PHNOM PENH: Techo Startup Center released an inside Look at the Cambodia Startup Ecosystem health check. Written by: Sokha Phanith, Then Yanuth, Bunthan Sophavina, Taing Nguonly How can Cambodia survive and prosper in the midst of a nascent entrepreneurial landscape? Is Cambodia’s support system for startups in good shape?
September 2021, following a self-assessment tool for ecosystem builders developed by Swisscontact and Deep Ecosystem, the Startup Development Team at Techo Startup Center (TSC) conducted the first pilot study on the nascent entrepreneurial startup scene in Phnom Penh. It appears that Cambodia is capable of attracting a tech-savvy community of entrepreneurs.
The primary objective of this pilot study is to assess the available resources in the Startup Cambodia database. This will enable us to analyze the key metrics based on the Ecosystem Health Check assessment tool. In light of the limitations of data, it is imperative to note that the findings from previous studies and the current study have been gathered from different pools of databases.
COMMUNITY OF ENTREPRENEURS
Covering the metrics of Diversity and Inclusivity and Knowledge and Talent, there are two chosen proxies including 1) shares of female startups founder, and 2) shares of engineering/tech skill founders.
The 2021 report shows that 35% of startup founders were women based on 22 tech startups.
The report also showed it found beneficial data on female founders listed on the SCDP; there are a total of 54 tech startups. Based on the SCDP data, the share of female founders accounted for 32% in 2022. It is important to note that women are chronically underrepresented in the tech sector. Therefore, the startup female founders remain in a headwind of inequities and a long way for equal representation.
ENTREPRENEURSHIP SUPPORT NETWORK
Among Startup Support, mentors with startup experience are commended for their insightful advice that sheds light on the journey of starting a business. In 2021 report, the SNA database illustrated those mentors with startup experienced accounted for 63%. However, the SNA dataset has not updated the information since then. We therefore decided to use the information available on SCDP database.
Of 37 mentors, 21 have clear previous startup experience (57%).
Suggested in the toolkit developed by Swisscontact and Deep Ecosystem, Herfindahl-Hirschman Index (HHI) will be used as a measurement to evaluate the market concentration and determine market competitiveness. Based on HHI formula, the result is 85.7%, compared to last year’s 83.75%; Phnom Penh showed a very diverse result assuming that there is also a diverse support network in the region.
COMMUNITY & NETWORK DENSITY
Two metrics were utilized to determine including 1) Network Density and 2) Innovation Culture.
Connectivity between the founder and the mentor can be firmly established by measuring Network Density. The capacity for spontaneity and creativity in an ecosystem is related to the density of its network.
The report found a quality data from Global Innovation Index 2022, showcasing Thailand is placed 43rd among 132 economies, while Cambodia is placed 97th among 132 economies. The benchmark has been set at 36 sub-score for Cambodia to keep up with our neighboring country, Thailand.
GOVERNANCE
To measure a country’s ease of doing business, it involves determining whether entrepreneurship is supported by regulations that reduce corruption, ease business processes, and increase partnership.
The governance aspects were analyzed to see whether government policies are supportive for business growth. There are two indicators to determine the contribution from the government such as 1) ease of doing business and 2) offices of international connectivity.
In the 2021 report, we first looked in data from World Bank.
However, the World Bank dataset presents information only for 2019. We therefore decided to use the updated source of information as our proxy.
ANALYSIS AND RECOMMENDATIONS
The result in 2022 remains statistically similar although the assessment was conducted through different data pools of sources. The findings of this study have speculated that the health of the Startup Ecosystem in Cambodia shows positive momentum in the Community dimension, with the shares of four proxies are significantly in steady performance.
GENDER DIVERSITY
2 principles are reported in the report.
Encourage to pursue tech degrees and entrepreneurship, while ecosystem builders must make sure that programs are designed to attract, include, and support female founders.
Educate and empower women entrepreneurs by providing more scholarship opportunities and support programs to fill in skills gaps and improve business performance
INNOVATIVE COMMUNITY
Continually cultivate an innovation-driven environment where people feel inspired and supported.
Organize more meetups allowing like-minded people to connect and exchange ideas, so that it allows them to explore further opportunity of collaboration and support.
Encourage experienced entrepreneurs to share their knowledge and expertise.
Provide opportunities for entrepreneurs to challenge and develop their idea through support programs ranging from hackathons to acceleration programs.
Government Policy and Support
By generating talent and tech developments in an economy,
Entrepreneur Support Organizations (ESOs) and Educational Institutions should collaborate to further encourage a culture of innovation and research.
Engage relevant stakeholders and government institutions to continue enhancing and promoting inclusiveness and sustainable development of the entrepreneur ecosystem.
Develop a tech startup policy and regulation.
Cambodia's startup scene was examined through an ecosystem health check tool. Tool improvements can always be made in the future, as it is understood that everything can always be improved. Our goal is to engage stakeholders in a more direct manner so that relevant partners can provide up-to-date data and information on the SCDP in real-time, thereby allowing all stakeholders to monitor the growth of startups in the ecosystem.
The information contained in the report represents the views and opinions of the author and does not necessarily represent the views or opinions of Techo Startup Center. The report has been made available for informational and insightful access to startup ecosystem resources on the Startup Cambodia Digital Platform.
For full report click on https://www.techostartup.center/media/uploads/resource/files/An_Inside_Look_at_the_Cambodia_Startup_Ecosystem_Health_2.pdf
