With modern technologies such as robotic systems and artificial intelligence (AI) increasingly becoming an essential part of business, entrepreneurs are being encouraged to seriously consider a shift to newer, technology-driven operations to increase their competitiveness.
However, a number of small and medium-sized enterprises (SMEs) are lagging when it comes to employing modern technologies, according to the Federation of Thai Industries (FTI). This correlates with similar findings from a recent survey conducted by the University of the Thai Chamber of Commerce (UTCC).
Unless they make changes, SMEs will lack the effective tools to deal with business issues, particularly those involving operating costs, said the FTI.
SLOW ADOPTION
Though some Thai entrepreneurs are using more advanced technologies, including robots, the uptake remains low among SMEs.
In 2023, Thailand imported more than 3,600 robots for use in its industrial sector, reflecting progress as the country ranked 15th globally and first in Southeast Asia in terms of the highest number of robot users, according to the International Federation of Robotics.
Robots and automated systems are extensively used in several industries, such as car manufacturing, food and beverages, electronics, metalworking, medical and cosmetics, as well as plastics and polymers.
Robotic technology and AI are mostly used by large companies that produce electric vehicles (EVs), medical equipment, semiconductors and circuit boards.
"Companies in these industries have a large budget to invest in robotics and AI technologies," said Kriengkrai Thiennukul, chairman of the FTI.
Investors are keen to invest in these industries because they are being supported by the government. EVs and smart electronics are among 12 targeted S-curve industries to be based in the Eastern Economic Corridor, which is being developed into the country's high-tech industrial hub.
Mr Kriengkrai said he estimates only 2-3% of Thai industries have reached the Industry 4.0 level, meaning they use advanced technology in their daily operations.
In 2021, the Industry Ministry published findings that found only 2% of Thai industries were considered to be at Industry 4.0.
Referring to the fourth industrial revolution, Industry 4.0 denotes factory operators that combine digital technology with data analysis.
However, SMEs lag behind the corporate giants. A significant number of SME respondents said they have no plans to invest in digital technology this year, according to a survey conducted by the UTCC.
Some 400 SME respondents from five industries -- agriculture, manufacturing, domestic trade, international trade, and tourism and others -- were interviewed about their investment plans for technological innovation as well as the benefits from such investment.
The pollster found 34.3% of respondents have no plans to invest in new technologies this year, but could do so in the future.
Another 31.5% said they have no plan to invest because it is unnecessary to do so, while 30.2% indicated they are limited by financial constraints.
Only 4.1% said they would invest in new technology this year, with most of these companies micro-businesses and mid-sized firms, according to the survey.
TECH PROMOTION
The public and private sectors are promoting greater use of modern technologies, including introducing robotics and AI adoption, believing they can help SMEs overcome business challenges.
Many companies have collaborated with government agencies and vocational schools to jointly provide courses on robotic technology and robot maintenance.
One example is an educational project initiated by SiS Distribution (Thailand), an IT distributor, and Dobot, a China-based manufacturer of collaborative robots.
"SiS Distribution and Dobot are holding discussions with vocational schools on a plan to offer training programmes on robotic technology to support the industrial sector," said Somchai Sittichaisrichart, managing director of SiS Distribution (Thailand).
SiS and Dobot are also working on a project to market Dobot's robotic technology in Thailand, with SMEs expected to be a major target, he said.
Dobot wants to sell robots to SMEs to help them cope with labour shortages, reduce operating costs and work time, and ease their concerns over planned daily minimum wage hikes.
Local manufacturers in the food, shoe, steel and iron, and agricultural sectors mostly utilise labour-intensive production processes, making them anxious about labour shortages and planned wage increases, according to the FTI.
The tripartite wage committee, which consists of representatives from the government, employers and employees, resolved to increase the daily minimum wage, which took effect on Jan 1, 2025.
The new daily minimum wage differs by province, with the rate in Chachoengsao, Phuket, Rayong and Surat Thani's Samui district rising to 400 baht.
Increased use of robotic technology to replace human labour could help entrepreneurs deal with these wage and labour challenges, noted the FTI.
HELPING HAND
The Industry Ministry previously launched a 2.5-billion-baht soft loan programme meant to encourage SMEs to upgrade their factory technology to robotic and automation systems.
The soft loan, which carries an annual interest rate of 1%, should help SMEs modernise their factory operations, in line with the government's Thailand 4.0 scheme that emphasises a transition to technology and high-level services.
The FTI is helping its members, which are mostly SMEs, by encouraging them to use more computer programs to improve their operations and reduce operating expenses.
As certain forms of software are expensive and SMEs have a limited budget, the FTI's Digital Industry Club was asked to design and compile necessary computer programs, then sell them to SMEs at affordable prices. Essential programs cover accounting and production control.
The FTI is also preparing an AI roadmap for the industrial sector as this technology becomes increasingly important, expected to be a powerful tool to drive businesses forward, said Mr Kriengkrai.