Khem Noltheresa
Cambodia has expedited its socio-economic development using digital technology to address the challenges brought about by the COVID-19 pandemic and the Fourth Industrial Revolution.
It introduced the Digital Government Policy 2022-2035 to enhance public service delivery. South Korea has played a pivotal role in supporting Cambodia’s digital transformation journey through policy guidance and capacity building.
The potential impact of South Korea’s digital influence on Cambodia’s private sector is significant, and the digital collaboration between the countries in the private sector has been instrumental in driving the country’s sustainable growth.
Overview Of Cambodia’s Private Sector
Small and Medium Enterprises (SMEs) form the backbone of Cambodia’s business landscape, with a substantial 90 percent of registered businesses falling under this category.
The private sector’s active participation in digitalisation is crucial for Cambodia to embrace its digital economy fully. However, a report by the Cambodia Development Resource Institute (CDRI) suggested that only 10 percent of SMEs in Cambodia use an advanced level of digitalisation while 60 percent are at a basic level and 30 percent others are at an intermediate level in adopting social media platforms and e-payment methods to promote their products and services, engage with customers, and facilitate transactions.
Cambodian businesses have a knowledge gap regarding adopting sophisticated websites and advanced tools for back-end operations.
The core of this problem is that 70 percent of Cambodia’s population is classified as digitally illiterate. This challenge is particularly acute among ethnic minority groups, who face additional barriers due to limited digital skills and access to reliable information, further exacerbating the digital divide in the country.
Understanding The Digital Cooperation Between Cambodia & South Korea
According to the UN E-Government Knowledgebase, Korea ranked 3rd in the E-government development index in 2022, indicating its outstanding capacity to export to other countries. Although over 100 percent of the Cambodian population has access to mobile internet, only 37 percent of its youth can embrace digital advancements.
South Korea has a strong potential to provide funding, share knowledge, capacity-building programs, cultural exchange programs, policy and regulatory support, and research and development (R&D) collaboration, which could contribute to Cambodia’s development and digital adaptation. This support is vital for enhancing digital skills in Cambodia, aligning workforce capabilities with job market demands, and driving socio-economic development.
In the current cooperation framework, the Ministry of Post and Telecommunications, responsible for Cambodia’s digital government policy, collaborated with South Korea’s Ministry of Interior and Safety to establish the Cambodia-Korean Digital Government forum in Phnom Penh from 2021-2023.
This platform facilitated the exchange of knowledge and experiences from Korea’s successful digital government initiatives to ministries, private sectors, and civil society organisations in Cambodia.
Besides this, relevant ministries of South Korea, such as its Ministry of Science and ICT, have also provided invaluable support, ranging from policy formulation to knowledge transfer, to help Cambodia achieve its digital transformation.
On top of government-to-government cooperation, government agencies and non-governmental organisations like KOICA and Childfund Korea, as well as private entities like Woori Bank, are actively engaged in assisting Cambodian ministries and NGOs through financial support, capacity building for civil servants and educators, infrastructure development, and provision of training materials.
Future Digital Influence
South Korea’s commitment to bolstering ICT cooperation will enhance its regional reputation, improve Cambodia’s business competitiveness, and foster overall socio-economic development.
Looking ahead, South Korea’s digital influence promises to catalyse Cambodia’s technological advancement, economic growth, and integration into the regional and global digital landscape.
Cambodia can harness South Korea’s promotion of innovation, intercultural collaboration, and academic excellence in various sectors, including technology transfer and regional investment.
The influx of South Korean investors will bring technological expertise to Cambodia, empowering local businesses to adopt advanced digital solutions and enhance their competitiveness.
For example, South Korea’s expertise in areas like e-commerce platforms and digital payment systems can fuel significant growth in online commerce for Cambodia’s private sector, opening up new opportunities for business expansion and consumer engagement.
Besides contributing to regional digital status, South Korea can strengthen its cultural exports, such as K-POP, K-Drama, and beauty products. Cambodia can distribute or manufacture products locally by partnering with South Korean firms, leveraging South Korea’s technological expertise and branding to enhance its competitiveness and remain on market trends.
Furthermore, South Korea, a more developed country, has a wealth of offerings that can be introduced to Cambodia’s market, providing novelty and attracting consumer interest, thereby creating a win-win situation for both. Cambodia’s effort to diversify its market offers the Kingdom a wide range of investment opportunities.
The introduction of Cambodia’s investment law in 2021 has created a favourable environment for attracting more South Korean investors, strengthening bilateral trade and expanding markets for both parties.
Investing in Cambodia can offer significant benefits to South Korean firms due to Cambodia’s positive perception of Korean brands, influenced by the popularity of Hallyu, and the opportunity to introduce new products and services to a developing market.
However, Cambodia still faces many challenges, particularly regarding the shortage of digital expertise. That is why closer digital collaboration between Cambodia and South Korea is essential to attract more Korean investment, foster partnerships, and enhance digital skills through incentives, financing, and training. Prioritising increased cooperation in education and youth exchange programs with South Korea can also strengthen the relationship between the two countries.
Khem Noltheresa is a senior student majoring in international relations at Paragon International University and a current research associate at the Asian Vision Institute. This article was first published in Cambodianess.
