Thailand’s Technology Focus
Thailand has been a mecca for technology startups since last decade. Information technology, mobile / web applications and gaming softwares. With a 66 million population in Thailand where mobile penetration is 106% (69m), it is quite likely that technology startup companies would be given the preference. Venture capitalists are mushrooming every year to fund suitable technology projects which are deemed to make a mark in the Asean Region.
Thailand’s Technology Focus
Thailand has so far been known as a great adventurous spot for vacations. Water sports, beach, music, arts and crafts were counted as the specialties of the country. And, Thailand market economy is largely depended on the tourists. But, in the recent few years, the Government of Thailand has taken countless measures to improve the economy and compete with the fast growing world. To achieve this, the government is offering alluring opportunities to welcome foreign investments as well.
No doubt that the software industry is always been considered to be a significant infrastructure sector for any nation. Several surveys and studies have claimed that international level of competitiveness progressively depends upon Information and Communication Technology (ICT) infrastructure of the country.
The fact is ICT has the potential to affect a country economically as well as socially. Thailand’s government has understood the prospects and therefore making efforts to expand the sector. The increased usage of the Internet and IT apps in the country is gradually pushing the overall market value of the IT industry upwards.
Initiatives taken by the Government
It has been more than a decade now, the government of Thailand is striving to position the country as one of the leading nation in the technology sector. It has made huge investments in infrastructure improvements, developing high-tech talent pool and offering a larger and more favorable business environment, especially for the multinational IT companies. To a great extent, the country has succeeded in achieving its goal. Today, the nation is counted amongst the leading provider of IT products and services.
As per records, the Thailand Board of Investment (BOI) had issued a new policy recently to endorse Thailand as a place that has the potential for future high-tech developments in the field of Software and IT. It also encourages the promotion of IT business and production of computers and related IT products. The BOI has also adopted the latest Skill, Technology and Innovation (STI) Policy. STI policy is a cross-sector approach that works to expand investments in the way of improving the IT skills and know-how of the people of Thailand.
The policy was officially approved in December 2003. It was expanded in the beginning of March 2004, and the BOI actively promoted the new incentive packages and IT industry expansion in front of international investors. As a result of all these efforts, Thailand’s IT industry has boomed to the next level suddenly. The nation has experienced a remarkable uptick in foreign demand for its IT services. An increasing number of companies have set up businesses in Thailand to get benefit from the nation’s trained IT workforce, comprehensive IT infrastructure, and outsourcing services.
Today, Thailand ranks amongst the top notch outsourcing service providing countries. This evaluation is based on the country’s cost index, resources and skilled professionals. Moreover, Thailand foresees substantial growth potential in the field of IT outsourcing.
Outsourcing is considered as an ever increasing domain in Thailand, which will continue to be in demand in the long run. This is one of the significant factors that contribute to the growth of Thailand’s economy and its IT industry. This was expected to increase from $22.4 billion to $18.8 billion by the end of 2010, an upsurge of 7.2%.
Scope of Setting up IT Business In Thailand
Doing business in Thailand is now easier and thriving compared to a decade back. The most significant factor that allows companies to choose Thailand as their outsourcing partner is the support and backing provided by the government. Its sustained support and commitment to make Thailand a smarter and more innovative nation has become successful.
The STI policy of Thailand is envisioned to improve the international competitiveness of the country’s IT industries and support its drive to develop an economy to become knowledge-based.
This is, in fact, an initiative to drive Thailand towards the high-tech industry worldwide. With several other countries across the globe aiming to reach the same goals, the BOI’s STI policy is crafted to enhance Thailand’s investment in IT sector that can form the foundation for many other prospects. In respect to growth and development, Thailand identifies the necessity to train IT workforce to meet the future demands.
Even at the university level, various intensive programs are encouraged to help students in achieving their career goals. These university programs intend to bring out nearly 50,000 business technology students every year to support the IT sector in Thailand.
Among the various investment opportunities in the IT industry, few significant options can be ERP software, video animation services, and online games such as Windows-based games. Video conferencing app and E-learning content developments have also lot of scope.
Additionally, various web-based and mobile apps are going to transform Thailand into a high-tech nation with tech-savvy people. Currently, there are more than 20 million users of Internet, 78.7 million mobile Internet users, 3.4 million subscribers via broadband and 18.3 million Facebook accounts in Thailand.
‘Smart Thailand’ strategy
The ‘Smart Thailand’ strategy, a project launched by the country’s government and its ICT Ministry, is part of the ‘ICT 2020’ framework. In addition to it, the government has also introduced ‘Smart City’ which is a pilot project that empowers the domestic industries to compete internationally. The basic requirement of the project is the availability of Internet access to every nook and corner of the country. This has created enormous market prospect for IT companies, i.e. hardware, software, and IT services. This, in turn, has huge scope for investment opportunities in Thailand.
