2018 International Residency in Vietnam, China Provides Invaluable Lessons on Future of Tech | Technological Leadership Institute
The following is a personal account of the international residency from M.S. in Management of Technology Class of 2018 student Ted Steinmann, an IT manager at the Food Protection and Defense Institute.
The International Management of Technology Project (IMTP) provided technology professionals enrolled in the M.S. in Management of Technology (MOT) program the opportunity to compare and contrast the emerging economy in Vietnam with the established economy in China. Over a period of two weeks, the 2018 cohort set out to obtain an international perspective on concepts studied in the program.
We visited research, development, manufacturing and logistics-related businesses across a variety of industries. We attended presentations and participated in discussions on intellectual property, government policy, education, global partnerships and entrepreneurship (see the extensive list below, which made for a busy schedule!). We also took time to engage in cultural activities and sightseeing.
Ho Chi Minh City, Vietnam: RMIT University, Consulate General of the U.S.-Vietnam, Datalogic, Esquel Garment Manufacturing, Intel, TMA Solutions
Shanghai, China: Medtronic Innovation Center, Huawei Technologies Shanghai Research Institute, Caterpillar Suzhou, MING Labs, Ford, SAIC-GM
Our cohort was split into groups to analyze and present on technology, policy, culture, human resources and international aspects of each country. We used the tools and skills learned in MOT to compare and contrast the global technology management environment.
The trip began with a subset of students arriving early to vacation, explore and for some to visit family in Vietnam. It proved invaluable to have a couple classmates with knowledge of and contacts in the region as we tried to finalize travel preparations and make plans back home. We would later learn that successfully orchestrating multinational business operations requires much of the same boots on the ground activity and correspondence.
For the majority of students, the travel itself began with numerous challenges. Dealing with the realities of flight delays and lost luggage, the group learned important lessons about logistics, coordination, cooperation and patience. A few subject-matter-experts, experienced travelers and social enablers emerged to help keep us together and take on opportunities to lead.
Upon arriving in Vietnam, we learned that the Vietnamese people are friendly, hardworking and have a great propensity to get things done. They have a rich culture and are very resilient. After a millennium of Chinese rule, French colonization, war and civil conflict, they retain a culture all their own. They are now entering a period where they’re in charge of their own destiny as an independent nation and it remains to be seen what they might accomplish.
They have a great strength in their workforce with 45 percent of their population between the ages of 24 and 54, according to the CIA World Factbook. Much of this workforce contributes to a large, low-cost labor pool which is ideal for manufacturing. We would later learn that China is losing its low-cost advantage and that many companies are now looking to Vietnam to be the China plus one. Esquel -- a progressive apparel manufacturer and one of the world’s leading producers of premium cotton shirts -- is a company utilizing Vietnam as it’s China plus one. Hong Kong-based Esquel has multiple facilities and a large labor-intensive presence in Vietnam. The location we visited provides jobs and a decent wage to approximately 1,000 people. Intel also has a large manufacturing presence in Vietnam and claims to be the largest U.S. investment in Vietnam. With more than 3,500 employees, Intel takes pride in bringing opportunity to Vietnam.
From a technology perspective, we learned that outside of foreign sources, Vietnam has grown primarily with only incremental innovation. The Vietnamese people are well educated in STEM and are very capable of producing high-quality products at a low cost. However, after visiting some of the businesses there, many of us felt that an obstacle for many organizations is project management and critical thinking, resulting in a lack of innovation. In addition, many of the educated people in Vietnam desire to leave their own country for more developed ones. That said, a few of the organizations we spoke to aim to change that.
The Vietnamese government has a very important role to play in the development of the manufacturing and technology ecosystem. Infrastructure is a problem. Transportation, Internet and electricity are unreliable in much of Vietnam. As one of our study groups stated in their conclusions, from a policy perspective: “Vietnam needs to capitalize on all the positive trends that already exist and, at the same time, invest in the infrastructure and economic growth drivers to ultimately unleash the human capital to ensure long-term sustainable growth.”
Stabilization of tax regulation, development of infrastructure and the strengthening of intellectual property protection is important. Their population provides a strong opportunity to produce goods and services, but local buying power is limited. Therefore, foreign investment and exports appear to be the most lucrative areas of focus.
We learned that the government is developing portions of Vietnam through projects like the Saigon High Tech Park (SHTP). SHTP aims to help Ho Chi Minh City become a trustworthy destination for high-tech investment and seeks to enhance the technological and intellectual base. However, we also learned that it was estimated that the airport in Ho Chi Minh City will be at capacity in 2018.
China, on the other hand, has a booming middle class, is massively expanding its infrastructure and is working to automate and outsource much of its manufacturing capability. Their tight control and nationalism, combined with the efficiency of a one-party state, allows them to make decisions fast and plan for horizons above and beyond the next term. Upon returning home to a government shutdown, the stark contrast further illustrated just how different the U.S. and China really are.
Along with increases in disposable income, more of the Chinese middle class is purchasing cars, which is good for one of our presentation hosts at SAIC-GM. It was stated that as other large markets stay flat or decline, new car sales volume for GM in China continues to grow and outpace all other locations. Furthermore, the state of the art automation employed by GM Shanghai is absolutely mind-blowing. To see a robot with infinite pivot and rotational capabilities pick up the shell of a hood, press it, seal it, glue it and pass it on was fascinating to watch.
Their policies have brought their society and people to the forefront of technology. We saw thriving accelerator and innovation hubs like Xnode and well-established high-tech firms like Huawei. XNode claimed that 12,000 startups are created every day in China. Huawei is the world's largest telecoms provider and the second or third largest mobile phone provider.
China is very focused on developing a knowledge economy. They have a very developed workforce of well-educated, industry-ready employees. Unlike Vietnam, where the brain drain seems to drive educated individuals to look elsewhere for employment, in China there seems to be a drive to be educated elsewhere and to return home.
From a policy perspective, the government pushes for innovation through incentives and nationalistic protectionism. Joint ventures are common, or in some industries required. Anti-corruption initiatives and protection of intellectual property are growing efforts.
China operates via communist politics, but they perform very well in capitalistic economies. Another study group posed the question, should we think of China as a country, or a company? They are planning for the long-term by seeking to improve consumer goods through higher quality (Made in China 2025) and investing in infrastructure to facilitate world trade.
While in Shanghai, we also visited a 400-year-old water village, the world's highest observation deck, and rode in the world's fastest train. And let’s not forget the food! Although much of our cohort was more partial to Vietnamese food, both countries offered a variety of unique foods and opportunity to try something new. Did I mention the trains are crazy fast? Just watch this clip.