The National Innovation Agency (NIA) has revealed trends that could generate challenges or opportunities for local startups.
The agency will continue to encourage more impactful startups to woo foreign startups and help local startups go global.
The NIA aims to establish a startup fund of 1 billion baht once the Startup Act comes into effect. The law is expected to come into force later this year.
Krithpaka Boonfueng, executive director of the NIA, said this year would be a challenging year for startups due to the economic slowdown and intense competition from both local and international players.
The trends when it comes to tech investment in Thailand this year would focus on technologies that align with the changing behaviours of consumers and emerging new tech trends, particularly in three key areas.
The first area concerns data centres. As the demand for massive data processing grows, particularly within the rapidly expanding AI industry, Thailand is becoming a major target for data centre investments in the region.
Data centres have grown by over 50% in Thailand over the past three years, with the country ranking third in Asean.
Notably, more than 30 data centre projects were approved for investment promotion by the Board of Investment in 2024, with a total investment value just under 100 billion baht, mainly from leading global firms in key economic areas of the country such as Bangkok, Chonburi and Rayong.
This reflects investor confidence in the government's supportive policies and measures.
Looking ahead, Thailand's investment potential in this area is projected to reach roughly 260 billion baht over the next three years.
The second investment trend is in the area of AI, particularly generative AI, which is expected to revolutionise social, economic and knowledge landscapes, as well as people's daily lives.
AI agentic systems, which can think, analyse and make decisions autonomously, are also emerging. These systems can handle complex tasks and solve multi-dimensional problems.
More than 70-80% of corporate executives and investors believe AI agents will be crucial for businesses in areas such as decision-making, production, problem-solving, and services. These systems will respond quickly to market needs and help reduce resource usage significantly.
The third area is in the area of climate tech, sustainability, and environmental, social and governance (ESG).
Startups focusing on sustainability and ESG issues will see opportunities and challenges in developing solutions related to environmental data, social data, and governance data.
This includes innovations in calculating and managing greenhouse gas emissions, which are expected to attract significant investment.
Long-term partnerships and entry into new markets, such as Europe where sustainability is a key focus, will also provide growth opportunities to startups.
Consumer support for sustainability is increasing across multiple generations, which will attract more investment and government support.
The global market for environmental technology is expected to grow significantly, with projections indicating an average growth rate of nearly 25% annually over the next 10 years.
Ms Krithpaka added that for 2025, the NIA is committed to defining and promoting startups, particularly in the impact tech sector, as a key mechanism to drive the economy and society, and enhance the image and recognition of Thailand as an "Innovation Nation", improving the country's innovation index ranking.
Ms Krithpaka added that in 2024, Thailand had a total of 2,100 startups, of which 700 were in the pre-seed stage, while 1,400 were in the go-to-market or growth stage.
Compared to other countries in Southeast Asia, Thai startups have shown continuous growth, with a 4% increase in seed funding rounds in 2024 compared to the previous year.
Furthermore, according to the 2024 Global Startup Ecosystem Index by StartupBlink, Thailand ranks 54th globally and fourth in Southeast Asia, after Singapore, Indonesia and Malaysia. This reflects the progress of Thailand's startup ecosystem.
Moreover, three Thai cities -- Bangkok, Phuket and Chiang Mai -- are included in the top 1,000 global startup cities, earning international recognition as promising hubs for business startups.
Pariwat Wongsamran, NIA deputy executive director of innovation systems, said investors tend to invest in deep tech, in particular medical and biotech and climate tech.
"Asia and Southeast Asian startups are gaining traction for choices and value for money," said Mr Pariwat.
Thailand is also one of the global startup landing pads due to its low cost of living, smart visa and expansion gateway to the region.
"We also have partnerships to help Thai startups go global with places such as Vienna, Hong Kong, Japan and South Korea."
Ms Krithpaka added that the NIA has a 1-billion-baht budget for this fiscal year, of which 600 million is for funding startups.