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Future Forum's young research fellow, Morn Piseth was published in Kiripost on November 19, 2024. Check out the original article HERE, and read it below!
Digital adoption has the potential to be a very impactful tool for Cambodia in a variety of sectors, with a huge variety of potential applications - from business, education and healthcare to government services.
For instance, in the garment industry, analysts have argued that digital wage management has the potential to increase factory payroll efficiency, lower the cost of managing wages and increase access to financial services for the mostly women workers.
Digital shopping is booming in Cambodia, allowing small businesses to reach new customers, and allowing shoppers to find and buy the goods they want with ease. Cambodia’s revenue in the ecommerce market amounted to $970 million in 2021, and revenue from this sector is expected to grow by 16.4 percent per year, leading to a market volume of $1.8 billion by 2025.
Beyond economic gain, Cambodia also has the potential to leverage the digital transformation to improve access to public services like healthcare and education. In Cambodian healthcare, a digital transformation could mean leveraging new tools to increase access.
For instance, greater use of telemedicine might allow Cambodians who live in remote areas to be seen by healthcare professionals using video chat platforms or mobile applications. In education, increased access to online learning tools could allow learners, both in and outside of the classroom to benefit.
But, as Cambodia charts a course towards greater integration of digital tools and services into all aspects of our lives, it’s important to consider the challenges that will need to be overcome as well as the potential pitfalls that should be carefully avoided. This digital tightrope needs clear frameworks and roadmaps for Cambodia to manage both challenges and opportunities of digital adoption.
Potential challenge of mismanagement of digital transformation
There is no doubt that the rise of digital transformation has revolutionised people’s way of living, including access to information, communication and economic opportunities. However, due to the unequal access to these technologies, this has created a huge social inequality leaving disadvantaged groups behind.
The limitation of basic literacy and internet access is particularly harmful for rural communities, women and ethnic minorities.
A switch from analog to digital tools gets particularly complicated when government services are the subject of digitisation efforts. Moving government services online is a highly complex operation that requires high-level precision when it comes to data privacy and security, requiring significant amounts of public trust in governmental institutions.
According to a 2020 survey by Konrad Adenauer Stiftung on Cambodian trust in e-government services, only 39 percent of Cambodian respondents said they trust government agencies in general, 47 percent trust state government agencies to carry out online transactions, and only 13 percent of respondents feel safe interacting with government agencies online.
This lack of trust is a huge issue that the Cambodian government must address head-on as it strives to move into a digital-forward era.
Moving vital government services online also means putting Cambodian citizens in a position where they need to be able to confidently and safely navigate critical tools. While digital literacy rates in Cambodia are improving, there are still too many people who are at risk of being left out as a result of digital governance.
Cambodian governmental agencies would do well to consider the case of Japan’s My Number Card program to understand how digital initiatives in the public sector can go wrong. In Japan, many administration services still require in-person action, including banking, tax filing, paperwork for moving house, etc.
When the My Number Card programme was launched in 2016, the goal was to streamline administrative works and move these processes online by assigning a unique digital identification number to each citizen.
The rollout of this programme has been a mess. Public confusion regarding its intentions and security concerns have led to low adoption. In 2019, three years into the programme, a mere 15 percent of the Japanese population had registered.
Confusion and glitches have plagued the programme. In 2023, a glitch in the system led to some My Number users receiving the documents of strangers when they requested their own official family registers. It came out in 2023 as well that as many as 130,000 My Number accounts were linked to the wrong bank accounts.
The poorly handled rollout of this programme overall has created public frustration and a further loss of trust in the government’s ability to manage confidential data. Cambodian officials would do well to learn from Japan’s trials and errors to consider what to avoid in our own e-governance roll-outs.
Other major digital risks
Another concern on immediate digital transformation is cybercrime. Cambodia digital transformation opens the door for Cambodia to a connecting world while also exposing the country to the growing threat of cybercrime.
A 2023 report from the ASEAN Foundation found that only 30 percent of Cambodia's population possess basic digital literacy skills leaving the rest vulnerable to online attacks and scams.
Furthermore, Cambodia has witnessed a significant rise of cybercrime complaints. In 2022 alone, the complaints increased by 60 percent compared to 2021, according to the Ministry of Interior’s Anti-Cybercrime Department.
Another issue Cambodia must be following closely is the way in which digital transitions, particularly rapid automation and technological advancement, are changing the global labour market. While this revolution creates new market opportunities, it also carries risks along the way.
Countries like Cambodia are at risk of job displacement as a result of digital shifts that would lead to increased unemployment, income inequality, and economic pressure. The International Labour Organisation (ILO) has estimated that 57 percent of all Cambodian workers (or over four million jobs) face a high risk of automation.
Particular segments of workers are more vulnerable to this phenomenon than others, including women, young workers and primary school graduates. The ILO has also found that Cambodian women are 50 percent more likely to be employed in an occupation at high risk of automation compared to men.
Strategies for Balancing Progress and Risks
We know that the digital transformation has the potential to bring opportunities for economic development, improved governance, and increased connectivity. However, this rapid transition also clearly brings significant risks including job displacement, cybercrime, social inequality and loss of public trust. To mitigate this complex landscape, Cambodia needs a strategic approach that can balance the opportunity and risk.
Cambodia’s digital infrastructure faces issues of unequal access which hinders progress and exacerbates existing inequality. First, the Cambodian government needs to expand internet coverage by partnering with the private sector.
Public-private partnerships can incentivise telecom companies in rural and remote areas while government initiatives can provide affordable internet access points. These partnerships should prioritise investments in fibre optic networks. Compared to traditional cables, fibre optic networks ensure faster and more reliable connection which can support online activity and ecommerce growth. Additionally, public-private collaborations should promote alternative solutions for enabling affordable digital access for underprivileged communities.
Even before Cambodian institutions consider shifting services online, we need to be prioritising equipping Cambodians with skills for the digital age. Investing significant efforts into this topic will ensure that ordinary people are set up for success when interactive with critical services online.
Likewise, digital training will allow us to move towards future-proofing the Cambodian workforce. The demand for skilled workforce equipped with specialised knowledge and expertise in digital is rapidly increasing in this digitalized society.
To ensure qualified digital workforce training, the government and public sector should collaborate with educational institutions to integrate digital literacy training into existing curriculum. And digital literacy should not be siloed from other subjects. English classes, history classes, mathematics classes, can all be opportunities to practise digital-forward skills.
The educational institution can also consider offering specialised programmes in the field of data analysis, cyber security and digital marketing to create a generation of young Cambodians who are equipped with skilled catering to the growing demand for these skills in the digital economy.
Cambodia is also in need of a strong and effective regulatory framework to make sure that the country can navigate the digital transition safely and securely. At the moment, for instance, the country does not have clear legal protection for user data. The international standard, EU’s General Data Protection Regulation (GDPR) should be a leading example for Cambodia to follow in this regard.
The GDPR grants individuals extensive control over their personal data with specific guidelines for companies and government actors in terms of data collection, storage, and usage. Businesses operating in the EU or handling the data of EU citizens must comply with this regulation.
The GDPR has significantly enhanced data privacy rights and accountability within the EU. This has led businesses to adopt stricter data security measures and citizens have greater control over their personal information.
Cambodia can learn from GDPR by generating its own data privacy regulation that grants individuals the right to access, change, and erase their personal data. It should be mandatory for businesses to obtain informed consent for data collection and ensure secure data storage management.
Implementing mandatory cybersecurity standards for businesses handling sensitive data can minimise the risk of data breaches. To ensure the critical infrastructure protection, the Cambodian government can enact laws to safeguard critical infrastructure such as power grids and communication networks from cyberattacks and ensure the effectiveness, transparency and critical law enforcement. Cambodia’s draft data protection law does follow the GDPR model in some regards, but the ways in which this law deviates from the EU’s best practices have raised concerns from analysts.
The digital transition is coming for Cambodia. Effective preparation for these changes can mean the difference between reaping the rewards of digital innovation and falling prey to the significant risks this transition poses.
Strong preparation, including effective digital literacy training, strong and effective data protection laws, and inclusive digital infrastructure, will mean that all Cambodians can participate safely, securely, and confidently in our digital future.
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