Cambodia’s graduation to middle-income status: Preparation and ownership
Innovation no longer a job for the CEO alone
#Opinion
Malaysia has long talked about becoming an innovation-driven nation. Yet in many organisations, innovation still sits within a strategy unit, research department, or the minds of senior executives.
We continue to assume that breakthroughs emerge from boardrooms rather than from employees closest to the daily realities of customers and operations.
But what if the next transformative idea comes from a customer service officer struggling with inefficient systems? Or from a junior employee who notices what customers are too frustrated to articulate?
The future of innovation may not belong to the loudest voices at the top. It may belong to organisations that learn how to listen better. This is why design thinking deserves far greater attention in Malaysia’s workplaces.
Design thinking is often misunderstood as a trendy workshop activity involving sticky notes and brainstorming sessions. In reality, it is a powerful human-centred approach to problem-solving that encourages organisations to deeply understand people before creating solutions.
It begins with empathy, not assumptions. It values experimentation over perfection. Most importantly, it democratises innovation. The urgency for this shift is becoming increasingly clear.
According to Gallup’s State of the Global Workplace report, only 23% of employees worldwide are actively engaged at work. Disengaged employees are far less likely to contribute ideas, challenge inefficiencies or participate meaningfully in innovation efforts.
Meanwhile, a 2023 IBM Institute for Business Value report identified employee resistance to change as one of the biggest barriers to digital transformation. Innovation is no longer just about technology. It is increasingly about culture.
For decades, many organisations operated through rigid hierarchies where employees were expected to execute instructions rather than shape ideas. Today, that model is becoming outdated.
Markets move too quickly.
Customer expectations evolve too rapidly. Leaders alone cannot possibly identify every operational inefficiency, customer frustration, or emerging opportunity.
Employees can.
Frontline employees often understand customer pain points better than senior management because they encounter them daily. Yet many organisations fail to tap into this collective intelligence because employees fear speaking up.
Mistakes are punished, hierarchy dominates discussion and innovation becomes associated with risk rather than learning. A 2024 McKinsey report found that organisations with high levels of psychological safety were significantly more likely to outperform peers in innovation outcomes.
Creativity cannot thrive where people are afraid to fail. This is why design thinking matters beyond innovation itself. It creates environments where employees feel safe asking questions, challenging assumptions, and testing ideas without fear of immediate judgment.
Organisations move away from a culture of control toward a culture of curiosity. This shift is particularly important for Malaysia as we navigate economic uncertainty, digital transformation, and rising global competition. Improving productivity today requires more than efficiency measures alone.
It requires organisations to rethink how ideas are generated and how employees contribute to value creation. However, innovation is not just about generating more ideas; it is also about identifying which problems are worth solving.
Many companies focus only on existing customers and familiar markets. Yet some of the most disruptive innovations emerge from overlooked groups whose frustrations are ignored.
Successful organisations pay attention to weak signals, hidden frustrations and underserved needs long before competitors do.
Malaysia needs more organisations willing to think this way. At the same time, businesses must learn to balance stability with experimentation. They still need operational discipline and reliable delivery, but they also need room for bold thinking. Research by Deloitte found that companies with strong innovation cultures are twice as likely to achieve above-average revenue growth compared to competitors.
This balance is becoming even more critical as artificial intelligence and automation rapidly reshape industries. The World Economic Forum estimates that nearly 44% of workers’ skills will be disrupted within the next five years.
Employees are no longer simply adapting to change. Increasingly, they must become co-creators of change. But empowering employees requires more than motivational slogans.
Leaders must redesign systems to support employee-driven innovation. This includes creating time for experimentation, encouraging cross-functional collaboration, rewarding initiative and accepting that not every idea will succeed.
Failure must stop being viewed as incompetence and start being viewed as learning. Equally important is leadership behaviour. Employees quickly notice whether leaders genuinely welcome new ideas or merely claim to.
A single dismissive response can silence future creativity. Conversely, leaders who openly invite participation create trust. Trust is the real foundation of innovation.
Malaysia has immense human talent across industries, universities, SMEs, startups, and public institutions. The challenge is not whether Malaysians are creative enough. The challenge is whether our organisations are designed to unlock that creativity.
Innovation should no longer belong to a select few at the top. The organisations that thrive in the future will be those that recognise innovation as a collective capability. The next breakthrough idea may already exist within the organisation.
The real question is whether anyone is listening.
