Adapting To Industry 4.0 A Top priority: Ministry

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Cambodia is prioritising the adoption of new technologies in manufacturing and encouraging investment in sectors that are undergoing rapid technological innovation, according to a senior government official.

One of the biggest challenges for Cambodia in the fourth industrial revolution will be to maintain high levels of employment while moving away from labour-intensive production, a UN representative said yesterday. KT/Ven Rathavong

Phan Phalla, Undersecretary of State at the Ministry of Economy and Finance, said yesterday that Cambodian policymakers are focusing on ensuring the nation is in a good position to reap the benefits of recent technological advancements.

He said the government aims to ensure the country can adapt and transform in line with changes in technological trends while minimizing the social and economic costs of transitioning into a more technologically advanced economy.

Mr Phalla was speaking at a high-level seminar on the fourth industrial revolution held yesterday in Phnom Penh and attended by more than 100 professionals from government, diplomatic missions, academic institutions, development agencies and the private sector, as well as agencies of the United Nations.

The Cambodian official said the world is now entering a new phase of economic transformation: a fourth industry revolution, also referred to as ‘Industry 4.0’. He said this revolution is composed of a set of powerful new technologies bound to disrupt the old economic order and the workplace.

These technologies include artificial intelligence, robotics, virtual reality, blockchain technology and 3D printing, he said.

“These innovations will accelerate the creation of new technologies and transform our ways of living and doing business, forcing changes in the speed and modalities of regulation and policy formulation. In this sense, even developing countries like Cambodia will also face both a positive and a negative impact on economic and social development,” he said.

“The fourth industrial revolution may bring common opportunities, including increasing wealth, productivity and acting as a powerful force for economic inclusion,” he said.

The new technologies may provide less developed economies an opportunity to leapfrog economically, bypassing traditional phases of development, Mr Phalla said. However, Industry 4.0 will not come without drawbacks, he added.

“New technologies present some serious challenges for all countries, such as the prospect of job losses, increase unemployment among lower skilled workers, and cyber-attacks that could prove just as damaging and costly as a physical attack on the nation,” Mr Phalla said.

“I would like to call for collaborate approaches across all stakeholders to create better solutions for Cambodia in order to achieve our socio-economic goals,” Mr Phalla said.

“Preparing for the digital economy and responding to the fourth industrial revolution is one of the major priorities of the Royal Government in the next mandate,” he added.

Pauline Tamesis, UN resident coordinator in Cambodia, said the Kingdom will face two main challenges in the near future. Gaining access and adopting the new technologies will be a challenge in itself, as well as a necessary condition to ensure Cambodia can leapfrog antiquated technologies and production methods.

Secondly, Cambodian leaders need to devise ways of ensuring high levels of employment while moving the country away from labour-intensive production.

“The UN is committed to helping the Royal Government of Cambodia to tackle these challenges – so that Cambodian firms can become early adopters, and workers can acquire new skills and capacities – hence opening up a host of new opportunities.” Ms Tamesis said.

She added that for countries like Cambodia, Industry 4.0 will challenge ideas like the capital to labour ratio, and their mix in production. Therefore, it has implications for the location of production and the distribution of rewards between countries and actors in value chains.

Charles Esterhoy III, CEO at Worldbridge Homes and former COO of Kerry Worldbridge Special Economic Zone, said Worldbridge has been focusing on successfully adapting to the fourth industrial revolution for the past year and a half.

In December, Worldbridge will start construction of Cambodia’s first industrial park for small and medium-sized enterprises, known as ‘SME Cluster’. The park will comply with German architectural standards for Industry 4.0, he said.

“With the SME Cluster, all firms will be participating in a new way of doing business, a new way of thinking and interacting with customers and suppliers with technologies that can solve different problems in the production chain,” he said.

“The German architectural standards for Industry 4.0 are not just about automation and intelligence. It is a way of thinking to improve production methods,” Mr Esterhoy added.

According to Mr Phalla, the government’s industrial development strategy for 2015-2025 seeks to encourage private sector participation to support technological innovation in Cambodia.

It aims to reform the education system to enhance the role of science, technology, engineering and math (STEM) education in the national curriculum, as well as promoting entrepreneurship and soft skills training, Mr Phalla added.

This article was originally published in the Khmer Times.

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