Startup culture is about to revolutionise Cambodia’s primarily agricultural economy and recreate it as a citadel of commerce and technology. All of the systems are in place for digital innovation to take over. According to a joint report by Google and Temasek, the region remains the world’s third-largest base of Internet users, possesses an online economy that is projected to be worth over $200 billion USD by 2025, and adds 3.8 million new online users each month.
Individuals seeking to launch Cambodia into the future are rapidly realising that it’s time for the country to strike while the iron is hot. According to Thomas Hundt, CEO of Smart Axiata
[the startup scene in Cambodia] has the building blocks in place for an exciting future – high mobile phone penetration, one of the cheapest mobile Internet charging rates in the region, two-thirds of the population are under 30 years old and are increasingly digitally literate, strong collaboration and support between government and private sectors … and more.
This reality is not lost on high-ranking CEOs and government officials, as private and public sector interests are fully backing digital innovation. For them, it is clearly a win-win situation.
Startups accelerate economic growth, improve public services, and provide local jobs; thus, if the government succeeds in transforming Cambodia into a nascent startup hub, it may just speed the country through the traditional stages of development to cement it as a leading regional power.
Thus far, the country’s energy and drive are indisputable. Simply listen to Aun Pornmoniroth, the Minister of Economy and Finance, express the government’s stance on startup culture:
In the context of globalisation and global integration, Cambodia certainly cannot avoid the impact of the Fourth Industrial Revolution. That requires the government to focus on seizing opportunities.
Striding into the age of startups
Cambodia has created a strong foundation from which to launch their startup ecosystem, as evidenced by their protocols and policies. They have developed an information and communications technology (ICT) Master Plan, drafted an e-Government Master Plan, and established a Data Management Centre. Their government policies tackle areas such as tech-based educational programmes, incubator consultations, and regulatory procedures. They also aim to implement 100% broadband coverage in urban areas and 70% in rural areas by 2020.
The following four strides suggest even greater potential for success:
Cambodia’s first digital technology conference
For three days, from March 15th through the 17th, daily crowds of thousands converged at the 2019 Cambodia Outlook Conference to take part in the theme of ‘Digital Transformation Toward Industry 4.0’. This event is a carnival of collaboration and communication between technology experts and enthusiasts, and it attracted high-ranking government officials, ASEAN Telecom and ICT Ministers, and even local high school students.
Ultimately, the event laid the foundation for a digital Cambodian economy and showcased the country as a superior location for investment in information and communication technology. Entrepreneurs grew their networks and met with potential investors, and experts discussed policy development, legal frameworks, and educational initiatives that could pave the way to a digital future.
These discussions will continue to disrupt the status quo long after the close of this conference. According to His Excellency Dr. KAN Channmeta, Secretary of State at the Ministry of Posts and Telecommunications:
[the government] is taking measures to ensure that [these initiatives] allow digital technology to capitalise on investment opportunities, and efficiently and effectively deploy capital to high potential projects.
Innovative digital policies
No longer satisfied with drafts and conferences, Cambodia’s government is taking concrete measures to solidify their digital progress. As prime minister Hun Sen announced at the 2019 Cambodian Outlook conference, he has instructed the Supreme National Economic Council (SNEC) to pursue a working group that will focus on formulating policies for a digital economy. In order to raise the region’s socio-economic levels of development via science and technology, they plan to focus on three areas: building infrastructures such as e-payment systems and logistics networks, developing a digital ecosystem, and championing government digitalisation.
$5 million USD startup fund
Private sector businesses are buying into the startup ecosystem as well. According to Thomas Hundt, the CEO of Smart Axiata (one of the country’s largest mobile operators)
What we have realised is, there is a significant part of the digital industry missing … mainly funding.
Thus, his corporation is bankrolling a massive $5 million USD startup fund in partnership with investment consultancy Mekong Strategic Partners.
In addition to seed money, Smart Axiata and Mekong Strategic Partners intend to equip local startups with the skills needed to take their businesses to the next level. They will provide mentoring, marketing assistance, and access to Smart’s base of over 8 million subscribers. Soon, startups will be able to draw upon valuable resources for financing, marketing, production, and training, and access support systems that the country has never before had in place – and this is just the tip of the iceberg.
Private-public partnership to boost Cambodia’s eCommerce sector
Cambodian e-commerce startups struggle to access global markets and transport their goods and services across regional borders. A recent agreement signed by the United Nations Development Programme (UNDP) and 4PX Express, a Shenzhen-based logistics, software, and consulting firm, aims to overcome those barriers. By sharing costs and responsibilities, they plan to support small and medium-sized enterprises (SMEs) through funding and training on Alibaba.com’s platform.
Alibaba is a behemoth of modern eCommerce, and is China’s (if not the world’s) largest online commerce company. Therefore, through teaching Cambodia’s founders how to navigate and utilise Alibaba.com, the program will allow startups to easily ship their products and services abroad and side-step former issues with international transport.
Once these floodgates open, not only will Cambodian founders reach the wider world, but foreign vendors from giant economies such as China will be able to connect with them via e-commerce platforms. This holds the potential for exponential economic growth.
Cambodia: the startup scene of the future
A rapid recap: in years past, Cambodia has lacked the initiatives and investment to transform its economy into an engine of technology and innovation. Major issues have stood in the way of the ‘Digital Economy 4.0’ – namely, a lack of government coordination, non-existent digital policies, a technologically underskilled workforce, and limited support for local startups.
Cambodia’s startup system is no longer in its infancy, and discussion of digital technologies and innovations has become the de facto focus of the private and public sectors. According to Cambodia Development Resource Institute (CDRI) chairman Mey Kalyan, in a mere three months, the Kingdom has held three conferences on digital technologies to brainstorm ideas and strategies for the future. The challenges Cambodia faces are no longer being pushed to the side; they are being addressed and brought to the front and centre of the country’s focus.
Cambodia’s strides toward strengthening its startup ecosystem are not going unnoticed. According to Khuon Sophorth, CEO of Morakot Technology, (an alternative banking software):
More and more venture capital [firms] are interested in Cambodian startups because Cambodia is among the fastest countries to adopt new technology. There are big opportunities out there. If we could help create more successful startups in Cambodia, chances are we could sell our products and services to other countries in the region, as well as the world.
This is a viewpoint shared by many high-ranking businessmen and senior officials within the Kingdom, as digital innovation and technology are heralded as the driving forces that will allow Cambodia to achieve its long-term vision of becoming an upper-middle income country by 2030 and a high-income country by 2050.
Between conferences, policies, startup funds, and trade partnerships, Cambodia is reimagining itself as a centre for digital and technological innovation that is friendly to startups of all nationalities. That’s why, regardless of where you’re from or what your idea is, you should give Cambodia careful consideration if you’re thinking about launching or investing in a startup. The country supports international and local entrepreneurs, supplies strong incentives, and controls a digital ecosystem that’s about to take off.
What’s stopping you from powering into the future along with them?