The writer is Associate Professor at the Department of Management, Sunway Business School, Sunway University. First published in New Straits Times
-Khmer Times-
The future of innovation may not belong to the loudest voices at the top; it may belong to organisations that learn how to listen better. NSTP/AI
Cambodia is approaching a defining moment in its development journey: the transition from Least Developed Country (LDC) to a Middle-Income Country (MIC). This milestone—often described as “graduation”—is not merely a technical reclassification. It represents a shift in how the country engages with the global economy, finances its development and assumes responsibility for its future. As with any graduation, success will depend less on the formal moment itself and more on the years of preparation leading up to it. For Cambodia, the need to accelerate that preparation is clear.
The metaphor of a student finishing school offers a useful lens. For decades, Cambodia has benefited from support measures available to LDCs—preferential trade access, concessional financing, development assistance, and technical support. These have functioned much like supportive teachers or parents: guiding, protecting and helping compensate for structural weaknesses. But just as a student cannot rely indefinitely on such support, a graduating economy cannot depend forever on external assistance.
Graduation changes the rules. Once Cambodia transitions, it will operate in a more competitive global environment. Trade preferences may diminish, financing could become more expensive and expectations for governance, productivity and innovation will rise. Like life after school, this “real world” comes with fewer safety nets and greater pressures. Opportunities will exist, but so will risks that demand resilience, adaptability and confidence.
Encouragingly, Cambodia’s leadership recognises this shift. Reforms have been initiated, institutions strengthened and efforts made to diversify the economy. Yet the key question is whether this preparation is deep, broad and fast enough. Readiness will ultimately be tested not in theory but in practice.
At the heart of this transition lies a simple principle: sustainable and dynamic development cannot be achieved without domestic initiative. External partners can support, advice and accompany, but the responsibility for shaping Cambodia’s future rests primarily with its government, institutions and people. Just as no one can take an exam on behalf of a student, no external partner can deliver long-term prosperity on behalf of a nation.
This does not mean Cambodia will stand alone. Development partners—bilateral donors, international organisations and private investors—remain engaged. However, their role is evolving. They increasingly function as advisers and collaborators: sharing expertise, supporting reforms and helping navigate complex decisions. The partnership becomes more balanced, but also more demanding.
Cambodia now faces important choices about its economic model for the next phase. There is no single path to success. Some countries have pursued centralised, state-led approaches, while others have relied on market-driven models emphasising competition, transparency and clear regulatory frameworks. Cambodia will need to define its own trajectory, based on its institutions, history and development ambitions.
Despite these choices, several fundamentals remain essential. A predictable and transparent business environment is critical to attracting investment and fostering trust. Investment in human capital—education, skills, and health—must accelerate to enable the workforce to compete in higher-value sectors. Infrastructure development should continue, with emphasis on efficiency and sustainability. Governance reforms, including strengthening the rule of law and tackling corruption, will be central to building both domestic confidence and international credibility.
Economic diversification is equally important. Cambodia’s growth has been strong but concentrated in garments, construction, and tourism. Graduation will require a broader base, including higher-value manufacturing, agro-processing, digital services and innovation-driven activities. Diversification not only supports long-term growth, but also reduces vulnerability to external shocks and changing global demand.
At the same time, strengthening domestic private sector capacity is crucial. A dynamic economy depends not only on government policy, but on entrepreneurs, small and medium enterprises and local innovation. Expanding access to finance, ensuring fair competition, and supporting skills development will help create a more inclusive and resilient economic structure.
The coming years will test Cambodia’s readiness. Like a student entering the workforce, the country will need to apply its knowledge, adapt quickly, and take responsibility for its decisions.
Mistakes are inevitable in any transition, but the key will be the ability to respond and adjust while maintaining forward momentum.
There is reason for optimism. Cambodia has shown resilience, adaptability and ambition over recent decades. Its rapid growth and significant reduction in poverty are notable achievements.
However, past success does not guarantee future outcomes. Graduation is not the conclusion of a journey, but the beginning of a more demanding phase.
The message, therefore, is clear: the time to act is now. Preparation cannot be delayed, and responsibility cannot be outsourced. Cambodia’s partners will remain supportive, but initiative must come from within. The graduating student must step forward—confident, capable, and ready to stand on its own.
If Cambodia embraces this moment with determination, ownership and strategic foresight, graduation will become not a risk but an opportunity—a gateway to a stronger, more self-reliant, and more dynamic future.
H.E. Mrs. Markéta Kolc Hájková, the Czech Ambassador
-Khmer Times-
