Digital Thailand : Emerging Opportunities With A Tough Road Ahead

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Transforming Thailand into a “Digital Economy” is one of the government’s top priorities to foster the economic and social prosperity of the country

The Thai government has announced its “Digital Thailand” plan that lays out development plans for related digital infrastructure and personnel.

Highlight

• Transforming Thailand into a “Digital Economy” is one of the government’s top priorities to foster the economic and social prosperity of the country. During the past year this policy has progressed, with the establishment of a Ministry of Digital Economy and Society and the drawing up of a “Digital Thailand” plan. The government is also accelerating the roll out of a national broadband project. On 7th December 2016, the cabinet has recently assigned TOT to lay down the broadband internet for 24,700 villages, while the office of the National Broadcasting and Telecommunications Commission will handle the installation for the remaining 15,732 villages.
• EIC views the Digital Economy policy opening up new opportunities to a wide range of businesses, but at the same time introducing new challenges to traditional businesses. Meanwhile, workers that lack digital skills will need to adjust to future changes.

Governments around the world have shown interest in a “Digital Economy”, whilst many are using this type of policy to boost economic growth.

More than 80% of OECD member countries or developed nations, including Australia, Japan, and France have established national strategies related to a digital economy.

Meanwhile, neighboring Malaysia put together a development plan for their transition towards a digital economy called “Digital Malaysia” in 2012. As a part of their plan, a national broadband network has been developed together with related ecosystems such as the establishment of e-Government and Digital Entrepreneur programs.

After only two years of implementation, the policy has given the Malaysian economy a significantly boost, with ICT industry incomes increasing by 10% per year or up to three times the growth rate seen over the past two years.

The Thai government has announced its “Digital Thailand” plan that lays out development plans for related digital infrastructure and personnel.

This will give rise to new opportunities for businesses throughout the value chain in the ICT industry and unlock the path towards “Thailand 4.0”, or the innovation-driven economy age.

Most projects under the plan are related to enhancing the quality of the digital infrastructure crucial to the development of new innovations. Some example projects are the national broadband network in 40,432 villages and submarine cable, which together account for 20 billion baht in investment. This cash injection, therefore, will likely benefit electronic equipment manufacturers, software firms, Internet service providers, and system integrators.

Furthermore, the Digital Thailand plan will also create new opportunities for other types of businesses, including Startups and SMEs, which will get support from the establishment of incubation centers and e-commerce knowledge sharing programs.

Moreover, business related to e-commerce platforms or logistics will stand to gain from the rise in demand for the delivery of goods that will result from a fast growing e-commerce market.

Digital Thailand will also induce new investment from the private sector.

In the case of England and Canada, investment in broadband infrastructure has had a crowding in effect of up to 10 times. This kind of investment also has a multiplier impact, making their contribution to GDP up to 15 times the initial investment value.

In view of such gains, Thailand’s national broadband network, valued at 15 billion baht, has the potential to spur a total of 150 billion baht in investment from the private sector and increase Thailand’s GDP by 225 billion baht, or 2%

The transition towards a Digital Economy, however, will introduce new challenges to traditional businesses. As technology revolutionizes the way business is conducted, those that do not adapt to such changes will have difficulty competing with new startups possessing superior technology expertise.

A good example is Uber, which has become a direct threat to traditional taxi businesses. Nevertheless, the move to a digital era will take time.

Author: Issarasan Kantaumong

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