value production and advanced technology sectors. As a result, Japanese firms in Vietnam face ongoing labor shortages, while Vietnamese workers struggle with intense job market competition. Japanese companies frequently seek skilled workers for managerial and technical roles, such as production, quality control, and machinery design. This demand for proficient labor is expected to increase further due to global value chain shifts and trade tensions.

Skills gap hinders Japanese companies in Vietnam from hiring quality workers

Source: skhcn.bacgiang.gov.vn

Skilled Human Resources supply

The rate of trained labor in Vietnam has shown a slight upward trend in recent years; however, the figure remains modest. According to preliminary data from the General Statistics Office (GSO), the rate of trained workers in 2023 reached 28.5%, an increase of 0.9% compared to 2022⁹. Meanwhile, the underutilized labor rate in Vietnam in Q4 of 2024 stood at 3.8%, equivalent to about 2.0 million people¹⁰. This highlights the need for more effective training policies and programs to improve workforce quality and meet labor market demands amid economic integration and development.

The rate of trained workers in Vietnam

Unit: %

Source: GSO

Opportunities for Japanese Educational Technology Transfer

Japan possesses advanced educational technology and strong expertise in human resource development, which can be highly beneficial for Vietnam. Key aspects of Japanese educational technology and approaches that are being, or can be, transferred include:

– Vocational Training and Technical Skills: Japanese cooperation, particularly through organizations like JICA, has focused on strengthening vocational training institutes in Vietnam. This includes curriculum development, training of trainers, and providing equipment to meet Japanese standards. The “Kosen Model,” a poly-technique system emphasizing ability, mindset, and creativity, is also being introduced.¹¹

– “Soft Skills” and Management Practices: Japanese business administration principles such as 5S (Sort, Set in order, Shine, Standardize, Sustain) and Kaizen (continuous improvement) are being transferred through business courses and hands-on training. These focus on enhancing not only technical expertise but also work ethics and organizational efficiency¹²

– Advanced Technology Education: Collaboration extends to cutting-edge fields like Artificial Intelligence (AI) and Information and Communication Technology (ICT). Vietnam-Japan University, for instance, has partnered with Japan’s National Institute of Information and Communications Technology (NICT) for research and technology exchange, aiming to train high-quality human resources in these areas.¹³

MOU Signing Ceremony between Vietnam Japan University and Japan’s National Institute of Information and Communications Technology (NICT)

Source: vju.ac.vn

– Project-Based Learning: Initiatives like “Project Design” education, as pioneered by Kanazawa Institute of Technology (KIT), are being implemented to cultivate innovation and problem-solving abilities through team-based approaches to real-world challenges¹⁴

Successful Collaborations Between Japanese and Vietnamese Educational Institutions

In the context of a shortage of high-quality human resources, the educational partnership between Japan and Vietnam plays a pivotal role in developing a skilled workforce that meets Japanese business standards. Some notable collaborations include:

VJEP 2024 Opening ceremony

Source: ueh.edu.vn

These collaborations not only enhance the quality of education in Vietnam but also ensure that the workforce is well-equipped to meet the standards of Japanese enterprises operating in the country

Challenges and Opportunities

There exist some challenges for Japanese investors in this sector:

– Infrastructure and Funding: While Vietnam is keen on EdTech growth, there’s a geographic disparity in access to digital education, with major cities being better served. Public schools often lack the necessary infrastructure, outdated hardware, and adequate tech facilities.²⁰

– Policy Implementation: Although the Vietnamese government policies support EdTech and foreign investment, the lack of specific actions, consistent funding, and streamlined implementation measures can slow progress, especially in underserved regions.²¹

– Teacher Training: Ensuring that Vietnamese educators are equipped to deliver Japanese-standard curricula and utilize advanced educational technologies is crucial.²²

However, overall, there are some opportunities for Japanese investors to develop in this field. Including:

– Government Support: The Vietnamese government is actively promoting foreign investment and collaboration in education, science, and technology. It is reflected in “Strategy to 2030 and vision to 2045²³” and “Decree 124/2024/ND-CP²⁴” on encouraging international universities to establish campuses, facilitate joint programs, and prioritize frontier technologies.

