The number of students attending universities in Cambodia has risen exponentially over the past decade, leading to a highly competitive, if not discouraging, job market for graduates.
Experts say that graduates here are often confronted with difficulties when trying to find a job and continue living with their parents after leaving university. And employers often complain that those with degrees still lack skills required in the workplace.
But that reality is beginning to change, with more students being encouraged to harness a more entrepreneurial mindset during their time at university and a range of new companies set up by former graduates now doing business.
“The idea is not to have things focused on just accounting and things like that,” said Stephen Paterson, a lecturer at the National University of Management in Phnom Penh. “It’s about nurturing a more open minded spirit.”
At NUM, student numbers are at a record high–rising to about 40,000 today from less than 1,000 in 1994. And according to Mr Paterson, students are passing through a period of transition in an atmosphere now centered around instant communication, Internet connectivity and social interaction on networking websites like Facebook and Twitter.
“Things are changing I think quite fast,” said Mr Paterson.
An example of the rise in graduates who have embraced the culture of entrepreneurship can be found at Toys & Me, a retail outlet selling toys for infants in numerous locations.
“It is the beginning of a new generation in Cambodia and we wanted to bring education to the children,” said Sok Piseth, 27, general manager of Toys & Me, who established his company in 2009 and has seen it grow fast with new boutiques opening in Battambang province last year as well as Sovanna Shopping Center in 2008.
Mr Piseth, who graduated in 2006 from the Royal University of Law and Economics, says he saw that parents who wanted to buy toys for their children had little choice in the current market. That was his entry point.
“The next generation [of students] studies a lot. They know how to plan the business quite well,” he said, acknowledging the open-mindedness of his generation of graduates.
Som Chamnan, executive manager of the Cambodian Federation of Employers & Business Associations, or CAMFEBA, said Cambodia was undergoing a transition period in which young Cambodians are starting to embrace the idea of entrepreneurship, though no data is yet available on the matter.
The reason, he says, is down to a widely perceived consensus that the job market is over saturated with graduates.
“They seem to understand that the job market is very tight for them. So they need to find ways to start their own business,” he said.
But universities still have a long way top go in order to integrate entrepreneurship training into their courses and financial institutions are notoriously reluctant when providing credit to students in need of some financing, he said.
Still, “in the past [students] were very much focusing on looking for a job in a company or a bank etc,” said Mr Chamnan. “This is changing.”
On Jan 23 in Phnom Penh, the McKinsey Mekong Business Plan Challenge took place, an event that debuted in 2006 and selects winners from three-member teams who are judged by a panel of international arbitrators on the quality of their business plan.
Fourteen teams of students from Cambodia, Vietnam, Thailand and Laos took part in the event, which was presided over by officials from the global management consultancy firm McKinsey & Company, US computer giant Dell, Jardine Schindler, the Hong Kong-based elevator firm, and Bank Julius Baer from Switzerland.
A team of graduate level students from Thailand won first prize for their business plan that focused on organic preservatives for fruit and vegetables.
Second prize went to a team of undergraduate students from the Foreign Trade University in Hanoi for an environmental education project called Greenie.
And in third position was a team of graduates from Cambodia and Burma for a consultancy firm focused on Open Source Technology.
“Surprisingly most of the ideas were social venture and not just pure profit,” said Mr Paterson, adding that previous years had inspired more commercially driven ideas such as coffee shops and restaurants.
Mr Paterson said the competition was designed to create a space where business ideas and individuals can map out new ideas inside their respective economic environments.
“The emphasis should be on the students. It’s not a national competition. Its an idea competition,” he said. “There are more opportunities out there than simply finding work in NGOs.”
Since its creation, the competition has seen a string of graduate businesses hit the market here. One of them was the Mozart Music Center, which launched in September.
Mali Ka, 28, founder of the Mozart Music Center in Phnom Penh’s Chamkar Mon district entered the McKinsey Business Plan Challenge last year and finished in fourth place with her idea.
With her husband as a professional conductor and her own background in law and finance–she is currently finishing a master degree in law at the Royal university of Law and Economics–provided the perfect melting pot. Today, after six months doing business, they have 39 students, of which 19 are from abroad.
“We had the idea to create a music center in Cambodia,” said Ms Ka. “Now we have one or two students joining our center every week.”
“Its about lifting up the level of our country,” said Rithivit Tep, chairman of Devenco, a private equity fund with investments in several start-up ventures here. “Being a good entrepreneur is about looking at how it’s done else where.”
And with about 200,000 students graduating every year from Cambodian universities, it is imperative to encourage students to become entrepreneurs, as there are simply not enough jobs in the market, he said.
“Entrepreneurship is so important as it’s a Cambodian affirmation of being independent and being sovereign and comparative with other countries,” he said.
“This is very important to diversify the economy,” he added. “You have to provide a source of domestic entrepreneurs.”
Lon Chanborey, a post graduate student at the University of Puthisastra, whose business plan for an open source technology consultancy firm won third place in the McKinsey Mekong Business Plan Challenge this year, said the competition helped him to think beyond his own training in information technology and develop skills in other fields like accounting and marketing.
“Before I was never involved with the business plan, I was just involved with the technical side,” he said. “If I implement this company, it will be the first IT company based on open source technology in Cambodia.”
Mr Chanborey added that universities were becoming more competitive in their search for the best students and, therefore, are being obliged to modernize their teaching methods and facilities.
Despite a sign that students are becoming more capable of diversifying their skill sets and exploiting different areas of the job market, experts say that there is still a huge gap in what the market demands and the skills with which students are equipped.
“The challenge is that every year there are graduates, secondary school graduates, university graduates leaving the school and entering the world of work,” said Sun Lei, education program specialist for Unesco. “A lot of them can’t find a job immediately.”
Ms Lei stressed that as Cambodia moved forward it would be imperative for the government to ensure that qualified graduates are equipped with relevant skills that fit more closely to the demand in Cambodian labor markets.
Officials from the Ministry of Education could not be reached for this article.
A report released by CAMFEBA in 2008 states that employers need a workforce that has the necessary practical and technical skills to take their businesses forward but that these skills are often in short supply.
Only 13 percent of employers believe that graduates have all or most of the skills they need for work, according to the report.
“There is still a way to go,” said Ms Lei. “To educate a generation it does not happen over night or even within ten years.”