Cambodia: Addressing skills shortage key to achieving income targets

Even as Cambodia envisions becoming a middle-income nation by 2030, the nation among other
things must have a robust skill force to match the growing needs. The vast inadequacy of not having a parallel skill force would disrupt the 2030 or even 2050 dreams. Khmer Times explores the proverbial slip ‘twixt the cup and the lip – (read) the vision and reality in this case – and comes out with suggestions.

Cambodia is firing on all cylinders on its way to becoming an upper middle-income country by 2030 and a high-income country by 2050, but a perennial skills shortage remains the one major stumbling block in achieving these targets. The Royal Government of Cambodia, however, has started to address this issue in a big way of late.

According to the findings of the Asian Development Bank (ADB), the share of Cambodians engaged in medium- and higher-level technical occupations constitutes only 10.7 percent of the total labour force in the country. This indicates the non-availability of suitably skilled local hands for such jobs and that many industries and service sectors in Cambodia are relying on foreign experts to fill those positions.

A report by ADB released last year said that Cambodia while having achieved notable progress in education, faces a worsening skills gap as the skills taught by technical and vocational education and training institutions do not appear to be adequately linked to those required by industry.

According to ADB, the technical and vocational education and training (TVET) ecosystem of Cambodia lacks coherent leadership and coordination. More than 200 TVET institutions are registered across 13 different government ministries, and there is little coordination among the ministries and agencies providing TVET. The private sector’s involvement in skills development is also still low, it said.

The government is fully aware of the need to address this handicap and is now in the process of addressing the issue with the cooperation of the public and private sectors. It may be recalled that Prime Minister Hun Sen recently called for a massive effort to upskill or reskill 1.5 million youth and the Ministry of Labour and Vocational Training (MLVT) is now seized of the task.

Ministry spokesman Heng Sour told Khmer Times the other day that it will collaborate not only with public (TVET) schools but also with private TVET schools to train the youths from poor families and also retrain the workers.

A bank staff counting riels in Phnom Penh. KT/Pann Rachana

A Concept Paper of ADB revealed that Cambodia has a population of 16.7 million and that 65 percent of whom are younger than 30 years old. An estimated 9.3 million people are active in the labour market, and women account for 49 percent of the total labour force aged 15-64. But the school completion rates in the country remain low, with only 7.4 percent of the labour force having completed some form of post-secondary education.

The labour productivity in Cambodia calculated as $3.6 per hour worked remains lower than that of several other countries in the Southeast Asian region such as Vietnam ($7.3) and Indonesia ($13.1). This low productivity has been widely attributed to the absence of adequate skills education.

But the demographic dividend of having a young population presents an incredible opportunity for the Kingdom to improve the skills of new entrants to the labour market while also upgrading the skills of the existing workforce to match future industry demand.

ADB, a leading development partner of Cambodia in the TVET sector, is supporting the Skills for Future Economy Sector Development Program in Cambodia along with the MLVT, Ministry of Education, Youth and Sports, and Ministry of Economy and Finance.

The project aims to strengthen the country’s skills development ecosystem, deliver industry-led inclusive post-secondary skills training programmes by adopting an industry transformation map, and enhance the skills development fund for upskilling and reskilling of at least 7,000 workers of which 35 percent are women.

Swisscontact is another agency in Cambodia that is deeply involved in addressing the skills shortage challenge. It believes that the development of skills and technical vocational knowledge on many levels is crucial for the growth of the country.

According to Christian Volker Ide, Team Leader of Swisscontact’s Skills Development Program (SDP), only a skilled workforce can enhance employability and labour productivity and contribute to the structural socio-economic transformation and economic growth of the country.

“A flexible TVET and skills development system are important to provide young women and men with the skills needed to find employment and make a living,” he told Khmer Times.

Rajiv Pradhan, Country Director, Swisscontact Cambodia and Program Director of SDP, said that SDP of the Swiss Agency for Development and Cooperation (SDC), implemented by Swisscontact in collaboration with MLVT and the Ministry of Tourism (MoT) is supporting Cambodia in establishing a TVET system which meets the requirements of the growing labour market.

Disadvantaged young women and men and low-skilled workers in ten provinces in the northern parts of Cambodia are supported to gain access to decent employment and increased income through this programme, he said.

Last year the SDP supported 5,358 young women and men to participate in vocational training courses and gain skills needed by companies to find employment.

“Among these, 2,454 graduates were supported to find employment after the completion of the training. All their employers are satisfied with the skills, competence, and performance of the graduates,” Rajiv said.

Christian, meanwhile, felt that there is still a long way to go in this. “Harmonisation of ongoing and planned efforts and the mobilisation and bundling of resources in order to create a qualitative TVET system can make a big difference,” he noted.

Students at Vanda Institute of Accounting in Phnom Penh. Skilled hands for jobs in service sectors is the need of the hour. KT/Khem Sovannara

“The SDP works closely with the government at the national and provincial levels, public and private training providers as well as companies and small enterprises in the hospitality and other sectors, to foster cooperation and the usage of synergies among the key stakeholder of the TVET system to gain better outcomes for Cambodia’s young women and men,” he said.

