This picture of four workers in a future garment factory was generated by AI. ChatGPT
In a rapidly evolving world where automation is transforming industries, Cambodia stands at a critical juncture.
As robots and artificial intelligence (AI) increasingly become part of the workforce in the East Asia and Pacific (EAP) region, the question remains: will they help boost Cambodia’s economy by creating jobs, or will they lead to widespread job losses?
The latest World Bank report, Future Jobs: Robots, Artificial Intelligence, and Digital Platforms in East Asia and Pacific in 2025, provides a nuanced look at the future of labour in this dynamic region, including insights on Cambodia’s potential challenges and opportunities.
Across the EAP region, including Cambodia, automation is reshaping the labour market. The adoption of robots and AI in manufacturing has been a double-edged sword.
On one hand, productivity has surged and production scales have expanded, resulting in job creation in certain sectors.
On the other hand, the automation of routine manual tasks has displaced low-skilled workers, especially those in manufacturing and agricultural industries.
Cambodia’s manufacturing sector, which employs a significant portion of the workforce, has seen slow but steady shifts towards automation.
The World Bank report notes that robot adoption has remained limited in the country, largely due to low wages that reduce the economic incentives for investing in costly automation.
“While they can substitute for labour in an ever-widening range of activities, new technologies are economically feasible today only in the relatively high-wage sectors in more developed EAP countries like Thailand and Malaysia,” according to Manuela V. Ferro, vice-president of the East Asia and Pacific region at the World Bank.
Her comments in the report underscore the paradox that Cambodia faces: while automation may displace some jobs, it also offers opportunities for productivity growth, potentially driving more jobs in the skilled manufacturing, electronics and automotive sectors, where robots are already being adopted in neighbouring countries like Vietnam and Thailand.
Challenges and Opportunities for Cambodia
The World Bank report points to the fact that low-skilled workers in Cambodia, particularly those in routine physical tasks, are at high risk of displacement due to automation.
As robots increasingly take over repetitive tasks in manufacturing, the demand for low-wage manual labour may diminish.
The report noted that in Indonesia, Malaysia, the Philippines, Thailand and Vietnam between 2018 and 2022, robots displaced an estimated 1.4 million (3.3 per cent) of low-skilled formal workers engaged in routine manual tasks.
However, the productivity gains from automation and the resulting higher scale of production helped create an estimated 2 million jobs — 4.3 per cent of formal skilled employment — for skilled workers engaged in non-routine manual and cognitive tasks.
Yet, this isn’t all bad news for Cambodia. The report suggests that while automation may lead to informal sector growth, especially in the short term, it also provides an opportunity to focus on upskilling the workforce.
With technology prices expected to continue declining, Cambodia could leverage its existing comparative advantage in low-cost manufacturing to attract foreign investments in industries that have already begun to adopt robots — such as the rubber and plastics, electronics and automotive sectors.
As the report highlights, economic viability — the relationship between the cost of technology and labour costs — plays a crucial role in robot adoption.
Countries like Malaysia and Thailand are already moving ahead with automation, but Cambodia’s lower labour costs mean that the shift will likely be slower and more gradual, which could provide valuable time for the workforce to adapt.
The ratio of employment to the size of the working-age population is higher in EAP countries than in other developing economies.
The differences within the region are significant, however. From lowest to highest, the ratio is between 60 and 67 per cent in Mongolia, the Philippines, Malaysia and Indonesia and between 72 and 83 per cent in China, Thailand, Vietnam and Cambodia.
These differences partly reflect the lower labour force participation of women in the former group of countries.
The share of the working-age population in the total population has declined the most in aging Mongolia, China, Thailand and Vietnam, but has increased especially in the more youthful Philippines, Malaysia, Indonesia and Cambodia.
The report explores how technological advances are transforming labour markets across the region.
While robot adoption has supported job growth in manufacturing by boosting productivity and scaling production, it has also displaced low-skilled formal workers in routine tasks, particularly between 2018 and 2022 in five ASEAN countries.
In contrast, AI’s labour market effects remain nascent but are expected to create both displacement and augmentation impacts. Digital platforms are creating new job opportunities, especially for youth and women, though the benefits are uneven.
The report highlights that economic viability — rather than just technical feasibility — largely determines the pace and scope of technology adoption, which varies by country income level, labour cost and sector.
