Posted : 2013-11-17 13:42
Updated : 2013-11-17 13:42

'Entrepreneurs will lead development'

Staff members of ISAC Eco Farm present their business plan for health supplements in front of the judges and experts on the graduation day of the Green Eco-preneurship Accelerated Program at a hotel in Phnom Penh, Cambodia, Nov. 9. / Korea Times photo by Kim Da-ye

Korean SME institutions fund entrepreneurship training in Cambodia

By Kim Da-ye

PHNOM PENH, Cambodia — On a Friday afternoon, Ryn Dy, a 33-year-old Cambodian, sat down in a hotel with Lee Yong and Edward Purnell, professors from Handong Global University, to make a final check of the financial statement of the taxi company he would give in his presentation the next day in front of dozens of other aspiring entrepreneurs and experts.

Dy learned accounting nearly 10 years ago at college and came to use it only recently because he is preparing to start a taxi company next year. His estimated statement seems to have accounted for all his income and expenses — revenues from taxi fares, advertisements, costs of hydrogen gas, GPS navigation devices and even employees' uniforms. Lee and Purnell found that Dy put all expenses of setting up an office including the prices of furniture under the first year's operating costs. The professor asks him how long he expects to use the furniture and then explained the concept of depreciation.

Among the many subjects he studied to develop his business plan, finance excites Dy the most. "If you cannot control the finances, the company will collapse. With the numbers, you cannot lie. It's real," said Dy, who is among some 50 Cambodians in the entrepreneurship program managed and paid for by the Korean state-funded ASEM SMEs Eco-Innovation Center (ASEIC).

Ryn Dy, right, a Cambodian who plans to start a taxi company next year, sits with Lee Young, left, and Edward Purnell, professors at Handong Global University, to check his business plan with them at a hotel in Phnom Penh, Cambodia, Nov. 8. / Korea Times photo by Kim Da-ye

Dy worked for Asiana Airlines between 2006 and 2011. He decided to leave the job because he found working just to pay rent and for living wasn't meaningful. "I had to find something more useful and good for people," he said.

The Cambodian said that after leaving Asiana, he launched a tuk tuk — a motorized rickshaw — business with $5,000 he borrowed from an angel investor. It was difficult to find educated drivers, and consequently, Dy ended up selling all three tuk tuks.

Based on the lessons from the failed venture, Dy decided to launch a high-quality taxi company. He is going to lease 50 vehicles with printed advertisements on the sides for extra revenue in the first year . He plans to hire educated, preferably English-speaking drivers and use hydrogen gas, which is cheaper and cleaner than gasoline. He said that the economic integration by 2015 among ASEAN countries will boost travel in the region and the demand for taxis.

Dy's business plan was developed at the ASEIC's Green Eco-preneurship Accelerated Program (GEAP). The GEAP resembles an entrepreneurship course in an MBA program. Over 10 weeks, students turn their ideas into concrete business plans that consists of market research, SWOT (strengths, weaknesses, opportunities and threats) analysis and created an estimated financial statement.

The GEAP is a novel form of foreign aid executed by the Korean government. The funding comes from the Small and medium Business Corporation (SBC) and Small and Medium Business Administration (SMBA), the state-owned institutions that support small and medium enterprises (SMEs). The ASEIC is a nonprofit affiliate of the SBC that promotes eco-friendly innovations in small and medium businesses in Asia and Europe.

In 2011 and 2012 in Cambodia the ASEIC ran a program to foster a local renewable energy company. This year, it felt the need to present entrepreneurship as the main theme because any "eco-innovations" would need business-oriented people to take it off the ground. It partnered with the Institute for Entrepreneurship and Innovation of Handong Global University based in Pohang, North Gyeongsang Province.

Kim Gi-hong, professor at Handong who designed the course, said that developing countries need entrepreneurs who would take opportunities, hire people and contribute to economic growth like Samsung Group founder Lee Byung-chul and Hyundai founder Chung Ju-yung did. He said that Dy who gave up the safe job at Asiana in order to start his own business is potentially an entrepreneur Cambodia needs.

"I have a theory that there are two kinds of entrepreneurship — opportunistic and subsistence. Opportunistic entrepreneurs start their own company because an opportunity is too good to miss. Subsistence entrepreneurs, on the other hand, start businesses simply to make a living," Kim said.

"Bill Gates, Steve Jobs and Mark Zuckerberg all quit school to start their firms, even though graduating from the university would have guaranteed stable jobs with good salaries. They chose opportunities over safety at such an early age and hence have contributed to society. Many new businesses are opening up in developing countries, but they are mostly means of subsistence."

