Mahanakorn Partners Group Co | View firm profile
One hundred years ago it would have been inconceivable to see roads dominated by electric vehicles, homes with cleaning robots, and colleagues in virtual spaces. Today, Thailand’s short-term and long-term innovation policies are being influenced by these realities.
To ensure that Thailand is the pre-eminent host in Southeast Asia for business and investment advancement, the Thai economy is undergoing significant and widespread developments. In this article, we explain multiple factors in several areas that have been key in impacting Thailand’s attractiveness as an innovation host.
Factors influencing Thailand’s Innovation Policies
Aging Society
Thailand’s population is rapidly aging.
If the Kingdom follows its current trajectory, 28% of Thai’s will be aged 60 and over by 2032. This demographic shift will result in increased funding and time spent on healthcare services and products to care appropriately for the elderly. An aging society, paired with Thailand’s decreasing birth rate, creates a need to increase education for and upskill youth to maximize labor productivity.
Consequently, the following industries will be impacted substantially:
✓ “Medical Hub and Affluent and Medical Wellness Tourism”
✓ “Education and Human Resources Development”
Health
The COVID-19 pandemic has created a global shift towards a health-conscious lifestyle.
Domestic consumers are becoming more knowledgeable about the products they purchase – increasingly focusing on its origin, ethics, and source.
Inevitably, the quality of food and nutrition will increase in the near future, along with the food delivery sector, which has grown 31% (catalyzed by the pandemic). This presents a significant opportunity for the “Food for Future Industry.”
The pandemic has also seen a surge in growth within pharmaceutical and health services. Introducing more efficient, effective, and affordable medical technology can support Thailand’s biochemistry industry and medical wellness tourism. The recent rise of telehealth and remote services is also stimulating the automation sector. Such widespread advances are rapidly increasing the uptake of new technologies.
Ultimately, one can expect to see the following industries transform, post-pandemic:
✓ “Food for the Future”
✓ “Biofuel & Biochemical”
✓ “Automotive & Robotics”
✓ “Advanced Agriculture & Biotechnology”
✓ “Education & Human Resources”
Digitization
Covid-19 has not only forced Thailand to re-evaluate how they approach individuals’ health, but their work and education.
internet penetration reached 77.8% of the Thai population in 2022
✓ The adoption of online learning allows the population to upskill and train remotely, and with flexibility.
✓ Thailand’s digital industry has experienced remarkable growth.
✓ 22% of enterprises in Thailand went digital as part of their business operations and 59% of enterprises in Thailand are at the ‘gradually embracing digital transformation’ stage
Automation
Robotics is the future in Thailand. It is expected to revolutionize multiple Thai Industries.
AI and machine learning will optimize efficiency in business operations for smoother production.
Using robotics for general and mundane functions will allow workers to upskill for more advanced tasks, enhancing their capabilities.
General-purpose robots will revitalize how we provide hospitality and healthcare services.
Some key industries that will experience the benefits of automation are Agriculture and Farming, Autonomous vehicles, Health tech, Facial recognition technology, Augmented reality and Retail fashion.
The following industries are likely to be impacted by digitization and Automation the most:
✓ “Automation & Robotics”
✓ “Advanced Agriculture & Biotechnology”
✓ “Education and HR Development industry”
Environmental Sustainability
The social, economic, and environmental costs of pollution are shifting to the forefront of ASEAN decision-making.
Thailand prioritizes sustainable long-term growth through the Bio-Circular-Green (BCG) economy model. This is centered around educating and informing individuals about decarbonization and green mobility. Nearly 80% of respondents already report making more environmentally friendly and sustainable choices (in a PwC Survey).
Given this, it is anticipated that electric vehicle demand will rise among consumers in Thailand. The Thai government is already taking steps to facilitate the smooth transition to EV use, with the goal of building 690 charging stations nationwide. This large-scale investment will create a magnitude of jobs for skilled individuals and further promote the need for technical skills and training.
The following industries are likely to be impacted by environmental sustainability most significantly:
✓ “Biofuels & Biochemicals”
✓ “Advanced Agriculture & Biotechnology”
✓ “Next-Generation Automotive”
✓ “Smart E&E”
✓ “Education & Human Resources Development”
Summary of Thailand’s highly competitive innovation industry and progress
✓ Thailand placed 43rd in the Global Innovation Index 2021. This was an increase from 2020 attributed to improvements in infrastructure, knowledge, and technology outputs.
✓ Thailand placed third in ASEAN in both internet penetration, and market sophistication ranking 22nd and 27th globally respectively. This demonstrates a solid performance in terms of technological strength, loan availability, an investment-friendly environment, market access, competition, and scale.
Figure. Global Megatrends and their impact on Thailand’s S-Curve policy.