BCG economy thriving on rich biodiversity and technological strengths
published : 5 Aug 2020 at 08:00
Thailand is embracing the Bio-, Circular and Green Economy (BCG) model as a path towards more sustainable growth, which will be marked by more employment, higher people’s incomes and an eco-friendly society.
Focusing on applying technology to further enhance the market values of agribusiness products and the service sector and transforming towards environment-oriented economy, BCG is creating significant business opportunities in Thailand while enabling the people to take urgent actions against the climate change.
Thailand is well-positioned to become a global investment destination for BCG, thanks to its vibrant agribusiness industry, advancing biotechnology, distinctive service sector, growing consciousness on environmental challenges, and concrete government support.
A study by the Ministry of Higher Education, Science, Research and Innovation shows that the estimated value of activities in BCG economy could grow to one-fourth of the Thailand’s gross domestic products (US$ 137 billion)1 by 2025 from one-fifth at present2. Based on this trend, Thailand’s economic growth will be driven by increasing competitiveness in four key industries namely agribusiness, bioenergy and biochemicals, medical and wellness services as well as tourism and creative economy.
Thailand Board of Investment (BOI) is currently offering investment promotion incentives to a wide range of activities in BCG notably biotechnology, biochemical production, biogas and biomass energy generation, food and animal feed production, energy service companies (ESCO) and recycle facilities.
The BOI has recently broadened eligible activities in the agribusiness industry to cover investment projects applying plant factory technology. The enhanced incentive programs also cover related activities to the farming process including silo and cold storage room operations, animal feed production and manufacture of agricultural by products which apply technologies to improve energy efficiency and reduce greenhouse gas emissions.
These incentives combined with the investment promotions that the BOI previously offered to investment projects that adopt smart farming technologies such as computerized testing and screening of seeds, drone for plantation inspection, and use of modern Agri-tech are among Thailand’s moves to push forward “precision agriculture” which will improve competitiveness of the farm sector.
Thailand boasts the presence of many research and development powerhouses, as a result of the country’s continued efforts to strengthen institutions and human resource to support biotechnology during the past decades. Most notably, the National Center for Genetic Engineering and Biotechnology (BIOTEC), Thailand Center of Excellence for Life Sciences (TCELS), National Omics Center, Bio Center of Excellence and science academies have advanced the country’s research and development used in the agricultural sector, environmental management and healthcare through improved strains of economic crops, gene therapy and vaccine development for tropical diseases.
To further support Thailand’s development in R&D, the government has introduced a policy to nearly double the country’s spending in R&D to 2% gross domestic product by 2027, comparing with 1.1% in 20193. The policy calls for the Thai government to offer additional tax and non-tax incentives to ramp up the private sector’s R&D spending with an aim that it contributes to three-fourths of the total spending target and increase the public sector’s spending in R&D.
Meanwhile, the Ministry of Higher Education, Science, Research and Innovation has reoriented Thailand’s tertiary education curriculums to ensure graduates are equipped with skills that match the demand from businesses, especially for the industries identified as the country’s new sources of growth, including BCG4.
Thailand is pursuing a goal to become the leader in BCG economy or the “Bio Hub” among ten-membered Association of South East Asian Nations (ASEAN) by 2027, with a plan to improve competitiveness in industries that underpin growth particularly processed foods, biochemicals and medical and wellness sector. Thailand’s collective efforts by the public and private sectors and academia as well as its advantages in bioeconomy ecosystem poise to propel the country towards ASEAN’s top position for BCG in the foreseeable future.
Thriving Food and Farm Technology
The pandemic of the COVID-19 virus has underscored Thailand’s competitiveness as a major global exporter of food and processed food products as international shipments of these products have held up during the health crisis. The Thai government has earmarked a budget of US$ 213 million for the Ministry of Industry to implement action plans to further enhance global competitiveness and value added of the Thai food products over the next seven years, given to the industry’s sizeable employment and significance in the local industrial supply chains5.
The plan targets to upgrade the processing of products such as rice, fishery, vegetables and fruits, livestock and biofood, apply digital technology to facilitate innovations and develop them to the commercial scale, beef up packaging as well as assisting entrepreneurs to access the global market.
As people’s health and environmental consciousness grows, Thailand has a proliferation of new breeds of entrepreneurs for production of healthy diets such as plant- and insect-based proteins and organic products. Thailand aims to enhance diversification and differentiation of food products and upgrade more of them towards products of higher value such as future healthy food and functional ingredients which will use to produce healthy diets, medical food and cosmeceuticals.
Growing Circular Economy
Thailand is embracing the circular economy model which focuses on economic transformation towards the greatest use of resources, the minimum new resource inputs and waste reduction. While serving as the Thai people’s approaches towards the environmental challenges, the circular economy’s three key principles of reduce, reuse, and recycle along with the zero waste business model are emerging as one of Thailand’s most promising opportunities across employment spectrums ranging from local communities to small and medium-sized businesses and corporates.The Eastern Economic Corridor (EEC) has also adopted the circular economy as framework for operations6.
Growing environmental consciousness among Thai people and their rich creativity have created numerous businesses in the country’s circular economy, as seen from proliferation of recycle and reuse activities and eco-friendly product designs and services. For example, businesses turn agricultural raw materials into housing and decorative items, recycle old textile threads and reuse certain construction materials in new projects7.
Importantly, Thailand’s vast production of agricultural raw materials such as cassava, sugarcane and palm oil coupled with the established agribusiness supply chain have fueled local renewable energy and waste-to-energy industries.
Thailand’s Ministry of Energy’s Integrated Energy Blueprint calls for significant growth of biomass, biogas and electricity8 from municipal and agricultural waste over the next 15 years, serving the efforts to boost incomes in the farm sector and the grassroots economy and the country’s plans for environment restoration.
The government targets that renewable energy and waste-to-energy technologies will replace around one-third Thailand’s total energy
consumption, creating significant new opportunities for local communities to turn agricultural raw materials and waste to energy within the timeframe9.
The Business of Going Green
By promoting Green Economy concept, Thailand is transforming its transportation networks, manufacturing process, consumer behavior, urban development and environmental management for lower carbon dioxide emissions.
The biochemical industry is one of the country’s targeted industry as it has the ability to add significant value to raw agricultural products such as sugar cane and rice husk which are used to produce polylactide to feed manufacture of bioplastics products which are currently among the country’s top exports items.
Under the Public Private Partnership for Sustainable Plastic and Waste Management (PPP Plastic), Thai corporates have collaborated with the government to reduce use of plastic materials and replacing plastic with biodegradable materials. The government’s Plastic Waste Management Roadmap calls for all plastic wastes to be reused of by 202710
- The Bank of Thailand’s average exchange rate of 31 baht to a dollar at as 30 June 2020