Entrepreneurship is multi-faceted, witha range of factors influencing the success ofgrowth-oriented enterprises. A well-functioningentrepreneurship ecosystem includes six pillars: skilledhuman capital,well-functioning markets, an encouragingpolicy environment, availability of financing,anentrepreneurship-friendly culture, and supportiveentrepreneurship organizations and networks. This policynote responds to a request from the government to assess thecurrent state of Cambodia’s entrepreneurship ecosystem andto identify deficiencies that are holding back the successof domestic enterprises. The note assesses Cambodia’sperformance across the six pillars of the entrepreneurshipecosystem. Given the important role that innovation plays inentrepreneurial outcomes, this note also includes a briefanalysis of Cambodia’s national innovation system. The noteprovides recommendations for how the Cambodian governmentcan use policy to create amore robust system of support forthese domestic enterprises and the entrepreneurs whoestablishand manage them. Given Cambodia’s struggle with themissing middle of enterprises, this note focusesparticularly on policies to encourage thetypes of dynamicsmall- and medium-enterprises (SMEs) that grow quickly andcan have a potentially transformational effect on theeconomy. To provide some useful lessons on improving supportfor entrepreneurship, the note also includes internationalexamples from countries, such as Singapore and Malaysia,that started with a similar profile of FDI-led developmentand, over time, have successfully putin place the conditionsnecessary to nurture and grow a dynamic domestic private sector.
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