Thai public and private sectors invested 1% of GDP in research and development in 2017 (Surveyed in 2018)reaching this goal a year sooner than expected, pushing Thailand forwards strategically in the 21st century.
or Thailand to adapt to the 21st century as it unfolds, like the rest of the world, it has to highlight research and development as significant tools, both for the public and private sectors. This will stimulate the country sufficiently for it to deal with disruptive technologies and innovations. Therefore, the National Science Technology and Innovation Policy Office (STI), as a government policymaker, has laid down steps to prepare the country as a whole.
Private sector investmentin research and development in 2017 (Surveyed in 2018)
Dr. Kitipong Promwong, Secretary General of the STI, disclosed that 155,143 million baht was invested in research and development in Thailand in 2017 (surveyed in 2018), up 36% from the year before. The figure is equal to 1% of the country’s gross domestic product (GDP), a goal reached a year faster than expected. The achievement is seen as being significant. Moreover, if the country continues to promote investment in research and development in this manner, no later than 2021, the figure is expected to hit 1.5% of GDP. At the same time, the number of full-time researchers will rise to 25 per 10,000 citizens. The proportion of researchers has increased steadily over the past few years, an average annual increase by 4 per 10,000 population until it reaches 21 researchers per 10,000 poluation at the present. Investment in research comprises two categories: private and public sectors. Private sectors invested 123,942 million baht, which was 80% of the investment nationwide or 0.80% of GDP, up 50% from the prior year’s figure of 82,701 million baht or 0.57% of GDP. Public sectors invested 31,201 million baht, or 20% of R&D investment in the country.
Main factors contributing to investment in research and development
Investment in research and development hit 1% of GDP faster than the original goal due to two main factors. There was increased awareness among entrepreneurs of the need for investment in research and development to boost competitiveness. Moreover, the government implemented a range of measures to encourage private sectors to invest more in research and development. These measures included: 1) providing funding for SMEs and start-up entrepreneurs in innovative business areas, 2) promoting measures from the BOI providing additional benefits to R&D projects 3) expanding economic innovation zones such as ‘Food Innopolis’, and 4) imposing favourable funding conditions for private investors.
Automobiles, Food, Petroleum: research champions
The manufacturing industry with the highest investment in research and development is the automotive industry, which invested 18,855 million baht in R&D in 2017 (surveyed in 2018). The industry invested in the development and improvement of production of electric automobiles and construction of a facility for testing cars. The auto industry is adapting to support targeted technologies such as hybrid electric vehicles (HEV), a cutting-edge environment-friendly technology that combines innovative and advanced elements.
The food industry invested 16,203 million baht in research and development in several areas, including: automated production processes, packaging, studying consumer behaviours to improve processed food products, and preparation of instant and processed foods. This industry is constantly developing new products to better meet the needs of consumers and market trends. Several such companies have set up research and development innovation centres of their own.
The petroleum industry invested 11,721 million in research, most of which went into, petroleum production and transportation technologies, applied energy & automotive technologies, alternative fuel technologies, and etc.
Financial services and insurance invested the most in research and development among service sectors, amounting to 6,007 million baht. The money was invested in research and development to improve services, including FinTech development to make financial services delivery more modern and responsive.
Other business service groups such as scientific testing and calibration services saw R&D investment amounting to 4,724 million baht. Again, this was much higher than last year, boosted by purchasing and developing processes to test new products that are already becoming widespread.
The wholesale and retail sectors saw the highest investment in research and development, amounting to approximately 10,192 million. The main focus was retail/convenience stores and grocery stores. This reflected entrepreneurs turning to research and development within their own companies as they tested new products and improved production processes. Wholesale businesses invested 7,995 million baht in R&D, covering development of production processes and laboratories, and hiring more research personnel, etc.
The survey of innovation in 2018 found that approximately 76% of entrepreneurs were focused on complex and challenging areas requiring more knowledge and technology and therefore research and development. This was in accordance with activities creating innovations, signalling how entrepreneurs paid more attention to research and development within the organisation or group of companies. This was clearly observed as they paid for knowledge from outside that they needed to improve their operations. The process began with studying the feasibility of the product, followed by testing the product and delivering it to market.
Markets and consumers pushing private sectors to invest in research and development
Dr. Kitipong stressed several important factors affecting the development of innovation and research and development in private sectors. He said the impetus comes from consumer needs and demands as well as the constant need to improve product quality. