After the announcement of the winners of Cambodia’s ICT Awards, we interviewed some of the winning startups to find out about their progress and takeaways from the event. To receive a different perspective on the Kingdom’s ICT sector, we sought the expertise of Dr Sopheap Seng, President of the National Institute of Posts, Telecommunications and ICT (NIPTICT).
Through its efforts in boosting the ICT sector in Cambodia, NIPTICT aims to become a premier public research and training institution in the Kingdom and the region. They provide education, research and training in the fields of posts, telecommunications and ICT. With degrees and professional trainings in these areas, NIPTICT also seeks to inculcate innovation and entrepreneurship in students.
As the organiser of the Cambodia ICT Awards, NIPTICT will be doubling the stakes of next year’s competition. Additionally, participants can look forward to more attractive prizes and a greater leverage for their business.
We speak to Dr Sopheap to find out his views, opinions and knowledge on the ICT sector in Cambodia.
This article has been edited for length, clarity and flow.
What are your views on the current state of the ICT sector in Cambodia?
Compared to last year, there are more applicants at the Cambodia ICT Awards (CICTA) this year. Interestingly, all of them are in business, except for those in the research and development sectors. We have different categories for the competition, so the quality of the companies and their applications is really, really good. It shows that the industry is moving. It shows that we are starting to have some real applications; it shows that they are starting to make money. I think it’s very encouraging as compared to the last few years, as we had some ideas and prototypes, not businesses. Even in the government side, you see a lot of real applications that have been deployed, ranging from environmental to the protection of the less fortunate. It’s very diversified in ideas, tools and business points of view. It’s a very encouraging sign. The ICT industry is here. A few years ago you couldn’t find a platform that could allow you to do something and get paid for it, so the business is here.
Now it’s really about the market, there are signs that the market is quite ready – people are starting to buy online, use digital services, and the Internet is growing very fast. You can expect a growth in more than 60% next year with all the investments that we see. Investments are starting to move forward. All this indicates that Internet users are growing very fast, and we have the market, the users. But what is really stopping us from growing locally and regionally? I think it’s really the funding mechanisms. Who will understand this and start to invest? This is very important. Not many countries have done this successfully, where it can bring success regionally and success locally.
Why is it so important to develop the ICT sector in Cambodia?
We all know the importance of a developed ICT sector from the experiences of a lot of countries. This is apparent in a lot of reports from organisations such as the World Bank and the United Nations. Recently, I heard that the United Nations said that access to the Internet is part of human rights. It’s amazing right? These reports show that a 10% growth in IT services translates to a 1% growth in GDP.
We know that IT development will contribute to social economy, to business development, to the inclusion of everyone. I think there are no doubts anymore; there are no questions to it. The only thing to really pay attention to is to avoid creating a bubble. The IT sector can very easily to become a bubble. We, along with the government, have to make sure that a lot of players don’t create a bubble here in the fragile markets. Any business or investment made should be clever and cost effective.
The IT sector tends to be like this, out of 10 projects, you will have one project that is successful. In Cambodia we should not go this way, we don’t have the resources for that. Not to stop creativity of course, but to try and make sure that everyone invests wisely and avoid creating a “bubble” environment where we might lose a lot of money. However, we need to create an environment that inspires people to have a lot of ideas, so I think a good compromise of this is to let the industry grow healthily with regional competitiveness.
What do you hope to achieve with the CICTA?
The idea of this competition is to make a difference from other competitions. There are a lot of business competitions out there, and most of them really focus on startups and students. At the end of the day, we can see that the winners don’t really benefit from the fact that they won. Perhaps this is because the prize is not that big, and these winners are not actually in a business. Even if someone is interested, he or she will not be able to invest in them. The media coverage doesn’t benefit them like it should as their service is not available yet.
These winners cannot maximise the advantages of winning because they are not ready. This competition is more of an industrial and business competition rather than just a competition of ideas. It is also to benchmark the success of the winners, which comprises of a lot of young people, such as the founder of BookMeBus. I think that this is really an inspiration for a lot of young people. Cambodia is a society that works based on examples. You can see this in everyday life, when a shop opens and it’s successful, a lot of similar shops will open nearby. I think competitions like CICTA, with winners that are really young and doing something in the business, will encourage other young people to start something. And with regional integration, it’s the time to really start something in Cambodia. There are a lot of opportunities out there.
Finally, I think it’s also time to send our best companies and our best people to competitions in the region. There are many different competitions, one of them is the ASEAN ICT Awards. In the last few years, there were no contenders from Cambodia. Last year we had one, this year we have 12. I hope we will have more winners. It’s not just about quantity, but quality.
At NIPTICT, our mission is training. We provide degrees in telecomm and networking, software engineering and ecommerce. We also have a mission to promote innovations and entrepreneurship. In our sector, the digital sector, I think young people stand a chance to start something. The cost of starting a digital company is virtually zero. You don’t need to have big investments in the beginning. To grow, you need a lot of investments, but competitions like CICTA should leverage them faster to the spotlight, so they get the coverage. Good ideas, good startup businesses can quickly have recognition, and perhaps go further.
What do you think can be done to boost or leverage this sector?
Without a funding mechanism, it is quite hard to attract investors, to boost people’s confidence in investing in technology, not land. It’s very hard, it’s the same even in countries like Malaysia, Thailand, Vietnam, but they’re luckier. In Vietnam for example, they have people from Silicon Valley that have the experience and networks. Some of them make a lot of money and they come back to invest with the logic that if they make a lot of money with IT, they will invest more in IT. In Cambodia, the problem is that not many people make a lot of money with these kinds of platforms in the IT sector, so people don’t invest in that. We need to have some success stories that will attract more investments.
Vietnam has wealthier people in the United States, and when they go back home to invest, they build businesses while maintaining their businesses back in the US. In Cambodia, we don’t have this. The Cambodian community in the States is not big enough, nor are they rich enough or have that kind of mentality. You can see that local investors have just started investing, but we need more money. Regional investors need more recognition, that’s why the competitions at home and regionally are very important to show that our companies are starting to emerge, so we can see Cambodian companies that win with real businesses.
What do you think the future of ICT in Cambodia will be?
Dynamically, it’s growing. I’ve been in the education sector since 2002, so it’s been several years now. I’ve seen many companies that create and close, create and close. One thing I’ve realised about the past 10 years is that this often happened to IT companies and most of them were outsourcing companies. I think the reason is that there was no real industry here. A lot of companies that do IT services were in the outsourcing business. And when you outsource, the value added is low. The reason that other countries outsource here is that we are cheaper, but we are not always cheaper. When you start to grow, you become as expensive as countries such as Thailand, as Vietnam or as Malaysia. A lot of companies cannot make a sustainable business here in the last few years.
Several years ago, if companies hired Cambodians and they were quoted $2000, they’d say “What? A website for $2000?” But now I see companies that invest $30,000 for websites. I see cafes that invest more than $10,000 for mobile apps. So at least for SMEs it’s starting to become a business. As long as you make an application or website that contributes to a business, not a simple marketing webpage with two pages, it can cost $10,000. It is starting to become a market. I think it’s very encouraging compared to the past.
The government has started investing in IT projects, there are e-government services are outsourcing Cambodian talents too. There are three or four applications from government organisations that are done by local companies. It’s very interesting, and it’s very encouraging to see that.
What can we look forward to next year for CICTA?
Next year we are going to have better preparations, we are planning on bringing some big guys in. Have stronger competitors from the private sectors at least, or those from well-established companies. The awards next year will be very special. Cambodia will host the ASEAN ICT awards. A victory at home is very important, so we need better preparations next year. We will increase the prize to $10,000 USD to attract more companies. The prize this year was $5,000. We will also give companies a long preparation time. Next year, there will be real semifinals with a specialized judge for each category, because we have very specific sectors. And the finals will be more challenging.
Do you have any words of inspiration or advice for aspiring entrepreneurs interested in joining next year’s CICTA?
The competition will be very interesting to receive feedback, to get your business tested. Even if you don’t win, it will still be interesting. If you win, you’ll have a lot of exposure, a lot of media coverage, investors will be interested in you. It will boost you to go faster and further.