Economy

Vietnam has a population of nearly 96 million people, which makes it the 14th largest country in the world in terms of population. One third of the population lives in the big cities (Ho Chi Minh, Hanoi and Danang). Almost 60% of the population is 35 years or younger and are highly skilled, friendly, brand aware, and punctual.

The country remains one of the fastest-growing economies in the world with a GDP growth of 6.21% in 2016 and an expected growth between 6.5% and 7% in the upcoming years. These numbers are way higher than the Asian (4.1%) and global (2.4%) average. According to the Boston Consulting Group, the medium and wealthy class will double in size between 2014 and 2020 from 12 to 33 million people. In addition, by 2020, the average income per capita will rise from US $1,400 to US $3,400 per year.

Besides the impressive growth rates, the rising demand for consumer goods and the need for foreign goods and services makes it an attractive country as well. The country knows and open economy with a trade flow of US $340 billion. This is 1.6 times the size of the national GDP and has attracted a total of US $300 billion of registered foreign investments in 2016. These investments have provided millions of jobs and have contributed to innovation and modernization, which has led to a strong economic growth.

Investments in technological development is seen as the largest opportunity for boosting GDP growth. Vietnam has a good reputation in science and technology, such as mathematics, IT and specializations in agricultural research and biology. It has invested heavily in infrastructure and successful economic policies that encourage both domestic and international entrepreneurs to start doing business.

The growth in industrial production has led to major environmental problems, such as air and water pollution, deforestation and loss of ecosystem. The focus on short-term results reinforces these problems. Corporate Social Responsibility (CSR) is still not very common in Vietnam. In particular, multinationals put CSR on the map by setting conditions for trade and production and by carrying out CSR-related activities. One of the drivers behind CSR is to position the company positively against the Vietnamese government. CSR is an important business case for these companies to maintain or expand market share in the Vietnamese market.