Analysis of the Cambodia's garment industry and catch‐up strategy

Abstract

Summary This article aims to assess the capabilities of Cambodia's garment industry in the post‐Safeguard Policy era, and the country's ability to upgrade its garment assembling status to Original Equipment Manufacture (OEM) status. This article analyzes and proposes a strategic positioning of Cambodia's garment industry in the next decade by utilizing the analytical framework developed by the US International Trade Commission (USITC) in 2004. Findings from the USITC framework‐based assessment have been illustrated in a cobweb‐shaped diagram to show an analogy of Cambodia's garment industry in comparison with that of China and Vietnam. For the improvement of the current working environment and the forthcoming upgrading process, a trajectory of the Cambodia's garment industry has been projected in three vital stages: (1) assembling, (2) OEM, and (3) original brand manufacturing. In response to the first objective, the Cambodia's garment industry is predicted to face a high risk of industrial downturn in the post‐ 2008 era due to the internal weaknesses in the supply side. For the second objective, the shift from Cambodia's current garment assembler status to OEM status will take a long time and require training of local managers and skilled workers.