Cambodia has been one of the fastest growing economies in the world, maintaining 7.7 per cent average growth over the past 20 years.
The country moved from low income status to a lower-middle income economy in 2015.
However, the Kingdom remains a low skills economy with relatively low productivity rates – making it extremely difficult to achieve upper-middle income status by 2030, the economic goal set by the government.
Cambodia needs stronger economic drivers for human capital development, particularly a stronger focus on STEM (Science, Technology, Engineering and Mathematics) and ICT (Information and Communication Technology), to support the Kingdom’s development as well as to support integration into regional supply chains.
The World Bank’s lead economist, Norman Loyza, does not believe that Cambodia can achieve the 2030 economic goal on time.
He has described the ambitious goal as ‘‘a very tall order indeed’’.
He explained that despite an assumption of consistent seven per cent GDP growth over the next 20 years, upper-middle income status is not attainable under existing conditions.
This statement is unsurprising due to the fact that Cambodia still overwhelmingly depends on low-productivity, labour-intensive sectors, ie the garment, construction, agriculture and tourism industries.
It is increasingly apparent that the Kingdom’s current economic and human capital realities are not sufficient to yield upper middle income status by 2030 or even 2040.
Cambodia needs to diversify into more advanced and highly skilled industries.
STEM literacy fits very well as one aspect of economic policy to move Cambodia closer to achieving its self-defined development goals.
STEM literacy can be injected into the workforce through STEM education and vocational training.
The former refers to the academic curriculum that intensifies and heavily focuses on the four STEM subjects to solve real world problems, while vocational training takes place over shorter periods.
STEM literacy that drives innovation is a necessary component for Cambodia to move forward and to address the issue of skill shortages in various industries.
Information technology and health are reported to be the sectors suffering from a severe supply problem as regards highly skilled STEM workers.
The past 20 years of robust growth were driven by foreign aid, foreign direct investment (FDI), preferential trade agreements and an abundant supply of cheap labour.
These realities and Cambodia’s current pattern of development – a strong dependence on garments and tourism – have made the Kingdom quite vulnerable to exogenous economic shocks.
For instance, if the EU does withdraw the “Everything But Arms” (EBA) agreement, Cambodia will lose its tariff-free access to its biggest export market, the EU.
It is predicted that tariffs in the garment and footwear sectors will increase by 12 per cent and 16 per cent respectively, and will cost Cambodia $676 million to pay for the tariffs.
In addition, there have been growing concerns from various analysts, such as Saadia Zahid, Erik Brynjolfsson and Suzanne Fortier, that many current jobs may become obsolete and new jobs will be created as a result of what has been termed “Industrial Revolution 4.0”.
Advanced technology and automation will replace human labour in low-skilled production that historically required massive numbers of low-skilled workers.
Similarly, the emergence of the digital economy with its emphasis on blockchain, big data, 3D printing and artificial intelligence raises further challenges for Cambodia’s development in light of the current state of human capital.
These require comprehensive understanding and technological knowledge to achieve real gains for Cambodian economic growth.
There will be no exceptions for the Kingdom.
In a globalising world, all countries are interconnected and Cambodia will be impacted by the advanced technology mentioned previously.
Technological and skills transfers stemming from FDI will be key to Cambodia’s growth, making it crucial now to support the development of a labour force that is equipped with solid training in STEM fields in order to attract that type of FDI to Cambodia.
The government’s approach to STEM in recent years has been generally positive, in terms of shifting public attention and supporting student interest in STEM-related subjects and education.
Rapidly changing global economy
The Ministry of Education, Youth and Sports has been actively involved and initiated various projects relating to STEM, eg the development of STEM infrastructure (New Generation Schools), the development of STEM curriculums, and various STEM educational and outreach events that aim to ignite interest in STEM subjects to targeted audiences across the Kingdom.
Nevertheless, STEM education is not yet widely adopted and implemented throughout the country.
More STEM-focused schools are required to supply Cambodian youth with the skills and knowledge necessary to participate in a rapidly changing global economy.
Policy-makers should address and encourage private schools to begin to establish and integrate a STEM agenda into their curriculum.
The cost of implementing high quality STEM education throughout the country will be a significant financial burden for the government, necessitating a fresh consideration of public-private partnerships and enhancing the role of the private sector in supporting STEM education in the Kingdom.
Cambodia cannot rely on a low-skilled labour force if growth is to be maintained and upper middle income status is to be achieved – this is simply not feasible in the long term.
Rather, Cambodia needs to move forwards and shift more rapidly towards STEM and ICT in order to ensure the Kingdom’s long term growth and development.
Ban Chanphalla is a Young Research Fellow at Future Forum, an independent think tank based in Phnom Penh. He is currently conducting a research project on integrated STEM education in Cambodia.