– High Demand for EdTech: Vietnam’s EdTech market is booming. The EdTech market in Vietnam is forecast to grow at a CAGR of 13.5% from 2024 to 2032, thanks to the increase in the young population, high internet and smartphone penetration, as well as the willingness of families to invest in education. This is fertile ground for Japanese EdTech solutions.²⁵

– Bilateral Relations: Vietnam and Japan’s strong ties, elevated to a “Comprehensive Strategic Partnership” in November 2023, expanding cooperation in areas such as science, technology, innovation, and development of high-quality human resources²⁶. Additionally, Japan is a leading investor and ODA donor, demonstrating a commitment to Vietnam’s human resource development.²⁷

The Governments of Vietnam and Japan held talks on upgrading relations to the level of “Comprehensive Strategic Partnership”

Source: baochinhphu.vn

Conclusion

The transfer of Japanese educational technology to Vietnam holds immense potential for training human resources to meet the specific needs of Japanese enterprises in the country. By leveraging Japan’s expertise in technical and vocational training, soft skills development, and advanced technology education, and with the strong support of the Vietnamese government, Vietnam can significantly upgrade its workforce capabilities. Addressing challenges related to infrastructure, policy implementation, and teacher training will be crucial for maximizing the effectiveness and reach of these educational technology transfers, ultimately fostering stronger economic ties and mutual development between the two nations.

¹ https://tapchitaichinh.vn/doanh-nghiep-nhat-ban-danh-gia-cao-tiem-nang-dau-tu-tai-viet-nam.html

^{2 +3} https://www.jetro.go.jp/

⁴ Includes “Downsizing” and Withdrawal/Relocation to 3^rd countries”. However, we do not show them in the chart due to the very small proportions

⁵ https://thesaigontimes.vn/dong-dau-tu-tu-xu-hoa-anh-dao-khoe-sac-tro-lai/

⁶⁺⁷ We have mentioned this issue in some previous articles of B&Company. Please refer here for more information

⁸ According to B&Company’s Database

⁹ https://www.nso.gov.vn/

¹⁰ https://www.gso.gov.vn/

¹¹ https://www.jica.go.jp/Resource/vietnam/english/activities/activity04.html

¹²https://www.jica.go.jp/

¹³ https://vju.ac.vn/truong-dai-hoc-viet-nhat-ky-ket-hop-tac-nghien-cuu-va-trao-doi-cong-nghe-voi-vien-cong-nghe-thong-tin-va-truyen-thong-quoc-gia-nhat-ban/

¹⁴ https://www.hutech.edu.vn/english/training-news/14618817-vietnam-japan-institute-of-technology-discussed-joint-educational-programs-with-kanazawa-university

¹⁵ https://vju.ac.vn/en/collaboration/partner-university/

¹⁶ https://vju.ac.vn/en/study-at-vju/undergraduate-programs-2/

¹⁷ https://vjiet.duytan.edu.vn/du-hoc-nhat-ban/dh-duy-tan-dh-okayama-shoka-va-quy-ho-tro-du–qddqt

¹⁸ https://ueh.edu.vn/cuoc-song-ueh/tin-tuc/trao-doi-sinh-vien-giua-asia-association-of-education-and-exchange-aaee-va-dai-hoc-kinh-te-thanh-pho-ho-chi-minh-ueh-vietnam-japan-exchange-program-2024-72473

¹⁹ https://www.vietnam.vn/en/cap-hoc-bong-ban-dan-cho-sinh-vien-viet-nam-tai-nhat-ban-va-my

²⁰ We have mentioned this issue in some previous articles of B&Company. Please refer here for more information

²¹ https://vm.ee/

²² https://vje.vn/index.php/journal/article/view/365/159

²³ https://baochinhphu.vn/chien-luoc-phat-trien-giao-duc-den-nam-2030-tam-nhin-den-nam-2045-102250102165657226.htm

²⁴ https://thuvienphapluat.vn/van-ban/Dau-tu/Nghi-dinh-124-2024-ND-CP-sua-doi-Nghi-dinh-86-2018-ND-CP-dau-tu-cua-nuoc-ngoai-linh-vuc-giao-duc-628112.aspx

²⁵ https://asiafundmanagers.com/identifying-growth-opportunities-of-edtech-in-vietnam/

²⁶ https://baochinhphu.vn/nang-cap-quan-he-viet-nam-nhat-ban-len-doi-tac-chien-luoc-toan-dien-vi-hoa-binh-va-thinh-vuong-tai-chau-a-va-tren-the-gioi-102231127202442552.htm

²⁷ https://vir.com.vn/japanese-oda-is-massive-contribution-for-vietnam-116840.html

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