GEAP program

The ASEIC and Handong designed a 10-week program that was carried out in two tracks by two Cambodian entities. For the first track, Genesis Community of Transformation (GCT), a Cambodian non-profit organization, helped those serious about launching a start-up or those already running companies, polish their business models and plans. For the other track, Small World Cambodia, a for-profit start-up consulting firm, advised mostly university students to develop ideas into business plans. The Korean institutions and Cambodian partners chose participants through applications and interviews.

The first week was run by Handong, which has hosted an intense one-week entrepreneurship program across the entire world, including Ghana and Peru. The participants stayed at the same hotel and attended lectures from early morning to late night. The conference provided seminars about the entrepreneurship spirit, the development of business plans, marketing, finance, communications, business ethics, intellectual property and more.

After the Handong team left, the two Cambodian organizations took charge of the remaining nine weeks so the local institutions would be ready to continue helping the participants, as well as train more entrepreneurs with similar methods.

The GCT, for example, built a network of local experts and advisors to advance the participants' business plans. It also hired instructors to teach making presentations in English with Microsoft PowerPoint. Dy's team was supervised by the GCT, and he was encouraged to do market research by interviewing taxi drivers.

Navy Chhay, the Cambodian director of GCT, said that the organization will develop programs based on the GEAP that vary in duration and hope to offer them to various institutions, including a domestic university.

"It's like planting a seed in the mind and spirit of the people. We want to carry that forward. We don't want to finish here and have the spirit die down," said Chhay.

During the nine weeks, some participants showed an impressive improvement. ISAC Eco Farm, for example, consists of farmers living in Takeo, a province about four hours away from the capital by car. The members hardly spoke English, much less had the skills to create a presentation in Microsoft PowerPoint and develop a financial statement. The Institute of Sustainable Agriculture and Community Development (ISAC) school was founded by Korean missionary Kim Gi-dae. By the end of the program, Eco Farm was given an award for being the most improved team.

Eco Farm has already produced and sold capsules of moringa powder known for its high nutritional value. One staff member says that having attended the GEAP, she now has many ideas to diversify the uses of moringa.

"Learning to develop a business plan was very useful. The most valuable outcome is that we now have new ideas. With moringa, we can make more than capsules such as shampoo," said Pet Sarath, a 24-year-old staff member of Eco Farm.

"The capsules are produced for foreigners, so are somewhat expensive for Cambodians. I want to develop new affordable products, which Cambodians can use to become healthy."

The other participants included Khmer Green Organic Farm, a group of three-students who plan to procure organic vegetables direct from farmers to distribute to restaurants, grocery stores and supermarkets, and the Snacker, an existing organic ice cream chain that hires and empowers women.

On Nov. 9, the ASEIC hosted a graduation ceremony at a four-star hotel in Phnom Penh. The aspiring entrepreneurs mostly came in black tie attire. They had to make presentations on their business plans in just seven minutes and then answer judge's questions for three minutes. These challenges were followed by 20-second elevator speeches where participants met a "client" in an elevator and effectively gave their sales' pitches.

Third and last year at Cambodia

The ASEIC's first Cambodian project, which started in 2011, offers consulting programs for small- and medium-sized enterprises across Asia and Europe, but Cambodia has been so far the only country to receive intense hands-on support.

In the first year, the ASEIC, in partnership with the Global Green Growth Institute (GGGI), managed and financed the transfer of solar cooker technology to a group of Cambodians at the ISAC in Takeo. It hired Energe Farm, a small-size Korean social enterprise specializing in renewable energy, to train the local staff of the ISAC to produce solar cooker, a device that concentrates the heat powerfully enough to boil water and bake bread, replacing the wood staves that many in the Takeo province rely on.

In the second year, the program was expanded, and the staff and students of ISAC learned to assemble small solar power generating systems, some of which were purchased and installed in local households. Furthermore, the ISAC launched its own renewable energy company called Eco Solar, which plans to manufacture solar-technology products and maintain them.

This year, the ASEIC decided to support more Cambodian companies and determined the focus as entrepreneurship. The theme went well with the pervious two-year project because Eco Solar needed a solid business model to stand on its own feet without further support from the ASEIC. Eco Solar was one of the participants trained by Handong and GCT.

"The last three years in Cambodia, the ASEIC not only expanded the transfer of appropriate technology, but also ran the program to foster entrepreneurship in Cambodians and to help build self-supporting business models," said Park Jong-gon, the director of the green business and technology support department at the SBC.

"In the future, the ASEIC wants to expand the pool of the recipient countries, especially developing ones among the member states of the ASEM. We want to transfer technology that will improve their people's lives and to run capacity building programs to foster global entrepreneurship with the aim of guiding the developing countries' green growth."

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