Mengcheang Nhep, Deputy Team Leader, SDP with Swisscontact, said that there is a rising awareness among key public and private stakeholders about the skills gap and the urgency to take steps to address the matter.

According to Nhep, the involvement of the private sector at all levels of the TVET system is vital to ensure training outcomes are in tune with the skills requirements of industries.

Several different incentives have been created to foster private sector engagement in TVET and skills development such as the Skills Development Fund under the Ministry of Economy and Finance which is supporting public-private partnerships for TVET, where private companies and public training providers collaborate in skills development.

“Collaborate agreements between TVET schools and private companies for internships across the country are formed and several different work-based learning models piloted. For example, SDP is supporting the pilot of a dual apprenticeship programme in collaboration with the private company RMA and the National Polytechnic Institute of Angkor (NPIA) for electrical installation and automotive servicing, where students learn the theory at school and the practice at the workplace,” Nhep said.

All in all, the collaboration and involvement of the private sector in TVET can be expanded further or intensified and better anchored in the TVET system.

Adding to the challenge are the fast-changing technology, digitalisation and artificial intelligence. Thong Mengdavid, research fellow at Phnom Penh-based Asian Vision Institute (AVI) said that Cambodian youths have to be adaptive, resilient, good in physical and mental strength and also need to be creative and innovative to meet these challenges.

“The government must invest more in youth-led solutions by addressing youth issues at the national and sub-national level. Secondly, the government should promote youth empowerment by creating a good study environment, stronger leadership support and better inter-sectoral collaboration between public and private sectors,” Mengdavid said.

The government should also encourage youth to participate more in STEM (Science, Technology, Engineering and Mathematics) applications to encourage new ways of thinking and also to open up their social awareness, he suggested.

Mengdavid appreciated the efforts of Cambodia’s private sector in investing in technological development such as through start-ups, e-commerce, the establishment of digital industries and services, app development, robotics and AI.

He added that both the government and private sector must adhere to the national action plan for the development of Cambodia’s youths. “Give the youths more opportunities to develop their potential, access to the newer and more modern education system and good health services, besides ensuring their participation in decision making,” Mengdavid said.

Steve Paterson, Chief Innovation and Entrepreneurship Officer of the National University of Management felt that the recent launch of ChatGPT by OpenAI is a game changer.  “AI is going to have a huge impact on both students and knowledge workers in the private sector.  Whether it is text, digital design or coding, these AI tools will lead to major productivity gains,” he said, while indicating the challenges ahead for Cambodian youths.

Staff at work in a garment factory in Phnom Penh. KT/Chor Sokunthea

“Microsoft is launching both Microsoft 365 Copilot and Dynamics 365 Copilot which directly imbed AI into their applications so expect that our university students and company employees will soon have access to these products,” Paterson said.

“On the university side, I think we have to rethink what we teach and how we teach and also how we assess the performance of students.  Critical thinking, curiosity and soft skills development will become more important. Accelerated learning models will also become more in demand,” he said.

“Many technical skills will become obsolete, even coding will be radically changed by the emergence of AI as it can also code. On the other hand, many physical or manual vocational skills will be less impacted by AI, so the disruption and impact will be more felt on knowledge workers,” Paterson added.

David Shelters, former Entrepreneur-In-Residence for Mekong Strategic Partners (MSP), called for both the public and the private sectors to make a larger commitment to digital literacy and financial literacy in Cambodia.

“Without a domestic market to consume digital products there will be a shortage of digital jobs and any digital training of Cambodians will not benefit Cambodia if such trained youths leave Cambodia to find digital jobs elsewhere,” David said.

Ky Sereyvath, senior economist and Director General of the Institute of China Studies at the Royal Academy of Cambodia, opined that innovation is key to boosting economic growth. “Skill development plays an important role in improving labour productivity,” he said.

Meanwhile, another ADB report titled ‘Harnessing the potential of big data in post-pandemic Southeast Asia,’ warned that the youth unemployment rate in Southeast Asia could increase by two-fold from pre-Covid-19 levels, adding four million unemployed.

Also, many Southeast Asian countries still experience significant mismatches between skill profiles generated by the education system and those demanded by the market, the report said.

For example, Indonesia reported a skill gap due to the lack of industrial sectors’ involvement in skills development and developing labour market information to capture emerging skills.

In the Philippines, the mismatch between jobs and skills has resulted in unemployment and underemployment among college-educated individuals. This skills gap has widened due to Covid-19 as the pandemic has significantly accelerated digital transformation among businesses.

Digital skills such as using information technology (IT) tools, analysing digital information, as well as collaborating on the use of digital platforms are increasingly being a basic requirement across sectors.

It suggested that big data can be used to address this skill mismatch through better skills gap identification, career advice, tailored learning, and better job matching as well as in developing a responsive education system in the long term.