Tech businesses among Cambodia’s fastest-growing sectors

By Don Weinland
Thursday, 15 March 2012
Phnom Penh Post

More than one-sixth of Cambodian businesses in 2011 were part of the Kingdom’s information and communications sector, a government census showed.

Of the 182,439 new enterprises that sprang up in the country between June 2009 and March 2011, some 95,590 serviced the sector, according to the 2011 Economic Census of Cambodia.

The census was issued this week by the National Institute of Statistics, the Ministry of Planning and the Japan International Cooperation Agency.

Growth in information and communication technology, or ICT, during the past few years highlighted not only demand for the services, but also the gap between Cambodia’s sector and those of more developed countries, experts said.

A large majority of Cambodian businesses were small, with one- or two-person operations accounting for about 80 per cent of the country’s near 505,000 enterprises, the census showed. Industry insiders confirmed that recent developments in Cambodia’s ICT sector had been made by small businesses.

“There is lots of potential business here, but there aren’t many big local businesses,” Thai Dinh, a Cambodia-based project assistant at International Data Group, said yesterday.

“The market is not big enough for big companies to come in, so any [international] companies are looking to co-operate with local partners.”

The biggest areas of ICT growth in Cambodia were in data centres and server hosting, Thai Dinh said.

Although growth has been quick during the past few years, much of that growth has been in technologies that are outdated in more developed countries in the region, Thai Dinh said.

“Technology that is old in other countries is still new in Cambodia,” he said.

A recent increase in the number of middle-class income earners had helped springboard the ICT industry in Cambodia, Emerging Markets Consulting senior consultant Gordon Peters said yesterday.

The growing market for devices such as smartphones and computers led to the establishment of more businesses, and space in the market remained for data centres, information technology training, web services and web hosting, Peters said.

The lack of shipping services and interbank language – which enables online transactions – detracted from the short-term potential of online markets in the Kingdom, he said.

Diep Ho Seng, CEO of the Phnom Penh-based IT firm Interflex, which specialises in systems integration, said there were relatively few large technology firms in Cambodia, and that recent growth in the sector could be attributed to small start-ups.

“You have people who used to work for bigger companies leaving and starting their own small companies,” Diep Ho Seng said.

The new entrants to the market were opening programming and networking services, he added.