The Bank of Thailand forecasts tech startups will account for 1.5% of the country's GDP over the next two decades, while a dearth of talent is the key long-term risk.
The true value of local tech startups is expected to be 163 billion baht in 2037, representing 1.45% of GDP, said Jirath Chenphuengpawn, senior economist at the economic and policy department. The segment has showed positive growth over the past two years, he said.
Despite the positive growth of local tech startups, of which there are 1,000, they are still below international standards, which average 1,800 firms per country.
Local tech startups' performance is also below global standards, said Mr Jirath.
On average, local startups with potential to list on the stock market, sell shares, or be merged or acquired have a combined value of US$16.4 million (545.7 million baht), he said.
During 2013-2017, there were 3-4 local startups that reached maturity annually.
Given the short-term cycle of the business, 90% of tech startups in Thailand close after three years of operations, while 1% survive after five years. The business cycle of other products averages 5-7 years.
The number of tech startups jumped to 500 in 2016 from 100 per year earlier, but only 50 are expected to survive.
Mr Jirath said a lack of human resources, particularly software engineers and computer programmers, both in terms of quality and quantity, is the country's key risk for business development.
Software engineers who have at least two-years' experience only account for 32% of the total sector, while more than 50% of them having no experience.
In Toronto, software engineers with at least two years of experience represent 68%.
"With these constraints, Thailand has no unicorn tech startups, compared with eight unicorns in Asean coming from Singapore, Indonesia, Malaysia, and Vietnam," said Mr Jirath.
He said related parties should cooperate on human resource development in the tech arena.
The government should also provide tax incentives to both develop new players and recover failed tech startups, said Mr Jirath.
But he said local tech startups have no problem when it comes to funding accessibility, which constitutes a big advantage for them.
The funding comes from several sources, including venture capital and angel investors from home and abroad.
There is around $100 million worth of funding from domestic venture capital supporting local startups.