The government plans to grant greater tax privileges to private firms and government agencies that buy and adopt locally invented innovations in a bid to foster research and development (R&D) activities.
Prime Minister Prayut Chan-o-cha yesterday backed a proposal to amend a regulation to assign state agencies to set aside up to 30% of their annual procurement budget for buying innovations.
Prime Minister Prayut Chan-o-cha visits the innovation exhibition at Sirindhorn Science House in Pathum Thani last week.
The move came after the prime minister visited an innovation exhibition last week at Sirindhorn Science House in Pathum Thani province.
The government has slashed the tariff on imported equipment for locally invented innovations and R&D as well as raised tax deductions for R&D to 300% from 200%.
According to the regulation revision, state enterprises have been assigned to set aside 3% of their annual profit for R&D to encourage people to create more innovations.
Suphan Mongkolsuthee, chairman of the Federation of Thai Industries, said the policy would help to support innovation, which had hardly gained acceptance from Thai companies that clung mostly to expensive imported technology.
"A plan to push innovations into real business uses has been mentioned for many years, but they have not been implemented seriously until this time," he said.
"The prime minister has paid a lot of attention to innovation and R&D."
Mr Suphan said Thailand should take advantage of developing innovation to free itself from the middle-income trap in which countries attain a certain income but get stuck at that level with a weaker competitive advantage.
Kan Trakulhoon, chief executive and president of industrial conglomerate Siam Cement Group (SCG), said Thailand was on the right track in supporting innovative firms, particularly small enterprises, by turning innovation into commercial products that could be used in the real business sector.
"Greater R&D budgets may not be as important as knowing how to turn a new innovation into a commercial product that can be used," he said.
Mr Kan said SGC allocated 4.8 billion baht for R&D last year, up by 77.1% from 2.71 billion in 2013. The budget is expected to increase to more than 5 billion baht next year.
The National Science and Technology Development Agency (NSTDA), which oversees Sirindhorn Science House, expects the private sector's annual investment in R&D will double to 120 billion baht by 2017 due largely to the government's measures.
President Taweesak Koanantakool said the NSTDA last year teamed up with the Securities and Exchange Commission and leading businesses to encourage small and medium-sized enterprises that invest a lot on R&D and innovation to list on the bourse.
In the past two years, 16 small businesses have launched IPOs on the SET and MAI to raise funds for expansion.