In mid-June, Viet Nam’s National Assembly approved the Law on Cybersecurity by an overwhelming almost 87 per cent majority, a move that has sparked a great deal of debate over how technology giants such as Facebook and Google will cooperate with the government in its policing of the web.

These complexities are perhaps more a topic for political commentators. What interests me – and what should interest all savvy investors – is Article 26 of the new law. This stipulates that from the start of 2019, firms, whether domestic or foreign, that collect, analyse and commercialise Vietnamese users’ information will have to store that data on local servers. It will also force foreign technology firms to establish representative offices in Viet Nam if they want to continue doing digital business here.

A not-to-be-missed market

Southeast Asia is one of Facebook’s fastest-growing regions and Viet Nam, with its explosive economic growth and dynamic young population, must be a top priority for the company. Likewise, the country’s rapidly-expanding middle class is creating a wealth of opportunities for retailers and service providers of all kinds, meaning that Google must be very keen on the Vietnamese market too.

It seems quite unlikely to me, then, that Facebook and Google will not accede to the authorities’ requests. There have been protests from the likes of the Asia Internet Coalition (a group representing Facebook, Google and other foreign tech firms), but we should bear in mind that Facebook has “played ball” before by restricting or removing content rather than violating local law. I believe we will see foreign tech firms setting up servers and offices here – and soon.

As developments in Viet Nam’s growth story go, this may appear fairly small, especially if the minutiae of the technology industry don’t particularly interest you. In fact, I think this will be huge news for investors if it all comes to pass.

The prime reason is that data centres, the facilities housing large-scale servers, are very big business indeed, creating and sustaining a whole technological ecosystem that can prove a massive boost to the economy. There are the infrastructure, connectivity and services required to support a data centre, all of which create a mass of sub-sectors and technology-related jobs. And, if Facebook and Google establish servers and representative offices in Viet Nam, in time whole “campuses” might follow. This must be the stuff of dreams for the country’s young graduates.

Growth begets growth

Then, there is also all the associated economic activity that would come along. As is well known, Samsung’s factories in Thai Nguyen and Bac Ninh provinces have transformed the locations in which they are based. Whole service economies have sprung up to feed, entertain and accommodate their workers and executives, along with whole networks of suppliers to the factories themselves, making these provinces among Viet Nam’s richest. Thus, growth begets growth, not to mention the creation of intellectual capital so vital for Viet Nam to thrive in today’s data economy.

To cite just one study, Digital Realty estimates that on average each new data centre adds up to US$622 million to the UK economy, with benefits accruing right across the spectrum of economic activity. It is not beyond the realms of possibility that Viet Nam’s economy could start to receive boosts of a similar order before too long.

As economists have pronounced, “data is the oil of the digital era”, and Article 26 could mean that Viet Nam is soon to strike it rich, in a roundabout way. Investing successfully is not just about pure numbers, or even facts, but rather stories.

The Vietnamese data localisation story is one that savvy investors should certainly keep a close eye on.