PHNOM PENH: In its annual Cambodia Economic Update released this month, the World Bank notes that only 39 percent of Cambodian firms cite inadequate education as an obstacle to doing business.
“Most Cambodian firms are not very concerned about workforce skills,” it says. But “they are a bigger concern among Cambodia’s larger and export-oriented firms.”
According to the bank’s latest enterprise survey of Cambodia, the biggest gripe for local firms is informal competitors (cited by 78 percent of firms).
The next biggest obstacles to business cited by local firms are tax rates (68 percent) followed by corruption and courts (57 percent in both cases).
“An inadequately educated workforce is one of the five lowest concerns among Cambodian firms,” the bank says. “These concerns have declined over time and are lower than most peers.”
Concerns about education differ among firms. For example, workforce skills are far more likely to be cited as a hindrance to business by firms in remoter areas (73 percent).
Skills are also more likely to be cited as a barrier by medium-sized firms (59 percent), garment manufacturers (57 percent), exporters (50 percent) and retailers (49 percent) along with large firms (48 percent) and firms located in Phnom Penh (46 percent).
SKILLS DEFICIT BIGGEST OBSTACLE OVER NEXT FIVE YEARS
“This cross-section suggests that skills are in fact a significant concern for some firms that are likely among the country’s more sophisticated,” the bank says.
“This finding is also consistent with previous research that found that major Cambodian firms (as well as government officials) view education and skills as a growing concern and the biggest obstacle to Cambodia’s development over the next five years.”
To address the challenge, the bank stresses the importance of linking education with industry demand — as countries like Japan and South Korea did to fuel their post-war development, focusing on practical rather than theoretical skills.
RESPONDING TO INDUSTRY NEEDS
“Access to skills, especially for larger and more sophisticated firms, could be enhanced by strengthening partnerships between the education sector, especially vocational education, and industry.
“There also needs to be a greater focus on imparting cross-sectoral modern and relevant skills to students,” the bank says, referring to digital and technological skills along with “socio-emotional”, green, and advanced cognitive skills.
At the same time, investing in digital and physical infrastructure — especially high-speed broadband — is “critical” to help adopt advanced technologies.
“Improving education and workforce skills, particularly in digital and technical areas, is essential to help firms innovate and stay competitive.”
The bank meanwhile calls for incentives for firms to invest in advanced technologies, develop training programmes and partnerships and expand their global networks to gain insights into international best practices, technology adoption, and competitive strategies.
In a separate report earlier this year, the World Bank noted how South Korea’s education sector responded to industry needs when its companies started licensing technology from Japan, fueling demand for other skilled professionals.
“The South Korean government responded in turn,” the bank said. “The Ministry of Education set targets—and increased budgets—for public universities to help develop the new skill sets demanded by domestic firms.”
‘NEED TO COORDINATE WITH THE PRIVATE SECTOR’
The Asian Development Bank (ADB) agrees. “To avoid skills mismatches, Cambodia needs to invest in skills development and training in close collaboration with the private sector,” the ADB said in a study on economic diversification released last month.
Technical and Vocational Education and Training (TVET) and tertiary institutions “need to coordinate with the private sector to better align their curricula more closely with employers’ needs,” the study said.
“Cambodia has an opportunity to leverage its young population and improve its competitiveness through innovation and technology by creating a better link between industry and education and promoting entrepreneurship.” AKP