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http://news.bbc.co.uk/1/hi/business/6180198.stm

BBC NEWS
Tech firms stake out Phnom Penh
By Guy De Launey
Phnom Penh, Cambodia

From the outside, the Phnom Penh home of Digital Divide Data (DDD) does not look like the launch pad for an IT revolution.

In fact, it is typical of the large, gaudy, "wedding cake"-style houses in the neighbourhood around the Tuol Sleng genocide museum.

Yet the unpromising exterior conceals what is, perhaps, Cambodia's most radical social enterprise.

DDD is a non-profit organisation that has, for the first time in its five-year history, turned a profit.

Quality work

Unlike many other NGO business projects, DDD focuses on technology rather than traditional handicrafts.

And success is measured - at least in part - by the number of employees who leave to start rival companies.

In a large, air-conditioned room on the second tier of the wedding cake, dozens of workers beaver away at computer keyboards.

My future plan depends on having someone to replace me
Kann Kunthy
Digital Divide Data

DDD's main business is data-input, and the data in question ranges from client information for a local mobile phone network to the archives of an international news agency.

Other customers on the international client list include academic institutions such as Yale University.

They want to convert historical data, currently only available on paper, to a digital format that is easier to analyse.

This is the kind of outsourcing work with which technology companies in India started, before moving into more complex and lucrative enterprises.

DDD's founder, Jeremy Hockenstein, thinks something similar could also happen in Cambodia.

"We have started the IT sector here," he says.

"Cambodia is still associated with devastation in much of the world, and it doesn't have the reputation of India or China.

"But with projects like ours, we can prove that this work can get done and be competitive."

Mr Hockenstein is based in the United States, where he drums up many of the company's clients.

He says that while the novelty of a Cambodian outsourcing operation often sparks the initial interest, it is the quality of the work that clinches the sale.

Extensive training

Back in Phnom Penh, Kann Kunthy oversees affairs in Cambodia.

It took him just four years to rise from working a keyboard in the data-inputting room to become DDD's general manager last year at the age of 26.

His progress typifies the company philosophy of employees "graduating" to better things.

"There are two ways to graduate: internally and outside," he explains.

"My future plan depends on having someone to replace me. More than a hundred people so far have graduated to better jobs earning three times more money."

On-the-job training is supplemented by external academic and vocational courses paid for by the company.

Shifts are limited to six hours a day, so that employees can spend the rest of their time studying.

It is a policy that has given many of them the confidence and qualifications to start their own businesses, or find better jobs elsewhere.

Combined with a focus on hiring people with disabilities or from disadvantaged backgrounds, DDD has established a reputation as a socially-responsible employer.

Even more impressive for its many admirers, however, is the way it has built a sustainable business.

"It is a big success story and very inspiring," says Adam Sack of the International Finance Corporation's Phnom Penh office.

"Turning a profit is the enterprise part of social enterprise, and profit is a good indicator of a properly-run company.

"They are at the start, but they have shown they have a model they can replicate."

Growing independence

In fact, DDD already has a profitable branch office in the provincial town of Battambang and has also started an operation in Laos.

Cambodia is still associated with devastation in much of the world, and it doesn't have the reputation of India or China
Jeremy Hockenstein, founder, Digital Divide Data

According to Jeremy Hockenstein, more than two dozen countries have approached him about the possibility of developing similar social enterprises.

"The idea of socially-responsible outsourcing really resonates with people," he says.

"After the first wave of controversy about outsourcing, more people now are focusing on how this work is being done in other countries.

"They are glad to know that in addition to getting output from us, the funds they are paying for this are helping to build better lives."

Asking Cambodia to replicate India's achievements in the technology sector might be a little far-fetched, but its garment industry is thriving, thanks to an ethical approach to labour.

It employs more than a quarter of a million people now, compared with virtually none a decade ago.

DDD may yet prove to be the seed for something similar to happen in IT - and a signpost to show how Cambodia could end its dependency on aid.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/6180198.stm

Published: 2006/11/26 17:19:12 GMT

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