Piracy, regulation hit Vietnam software industry

Heavy regulation and untrammelled piracy are threatening Vietnam's fledgling software industry, according to local developers who attended last week's Vietnam Computerworld Expo.

At the exhibition, local software houses clubbed together to set up a Vietnamese software pavilion. But they admitted there were few new products being demonstrated. Software companies currently pay 4 per cent tax on sales and 45 per cent on profits, which acts as a strong deterrent to developers, according to one exhibitor.

"How can we develop new products when we are only barely surviving this tax burden?" said a senior executive of the local Lac Viet software house, who asked not to be named. "And yet the government says it regards software as a key economic sector."

In a government report issued last month, software development was picked as a focus for Vietnam's IT industry. Many of the products will be used to boost industry as a whole, according to Nguyen Trong, director of Ho Chi Minh City's Centre of Scientific and Technical Information (CESTI).

Another major deterrent to the development of Vietnam's local software industry is software piracy, which affects local companies as much as, if not more than, resource-rich multinationals. The Business Software Alliance (BSA) last year estimated 99 per cent of software in use in Vietnam is pirated, with some foreign joint ventures adopting the same relaxed approach to intellectual property rights as local end users.

Losses due to piracy in Vietnam for 1997, according to BSA, run to about $US200 million for publishing, music and films and anything between $US50 million and $US300 million on computer software and CD-ROMs.