BANGKOK — The term “Thailand 4.0” emerged about a year or so ago and has since been thrown around in a number of different contexts with little explanation.
Thailand 4.0 is an economic plan that must first be understood it in the context of overall Thai economic development. The government likes to spin this as the fourth iteration of an economic growth plan which progressed from 1.0 to 2.0 and 3.0 to the current plan of 4.0 – a term that dovetails nicely with the popular tech and Internet of Things interconnectivity term “Industry 4.0,” which is about automating smart manufacturing.
Going with the model put forward by the government to keep the context consistent: Thailand 1.0 focused on developing the agricultural base. Thailand 2.0 shifted focus to light industries and developing the economic structure to support the likes of food products, textiles and crafts. Thailand 3.0 saw a move to heavy industry, which involved the creation of equipment and machinery such as automobile production – an area the country became fairly prolific and proficient in.
With those three phases of economic development laying the foundation, Thailand 4.0 now looks to shift the economy to more of a knowledge base. The government has said it wants to focus on innovation, knowledge, technology and creativity.
The goal is to leverage these areas to improve overall life in Thailand in a few ways. Among them is trying to triple the average national income to USD$15,000 by 2032. It’s also trying to reduce social disparity and raise human value – which includes attempts to elevate at least five Thai universities to be ranked in the global top 100 within 20 years. Finally it wants to elevate environmental issues to make Thailand more sustainable and ready to face climate change.
Thailand 4.0 is a multifaceted plan that on the surface seems solid – all the right boxes are checked. The official program lays out five agendas:
The first looks to improve education and set up skill development programs to help workers retool for a knowledge economy.
The second agenda is about developing future industries and bolstering research and development.
The third agenda drills down into developing a vibrant ecosystem for entrepreneurs to attract more investment to the country.
Agenda item No. 4 takes aim at fostering grass roots innovation at the regional level by establishing “innovation hubs” in all 76 provinces.
And the final agenda of the Thailand 4.0 plan looks to proliferate Thai innovation across the ASEAN region as well as the global economy.
It’s a bold plan with a lot of moving parts and external factors that will need to be aligned if it’s going to succeed. But whenever there is a government program to advance the economy there are opportunities to be had.
I reached out to the managing director of Fluxus Thailand, Gareth Davis to talk about the impact Thailand 4.0 will have for Thai based tech companies and the challenges the kingdom will face with this plan.
“Thailand has a small but open economy. To prosper in the 21st century, it first needs to think about building strength within. This means promoting innovation, entrepreneurial spirit and an inclusive society that brings together the rich, the poor, and those in urban centers and rural areas,” Davis said, adding that “from this position, the country will be well placed to connect with the world and compete on the international stage.”
While opportunity will certainly open up in the local market under the Thailand 4.0 initiative – the push to a digital economy – there are some potential roadblocks that could derail the whole plan. Standing out in particular is locally available talent.
While a big factor of the plan seems to be attracting foreign investment to back local companies and innovation, there is currently a sizable skills gap in the market, not just regionally but globally. To be fair, the first of the five agendas does address improving education and skills training to help bolster the workforce, but that is no small undertaking and it takes time to develop and scale.
While it’s certainly possible to import the skilled workers needed to fill the gaps that are left while the workforce is retooled in the meantime, there doesn’t seem to be any provision in the Thailand 4.0 plan to address this.
At the end of the day Thailand 4.0 is ambitious and bold. It looks to tackle the shortcomings of the Thai economy and build the country to be on a par with more prosperous and economically advanced nations. All criticism aside, no plan is perfect, and poor execution can undermine the best. Execution is what the future success of Thailand 4.0 will come down to: If the right people are charged with making it a reality and given the resources to make it happen, then it stands as good a chance of success as any other plan. If not, it doesn’t take much imagination to assume the outcome.
Lets hope for the former.