Singapore Companies Eye Vietnam to Navigate Manufacturing Shifts, Green Transition, and the AI Revolution

Singapore’s role as the leading investor in Vietnam has become increasingly pronounced over the last five years. According to the United Nations Conference on Trade and Development , Foreign Direct Investment in Vietnam rose by an extraordinary 59% — from $51.0 billion in 2012-2016 to $81.0 billion in 2017-2022. And Singapore has been at the forefront of this investment surge.

Geographically positioned in the heart of Southeast Asia, Vietnam serves as a critical gateway to major Asian markets, including China and the ASEAN countries, that play a key role in global supply chains. The country's demographic profile features a young workforce and a burgeoning middle class that together supports labor-intensive industries and fuel domestic demand for diverse services and products.

The manufacturing landscape is shifting significantly from China to Vietnam, as escalating labor costs in China and the ongoing US-China trade tensions have compelled companies to explore more cost-effective alternatives. Major brands such as Nike and Adidas have already established substantial production bases in Vietnam. Nike, for instance, produces 50% of its footwear and 29% of its apparel in Vietnam, surpassing production in China. The trend extends to high-tech manufacturing as well.

While still in its early stages of AI development, Vietnam is encountering challenges due to a lack of specialized expertise and inadequate regulatory frameworks. Despite these hurdles, the country is making significant strides under its National Digital Transformation Program scheduled from 2025 to 2030. Plans are in place to establish national centers for big data, supercomputing, and AI innovation centers aimed at attracting startups and investments.

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