The services sector in Cambodia accounted for 38.9% of Cambodia’s GDP, industry for 34.2%, and agriculture for 20.7% in 2019. Although the contribution of the services sector to the country’s GDP has remained around 40% since 2000, it has seen promising innovation in banking and finance, insurance, and professional services like architecture, real estate, education, and healthcare among others as new products are paired with digital technology offering become increasingly commonplace.
This augurs well for Cambodia because, given its youthful population profile where more than 75% are under the age of 35, more prevalent use of digital technology can help mitigate or address the challenges of low productivity and skills; they can be a catalyst to transform other areas of need and help shorten the time it would take to bridge the gaps in knowledge and skills.
Rather than just focus only on the lack of skilled labour and talent in Cambodia in absolute terms, foreign businesses and investors may find it instructive to note that the contribution from the Services industry to Cambodia’s annual GDP has been growing at an average rate of 8% annually to 39% in 2019. This is a strong testament to how quickly its economy is becoming more sophisticated amidst a youthful population, its high internet and social media penetration (approx. 71% of the population), a growing middle class and rising demand for modern services.
Since 2014, Cambodian businesses have started to diversify beyond tourism and garment/footwear/travel goods exports into niche services such as basic computer animation, software coding and development for local and foreign accounts, insurance and actuarial, information communication technology-related fields, e-commerce and even telemedicine, among others.
A recent OECD report noted that Cambodia and Singapore are both very open to foreign investment in the Services sector viz-a-viz other ASEAN and OECD member countries. In fact, it highlighted that between 2012 and 2016, the Services sector of Cambodia attracted more than 50% of its total FDI inflows, above that of Myanmar at 43% and even Malaysia (38%).
Growth of Service Sector and Subsector 2016-2021
Feel free to enquire with the Aquarii team should you need further advice.
If you are looking for a more nuanced insight or advice in terms of other indicators/observations not commonly found in publications for a better understanding of how a business or investor can navigate the local environment or seek out collaboration opportunities and trustworthy partners, get in touch with our team at Aquarii. Ask to speak to our CEO if you wish to know why he has decided to make Cambodia his 2nd home, perhaps the strongest testament of his conviction in the potential and opportunities in the Kingdom.
