THE GLOBAL COMPETITIVENESS OF LOCAL CREATIVITY
published : 24 Sep 2021 at 16:35
Amid the unprecedented environmental challenges presented by global warming and the heightened volatility in global trade in light of the disruptive forces of digital technology, the Thai government has focused on the creative economy as a key strategy to drive economic growth.
The Thai government has defined the creative economy as an economic engine which utilises the country’s rich and diverse intellectual capital to create artisanal products and services as well as digital content that appeal to global audiences, facilitated by the country’s advanced digital technology, especially rollout of 5G, and passionate young entrepreneurs and artists who are more attuned to global art and social trends.
Thailand’s Creative Economy Agency (CEA), a central body tasked with promoting engagement between the public sector and entrepreneurs and enhancing the competitiveness of Thailand’s intellectual property in the global market, has identified fifteen categories of goods and services to be classified under the creative economy, namely handicrafts, performing arts, fine arts, films, publishing, broadcasting, music, design, fashion, architectural services, advertising, software, Thai cuisine, traditional medicine and cultural tourism.
According to the CEA, Thailand’s creative industry had a total value of approximately US$44 billion in 20191, accounting for nearly one-tenth of the country’s gross domestic product. Within this creative industry, cultural tourism and the food industry generated the largest economic gains with each generating an average value of approximately US$8 billion during the period of 2014-2019, followed by advertising at US$6 billion.
In 2018, the creative industry employed approximately 830,000 people, equating to around 1.2% of the total population. As of the first quarter of 2016, more than of one-third of the creative economy workforce, or around 300,000 people, were engaged in the handicrafts supply chain. With global attention shifting towards environmental sustainability, products such as natural-dyed clothing, wooden crafts and upcycled products are expected to draw rising demand from consumers worldwide.
Providing work for around 200,000 people, advertising is the second largest employer in Thailand’s creative industry. Music, performing arts and fine arts each employ roughly 70,000 people, while architecture with 68,000 and design with 64,000 also have significant workforces. Films, broadcasting and photography each employ around 50,000 people, followed by software (40,000,) museums, galleries and libraries (14,000), and publishing (13,000).
The Thai government is also focusing on enhancing collaboration between the public sector and local entrepreneurs, along with promoting skills and ideas among art students to create new products from local intellectual capital. Under the plan to promote products from local tourist sites and wisdom, the Thai public sector plans to push forward premium handicrafts and local products through the promotion of product champions, to create high-value services, and to encourage startups in the creative economy.
An Abundance of Creative Juices
To promote knowledge of the creative economy at the grassroots level, the Thai government has moved forward with its Creative City project. Under the Ministry of Commerce’s Intellectual Property Department, the Creative City project is aimed at improving the participation of various sectors in the community to combine talent, knowledge and new technologies to generate jobs and boost local income from their uniqueness and identities.
Ten cites have been selected as prototypes under the project to-date, with one city chosen from each from the provinces of Chai Nat, Chiang Rai, Chiang Mai, Nan, Phetchaburi, Maha Sarakham, Yala, Lop Buri, Lampang, and Ang Thong, based on the United Nations Educational, Scientific and Cultural Organization (UNESCO)’s criteria.
Chai Nat province, located in the central region, is recognised for its variety of rice types and research that develops rice varieties through selective breeding. In Chiang Rai, Thailand’s northernmost province, Doi Tung has been selected as the city for inclusiveness for the development project that nurtures social and environmental sustainability.
Chiang Mai is recognised as a creative city in terms of crafts and folk art, while Nan is well-known for cultural heritage in architecture and traditional way of life. Located in the central region, Phetchaburi is regarded as a creative city for gastronomy. Maha Sarakham province in the northeast of Thailand, is selected as a city of learning for community development.
Yala in the south of Thailand is recognised as a bird city, as it hosts the ASEAN Singing Dove Competition each year. Meanwhile, Lop Buri in the central region is renowned as a city of renewable energy innovation, while Lampang in the north has been selected as a creative city for ceramic wares, and Ang Thong in the central region is well-known for the art of making traditional and made-to-order drums.
At the global level, four cities in Thailand have been designated by UNESCO as “Creative Cities”. They include Chiang Mai and Sukhothai, which have both been certified as a ‘Creative City of Crafts and Folk Arts’, while Phuket has been selected as a ‘Creative City of Gastronomy’ and Bangkok as a ‘Creative City of Design’.
BOI Offers Incentives to Support the Creative Economy
The Thailand Board of Investment (BOI) has classified the creative industry into three main groups, namely, creative business, digital business and tourism business, offering both tax and non-tax incentives to promote investment in a wide range of activities.
While the tax incentives provide exemption of Corporate Income Tax (CIT) for three, five and eight years, non-tax incentives aim to facilitate the establishment of new businesses, processing of the required certification, entry of international talents, and access to consulting services.
Among the activities eligible for maximum tax exemption of eight years are functional fibre, creative design and business development service, embedded software, high value-added software and incubation centres.
Under the BOI’s merit-based framework, activities that are not eligible for tax incentives may apply for three-year CIT exemption if they invest in research and business development. Activities in this group include fashion and clothing, leather shoes or bags, furniture, and toys.