Thailand 4.0 – A step towards Digital Future

Across the globe and in Thailand, the nature of work is being transformed by an interconnected and complex set of factors like the unparalleled speed of innovation, technological advancement, climate change, demographic shifts, increasingly disintegrated production systems and rising inequality. These initiatives foster to a greater understanding of the changes and help the nations in developing effective policy responses that proactively shape the future.

The government of Thailand is striving hard to endorse “Thailand 4.0” as its new ploy and economic model for towing the country out of the middle-income trap and offer an impetus to the country to move into high-income range group.

Why Thailand 4.0?

In the initial model, “Thailand 1.0,” importance was given to the agricultural sector.

The following model, “Thailand 2.0,” focus was on the light industries that helped promote the country’s economy from the low-income to middle-income status.

In the late model, “Thailand 3.0,” the government is stressing on heavy industries for continuous economic growth. In this phase, the country has stuck in the middle-income trap and is facing imbalanced development and disparities.


Moving towards a value-based economy

The Thailand 4.0 initiative emphases on a value-based economy, as the nation requires dealing effectively with disparities and inequity between the society and environment. Thailand 4.0 comprises of three elements that mark a noteworthy change in the nation’s production and economy.

  • Moving into the high-income nation group
    The first component purposes to improve the country’s standing in becoming a high-income nation by being a knowledge-based economy, emphasizing on science and technology, research and development, innovation and creative thinking.
  • Moving towards an inclusive society
    In the second component, Thailand would attempt toward an inclusive society with unbiased access to the development and prosperity.
  • Focusing on a sustainable development and growth
    The third component emphases on sustainable development and growth for achieving sustainable development and economic growth and without jeopardizing the environment.

What is Thailand 4.0?

The modest answer is Thailand 4.0 initiative is an economic model which is based on innovation, creativity, high-quality services and new technology, employed for boosting the quality of life. This initiative is, however, a stepping stone in the advancement of the country’s development. Thailand 4.0 would focus on rotating country’s labor force into knowledge workers across key economic segments.

The process of achieving this is through exploring the use of technology, science and innovation for boosting the Thailand’s economy, concentrating on agricultural and industrial sectors, public health and medical technology, collectively with the overall trend for a robotics industry

In the steps for embracing a viable, value-based economy, building digital advanced start-up networks, developing digital communities, and creating digital parks for SMEs (Small and Medium-sized Enterprises), has become a priority for Thai government. It is easy to apprehend knowing that there are 2.7 million SMEs which account for 98 percent of all the business units in the country that also account for 37 percent of country’s GDP, 25 percent of exports, and offered more than 11 million jobs in 2015. ICT (Information and communication technology) therefore, is the key driver for national development, predominantly for gaining the transition to the knowledge-based economy needed under Thailand 4.0 implementation.

The digital economy has the potential for socio-economic impact and the country could build on the digital strategy for securing new opportunities for the nation.

  • Within two decades since 1994, the digital economy globally today worth $11.5 trillion, equal to 15.5 percent of the global GDP.
  • In the year 2016, Thailand formed the Ministry of Digital Economy and Society, setting in place a 20 year National Digital Economy Masterplan, spread across four phases:
  1. Setting the digital foundation
  2. Realizing digital inclusion
  3. Moving to total transformation, and
  4. Accomplishing global digital leadership
  • Since then, the country has propelled initiatives such as Thailand 4.0, Digital Thailand, and a special program to develop the Eastern Economic Corridor.
  • The 20-year National Digital Economy Masterplan is on the right track with numerous worthwhile initiatives:
  1. Establishment of hard infrastructure
  2. Hastening of the digital economy
  3. Encouraging digital government, digital society, soft infrastructure and workforce development
  • Thailand would be reaching its desired digital frontier by concentrating on evolving these key areas:
  1. Transformative business models
  2. Digital foundations (data sharing, future-ready networks)
  3. Cross-cutting institutions related to agile policymaking and strategic foresight
  4. Digital skills

As a part of this ongoing process, Azure Computers Thailand, a JV company of Aditya Group and a startup through Startup in Thailand initiative, has been helping a leading Thai bank with mobile technology application development for digital convergence on 4.0.

Digital Parks

Propositions for a 100-hectare digital park is launched, signaling a colonel step forward in the country’s digital aspirations. The Digital Park Thailand, situated in Sri Racha district of the Chonburi Province, was revealed at The Digital Thailand Big Bang Conference 2017. The site would be targeted particularly at technology and digital industries and it is expected that more than 58,000 people would live and work together.

The new district would be developed over next 10-15 years and is within the EEC special economic zone. Together with promoting the digital industries, there would be a range of education and science facilities and the formation of a new residential community.
This arrangement would also complement and support present industries and people in the expanse, embracing schools, universities, and segments including agriculture and automotive.

The master plan is designed by a global conglomerate which includes Savills, Broadway Malyan, and the TEAM Group, and would see the creation of several specialist clusters concentrated around a central park and lifestyle and retail hub. It would include a hotel and MICE facilities for supporting the business group within this Digital Park.

The plan would be planned around the digital boulevard and green connector joining the diverse clusters and a sizeable living zone would provide an array of quality housing facilities designed within an opulent, landscape backdrop, in close vicinity to community facilities. This would-be cyclist and pedestrian friendly with access to the public transport network of buses linking to a wider transit system which includes High-Speed Rail and key airports.

The first phases would concentrate on the development of a data center cluster and IOT Institute building. The Institute would include a mix of uses, like teaching, research and conferencing. The institute would seek to draw a number of anchor tenants, signifying the strategic cluster industries in the Digital Park.

The development assists the Thailand 4.0 agenda and country’s Digital Government Plan 2017-2021. Initiated in March 2017, the plan aims to create digital capabilities in across sectors such as tourism, agriculture, health, education, disaster prevention, investment, and public administration for driving social and economic progress.

As one of the leading boutique consulting firms for the last 15 years, Startup in Thailand has been assisting foreign companies to do business in Thailand through various business models like  Thailand Market Entry, Representation or Business Outsourcing models. Contact them to get a FREE Consultation.


Tax breaks for encouraging investment

The Thai government has set an aim of furthering investment in R&D to 1% of GDP over the next 3 years.

The Thailand Board of Investment would offer tax incentives for businesses investing in particular categories for helping improve the Thailand’s competitiveness in them. It includes technology, creative and digital industries, bio-industries, advanced manufacturing and high-value businesses.

Similar incentives would also be provided in several other sectors like minerals, agriculture, light industry, ceramics and basic metals, electronics & electrical appliances, machinery & transport equipment, paper & plastics and chemicals. The Board of Investment would offer businesses 8-year income tax exemption aligned with its 7-year investment promotion strategy (2015-2021).

The board would also liaise with several institutions, such as Kasetsart University and the National Science and Technology Development Agency (NSTDS) and The National Centre for Genetic Engineering and Biotechnology (BIOTEC), for promoting and developing core technologies. The board is also in talks with local and foreign investors for investing in technology so the knowledge acquired overseas could be used locally. However, it is required to develop human resources for supporting innovation and new technology and thereby supporting the demands of the market.

The Thai investors had invested 0.6% of GDP in research and development and are expected it to rise to 1% by the year 2020. In the past investment in research and development had been 70% and 30% private, however, the board hopes the tax incentives would promote a better involvement from the private sector. In brief, the Board of Investment is hopeful of attracting 600 billion Baht as a foreign investment by the end of the year as compared to 584 billion Baht last year.

Japanese investors surpassed other investors, followed by Chinese, who were among the biggest new investors in sectors like automobile equipment and solar cell technology.

Thailand BOI would also help in boosting local investment and creating confidence among the local investors. The Thai government believes that growing the investor confidence will also drive the nation towards Thailand 4.0.

Today, Thailand is seen as the investment hub for petrochemicals, electronics and automobile industries and these investments would drive the growth of country’s exports and would help in using the technology expertise received overseas in the local markets. Read more about Investment Opportunities in Thailand and how startup specialists can help you to setup your business in Thailand.

 

Author : Andy Aditya, CEO of Startup in Thailand, a part of Aditya Group

 

Andy Aditya

Andy Aditya

For the last 25 years, as a Startup specialist, Andy has started and built up over 20 companies in Thailand, under 15 diversified industries. He assists international companies to establish and grow their business in Thailand/Asia through their own branch setup or representations.

He has been an accomplished executive with a high-caliber in general management skills gained through hands-on experience in core business functions like strategic planning & operations, sales & marketing, international business & sourcing, product development & branding and financial & employee management.

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