Thailand slipped one position to 67th in the 2020 Global Talent Competitive Index (GTCI) of 132 countries, weighed down by poor vocational and technical skills.
The GTCI report was developed by INSEAD, one of the world's biggest graduate business schools, in partnership with HR solutions provider Adecco Group and tech giant Google.
The report was recently unveiled at the World Economic Forum in Davos, Switzerland.
"For Thailand, more could be done to improve talent management and talent competitiveness, which would in turn lead to increased productivity and economic development," Bruno Lanvin, executive director for global indices at INSEAD and GTCI Index, told the Bangkok Post.
Thailand was ranked 66th in the 2019 index and 70th in 2018.
The GTCI is an input-output model that considers what countries do to produce and acquire talent (input) and the kind of skills that are available to them as a result (output).
The input side concerns how countries enable, attract, grow and retain talent, while output involves vocational and technical (VT) skills and global knowledge (GK) skills.
Thailand was ranked 50th in enabling, 60th in attracting, 72nd for growth, 76th for retention, 86th for VT skills and 61st for GK skills.
VT skills are described as technical or professional skills obtained through vocational or professional training and experience.
According to Mr Lanvin, Thailand needs urgent improvement in vocational and technical skills. It should focus on education, especially secondary education, he said.
The country faces challenges that include raising mid-level skills, increasing investment in secondary and tertiary education, and improving opportunities for lifelong learning, Mr Lanvin said.
Compared with peers in the Eastern, Asean and Oceania region, Thailand ranked 11th out of 15 countries in the grouping.
The country trailed Malaysia, Brunei, the Philippines and Indonesia but surpassed Mongolia, Vietnam, Laos and Cambodia.
European countries continued to dominate the index, holding 17 of the top 25 positions.
Switzerland held on to the top spot, followed by the US, Singapore, Sweden and Denmark.
Yemen ranked the lowest, trailing Angola (131st), the Democratic Republic of Congo (130th) and Burundi (129th).
"AI is a game-changer in every industry and sector," Mr Lanvin said. "At this critical juncture, the race for AI-capable and AI-compatible talent and the quest to develop the skills required will only intensify."