Industrial Revolution 4.0 and its possibilities for Cambodia


The adoption of digital technology has reached a point where we are ready for another radical change, the digital transformation of the industry or what we call Industry 4.0.

The adoption of digital technology has reached a point where we are ready for another radical change, the digital transformation of the industry or what we call Industry 4.0.

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Industry 4.0 is a name given to the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of Things, cloud computing and cognitive computing. Industry 4.0 is commonly referred to as the fourth industrial revolution and has four design principles. These principles support companies in identifying and implementing Industry 4.0 scenarios.

Interconnection deals with the ability of machines, devices, sensors, and people to connect and communicate with each other via the Internet of Things (IoT) or the Internet of People (IoP). Information transparency is the principle which provides operators with vast amounts of useful information needed to make appropriate decisions. Interconnectivity allows operators to collect immense amounts of data and information from all points in the manufacturing process, thus aiding functionality and identifying key areas that can benefit from innovation and improvement.

Technical assistance compacts the ability of assistance systems to support humans by aggregating and visualising information comprehensively for making informed decisions and solving urgent problems on a short notice and then the ability of cyber physical systems to physically support humans by conducting a range of tasks that are unpleasant, too exhausting, or unsafe for their human co-workers. Decentralised decisions is the ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomously as possible. Only in the case of exceptions, interferences, or conflicting goals, are tasks delegated to a higher level.

Is Cambodia ready for a digital revolution?

The government in Cambodia recently hosted a digital conference that celebrated the Kingdom’s growing tech startup sector while simultaneously discussing the mounting challenges pertaining to the country faces in embracing digitisation – before the digital revolution leaves Cambodia behind.

Located on Phnom Penh’s Diamond Island, the Digital Cambodia conference – the first of its kind to be held in the Kingdom – attracted 120 exhibitors and nearly 100 speakers, all of whom gathered to discuss the oncoming digital revolution and its impact on their respective industries. Over the course of the three-day event, which took place March 15 through March 17, thousands of attendees poured through the exhibition’s halls to attend the panels, talk with industry insiders, and fully immerse themselves in all things digital.

“Digital Cambodia is about showcasing the digital transformation here in Cambodia, where many outsiders might think there is not much happening,” explains Dr Seng Sopheap, the president of the National Institute of Posts, Telecoms and ICT (NIPTICT), which organised the event. “We may not be Singapore yet, but there have been a lot of digital initiatives, competitions and programs set forth in the past two years here in the Kingdom.”

Thanks to these programs and to the increasingly popular spirit of entrepreneurship in the Kingdom, dozens of newly-founded startups have gained a foothold in the Cambodian market.

Even so, the Kingdom has a long way to go before it can fully embrace the tech-spirit of its young entrepreneurs; though the government set forth a plan to foster a thriving digital economy by 2023, the Minister of Economy and Finance Aun Pornmoniroth announced days before the Digital Cambodia conference that it would take more than a decade for the economy to be truly technology-driven, news reports state.

Pornmoniroth explained that the government aimed to develop a long-term policy – the particulars of which he did not share – that would serve as an effective guide to developing the digital economy as a whole. He added that Cambodia will likely not be home to $1 billion startups in the next few years, but the goal is to encourage a robust digital environment that has potential to foster continued growth of the startup scene.

On this point, Sopheap said he was in complete agreement.

“We want to show that Cambodia can be a startup destination for businesses that want to access the Asian market – from China, Europe and the US, as the case may be,” he said, discussing his plans for the Kingdom’s digital future. “It’s easy to live here, and businesses can release their prototypes and fine-tune their apps and business models here in the Kingdom before launching to the rest of the region.”

Some of the most glaring issues standing in the way of Cambodia’s digital startup growth are a lack of coordination between Cambodia’s ministries, a non-existent governmental policy on startups, a wide skills gap among the country’s young population, and limited access to regional networks and funding for local businesses.

It is not just a matter of addressing all these issues to encourage economic growth: if Cambodia doesn’t take significant action to counteract the rise of the digital revolution, its passivity could spell its economic ruin. Cambodia, which depends heavily on its manufacturing industry, is particularly susceptible to the negative effects of “Industry 4.0” – a shift toward factory automation that could see up to 60 percent of unskilled jobs lost in the next five years, according to the International Labour Organisation. Cambodia needn’t wait five years to see the loss of jobs as a result of digitisation, Sopheap added, as manufacturers in the country’s booming garment and textiles industry have already begun installing machines that make unskilled labourers obsolete.

Benjamin is a business consultant based in China

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