Opening a business in Thailand is a much easier now. Assured Government support is provided to set up a company in Thailand. Also, private organizations and consultants help in setting up business in Thailand. You can hire startup consulting services in Thailand to help you understand the current scenario and place before you the complete market research reports.
Overview of Thailand’s Software Markets
As per reports, there were 870 IT companies offering software solutions in Thailand. In the year 2011, the production value received from these IT companies was approximately 29,418 million Baht, which demonstrated a growth of 10.1%. Out of this count, the major share was contributed by software which was about 60%, then followed by a 36% share by Software Services and least 3% by Mobile Applications. This may seem to be the lowest but, it is the highest growth rate of about 35% in the year 2012.
The remarkable growth of enterprise software markets has been ever increasing because the Government and businesses spend a lot in IT. The expansion of mobile phone services and noticeable embracing by the mobile users has led to a rise in the mobile app revenue. In addition, the growth of the IT services sector is due to the expansion of the Enterprise Software market in Thailand.
And, currently Thailand IT companies have strong market share in software services and mobile apps development sector, i.e. 87.9% and 85.9% respectively. However, the local companies have only a 56.7% market share for packaged software solutions. This is because the custom software is hugely dominated by the foreign IT companies.
Challenges in the IT Industry
The IT industry always faces piracy threats and security issues. The most prevalent problem in the sector is software piracy which is an ongoing issue in the IT industry of Thailand. It is known as one of the top countries in the world in terms of software piracy. The causes may include lack of enforcement of laws for copyright. The Government is taking serious steps to address this issue.
2. Lack of Sufficient IT Resources
Comparing the demand for IT services and software solution in Thailand with the resources for availing these services highlights the inability to meet the requirements and demand. This creates noteworthy scope for opening a business in Thailand. The Government is offering full support and assistance for doing business in Thailand.
3. SMEs in Thailand:
Technology helps small and medium-sized enterprises to build a competitive advantage by enhancing the organizational effectiveness and promoting innovation that endorses the abilities of companies to pursue new opportunities for their products and services in the market.
However, there are only a few IT applications and software solutions in this segment. It is indeed true that small and medium-sized enterprises are significant for any developing nation.
The technology has become pivotal in driving a nation’s competitiveness in every field. The software industry is gradually becoming the backbone of a country’s economy as well. And, Thailand is no exception in this regard. Therefore, it is the right phase to strike the ball and get into software and ICT business in the country.
How we helped Integrated Retail, Singapore in establishing their base
With the mounting competition in Thailand, it was difficult for the Integrated Retail for setting up their business firmly. All the more, Thailand is a thought-provoking land when it comes to retail marketing; with China playing appreciably well on the playground.
The biggest challenge was to implement a highly comprehensive retail business, covering all parts of the store. Along with this, seizing the partners with the quality work, and winning the trust of the market was quite tough to focus on, in a very short span of time.
We worked as an advisory partner and aided our client in finding the right substructure needed to support their business program through our start-up consulting services. Dissimilar to other serviced offices, we focus on offering an individualized functional environment with all- inclusive expenses for all the services at a secured rate.
The company is now successfully providing all the Information Technology solutions, be it software or hardware, offline retailing or e-Commerce, Integrated Retail has now outstretched its business through the nation.
How we assisted NIIFT Co. Ltd, Thailand to attain optimum business results
Working on common engineering projects, and sharing the load, we have helped the company head the crowd. NIIFT has been our collaborator and a distinctive start-up case with our Build Entrepreneur scheme.
Today, the NCL has documented the key vogue in plenty of merchandise and market sections throughout the various services and base or manufacturing industry. Working with different industries of textiles and apparel, dairy, food and beverages, hospitality and management, the company has successfully gained respect in timely work management and worthy results. Together, we have yielded a unique combination of leadership, technology expertise and partnership to set an example for the world.
For most startup tech companies, Board of Investments (BOI), Thailand, has special privileges offering benefits. Support from other Thai Technology organizations can really accelerate and ensure business success.
As Startup Specialists in technology field, we have helped several companies to startup in the past and we wish to continue the good work. We have a program specially for entrepreneurs in the technology space, wherein we identify and fund such ventures which are of interest to us. If you have Business ideas and you need some investment support in terms of Infrastructure and Operations, write to us with your plan for an evaluation and we would arrange for a discussion to take it forward.
As one of the leading startup consulting firms in thailand, our focus is to provide 360 degree business consulting support to our clients by consulting them in areas of investment opportunities in Thailand, business development in asia, recruitment, starting business in Thailand or being a Thailand representative.