ABeam: AI, Costs and Visas Threaten Vietnam’s Role in Japan’s Economy
ABeam Consulting warns rising costs, visa hurdles and AI could undermine Vietnam’s role in Japan’s economy, despite Vietnamese workers’ language advantage.
HO CHI MINH CITY — ABeam Consulting said Vietnam has become indispensable to Japan’s manufacturing and services chains, but the firm warned rising labor and operating costs, visa bottlenecks and the long-term impact of artificial intelligence could erode that position. Vietnam’s role in Japan’s economy, driven by a growing pool of skilled Vietnamese workers and close industrial ties, faces a mix of immediate and future challenges, the consultancy said. The assessment highlights tensions between strong demand from Japanese firms and structural constraints within Vietnam and Japanese immigration policy.
ABeam Consulting issues strategic warning
ABeam’s analysis frames Vietnam as a critical partner for Japanese companies expanding production and procurement beyond China. The consultancy pointed to extensive supply-chain linkages, investor interest and a workforce with practical skills as the backbone of that relationship. Yet the firm also flagged systemic risks that, if left unaddressed, could reduce Vietnam’s attractiveness to Japanese investors over time.
Language proficiency and skills give Vietnamese workers an edge
Japanese companies continue to cite Vietnamese workers’ proficiency in Japanese and technical competence as key advantages. Recruitment drives and on-site training programs have increasingly focused on Vietnamese hires, who often adapt quickly to Japanese workplace practices. That language and cultural fluency has helped smooth operations at Japanese plants and service centers in Vietnam and inside Japan.
Visa restrictions and trainee-system stress create friction
Despite their advantages, Vietnamese workers face visa hurdles when seeking to relocate to Japan, according to the report and interviews with labor consultants. The technical intern training program and other visa channels have been criticized for administrative bottlenecks and inconsistent approval rates. These restrictions constrain the mobility of labor that Japanese firms say they need to fill shortages in manufacturing, construction and caregiving sectors.
Rising wages and operating costs threaten competitiveness
Economic growth in Vietnam has pushed up wages, rents and other operating expenses, narrowing the cost gap with alternative locations in Southeast Asia. Japanese firms that relocated to Vietnam for lower costs now face tighter margins as local prices rise and supply constraints emerge. ABeam warned that without productivity gains or policy support to contain input costs, some companies might reassess investment plans or diversify to other markets.
Artificial intelligence introduces a long-term disruption risk
ABeam highlighted artificial intelligence as a structural concern that could reshape demand for labor and certain services supplied by Vietnamese workers. Automation and AI-driven processes in manufacturing, logistics and back-office work may reduce some labor-intensive roles even as they create new, higher-skilled opportunities. The consultancy urged both Japanese investors and Vietnamese policymakers to accelerate skills development in areas complementary to AI adoption.
Companies and policymakers propose targeted responses
Japanese firms and Vietnamese officials are already exploring measures to address the flagged risks, industry sources say. Proposals include expanded vocational training focused on digital skills, streamlined visa arrangements for skilled workers, and incentives for productivity-enhancing investments by manufacturers. Some companies are piloting automation alongside upskilling programs to preserve competitiveness while maintaining local employment.
A Vietnamese technical intern trainee working alongside a Japanese colleague at a manufacturing plant in Tobishima in October 2025 has become a visible symbol of the bilateral labor ties that underpin much of the relationship. Photos and field visits show collaborative shop-floor practices, but they also underscore the practical limits of scaling that model when costs and regulatory hurdles increase. For many Japanese managers, maintaining access to reliable local talent remains a priority even as they weigh the forces reshaping global production.
The assessment by ABeam arrives amid broader geopolitical and economic shifts that are prompting Japanese firms to diversify supply chains and rethink labor strategies. Vietnam’s strong trade links with Japan and its accumulated experience hosting Japanese investment give it clear advantages, but those strengths are not guarantees. How quickly Vietnam and Japan adapt—through migration policy, education and corporate investment—will shape the durability of Vietnam’s role in Japan’s economy.
Longer-term outcomes will hinge on coordinated action from both governments and the private sector to manage cost pressures, modernize skills training and create visa pathways aligned with labor market needs. The coming years will test whether Vietnam can convert its current advantages into sustainable, higher-value partnership with Japan, or whether rising costs, regulatory frictions and technological change will prompt a strategic recalibration by Japanese companies.
