Vietnam’s education market has undergone significant transformations in recent years, owing to several factors such as government policies, rising income levels, and changing societal attitudes towards education.
The education system in Vietnam is structured in a 5-4-3 format, which includes 5 years of primary school, 4 years of lower secondary school, and 3 years of upper secondary school. In most of the big cities, education is free and compulsory until the end of lower secondary school.
This article will provide an overview of the current situation of the Education Market in Vietnam, the opportunities available in the market, and the trends shaping the industry. Additionally, it will also highlight some of the challenges faced by the Education Market in Vietnam and the need for addressing these issues to improve the sector further.
1. Overview of the Education Sector in Vietnam
The Education Market in Vietnam has seen significant growth over the past few years. According to Statista, Vietnam’s education and training sector contributed around 3.84% to the country’s overall GDP in 2021, with a value of roughly 325.4 trillion Vietnamese dong. This amount is part of the total GDP of Vietnam, which was nearly 8.5 thousand trillion Vietnamese dong in the same year.
The number of schools in Vietnam decreased slightly from approximately 26,340 in the school year of 2020/21 to 26,250 in 2021/22. In the school year of 2021/22, there were overall 18 million pupils in Vietnam, including about 9.2 million in primary education, 5.9 million in lower secondary education and 2.8 million in upper secondary education. This explains why Vietnam has a relatively high literacy rate of over 95 percent, one of the highest in the Asia-Pacific region.
Annual governmental expenditures on Education
According to the Vietnam Education Industry Analysis Report for 2011-2020, Vietnam’s annual spending on education was approximately 17%-18% of its total budget. This figure falls short of the target rate of 20% set in the Law on Education 2019. However, Professor Le Anh Vinh, the rector of the Vietnam Institute of Education Sciences, notes that this expenditure rate is still higher or on par with some countries, such as the United States (13%), Indonesia (17.5%), and Singapore (19.9%).
|Expenditures (in thousand USD)
Number of new businesses for education in Vietnam 2016-2021
Around 2.9 thousand new businesses in the education sector were established in Vietnam in 2021, out of the total of approximately 116.8 thousand new enterprises in the country. The Vietnamese government’s relaxed regulations on investing in education have led to the emergence of more private education institutions, although public schools still have a reputation for providing affordable and well-regarded degrees. However, public schools are facing challenges, such as an increasing student-teacher ratio. Private education institutions, meanwhile, offer various advantages, including smaller classrooms and international curricula that cater to more affluent parents and students. Consequently, private education, including private universities, has seen an increase in student enrollment in recent years.
Sub-sectors in Education
In the EdTech sub-sector, Vietnam ranked among the top 10 rapidly expanding online education markets worldwide in 2019, with a yearly growth rate of 44.3%. The country currently boasts over 200 EdTech companies, and its user base extends to 2 million individuals nationwide. The Education Technology market size in Vietnam is estimated to be worth at least US$2 billion, according to the International Trade Administration.
2. Opportunities & Challenges in the Education Market in Vietnam
The Education Market in Vietnam is full of opportunities for those businesses interested in investing in this sector. One of the most significant opportunities is the country’s young and rapidly growing population. With a population of over 97 million people, Vietnam has a vast pool of potential students.
Moreover, the government of Vietnam has recognized the importance of education and has demonstrated its commitment by increasing the education budget in recent years. The government has also introduced favorable policies to encourage private sector investment in the education sector. As a result, there has been a surge in private educational institutions in the country, providing various options for students.
Another opportunity in the Education Market in Vietnam is the rising demand for international education. Many Vietnamese students aspire to study abroad, and they are willing to pay a premium for international education. Thus, there is a growing demand for institutions that offer international curricula or have partnerships with foreign universities.
Despite the opportunities, the Education Market in Vietnam also faces several challenges that must be addressed for sustained growth. One of the most significant challenges is the lack of quality education, particularly in rural areas. There is a stark difference between the quality of education in urban and rural areas, with urban areas having access to better educational facilities and resources. This gap needs to be bridged to provide equal opportunities to all students.
Another challenge is the shortage of qualified teachers. Many teachers in Vietnam are not adequately trained, and there is a shortage of qualified teachers, particularly in specialized fields such as science, technology, engineering, and math (STEM). To address this challenge, the government needs to invest in teacher training programs and attract more talent to the profession.
Furthermore, the education system in Vietnam is heavily focused on rote learning, with less emphasis on critical thinking, problem-solving, and creativity. This has led to a skills gap between what is taught in schools and the requirements of the job market. To address this challenge, the education system needs to focus on developing these skills to prepare students for the future workforce.
3. Forecasting Trends in the Education Market in Vietnam
The Education Market in Vietnam is expected to see several future trends in the coming years. One of the key trends is the continued growth of the EdTech sector. With the increasing use of technology and the internet, online learning has become more popular in Vietnam, especially during the COVID-19 pandemic. This has resulted in the emergence of numerous EdTech startups that offer a wide range of services, such as online courses, language learning, and test preparation. The use of technology in education is expected to continue to grow as more students and parents seek alternative and flexible learning options.
Another trend is the increasing demand for international education. As Vietnam’s economy grows, more families are able to afford to send their children to study abroad. However, with the ongoing pandemic and travel restrictions, international schools and universities have become less accessible. This has led to the emergence of international schools and universities in Vietnam, which offer foreign curricula and qualifications. These institutions are expected to grow in popularity as they provide a more affordable and convenient option for students who want to study abroad.
Additionally, there is a growing trend towards vocational education and training in Vietnam. With the country’s shift towards an industrial and manufacturing-based economy, there is a greater need for skilled workers in technical fields such as engineering, mechanics, and electronics. Vocational schools and training programs are expected to see an increase in demand as students seek to acquire the skills needed for these industries.
In conclusion, the education market in Vietnam presents significant opportunities for businesses, especially in the EdTech sector. With a large and young population that values education, there is a growing demand for quality education and innovative learning solutions. However, businesses must also navigate the challenges in the market, such as the need to improve the quality of education and address unequal access to education. By understanding the current situation, opportunities, and trends in the education market in Vietnam, businesses can position themselves to succeed and contribute to the development of the education sector in the country.
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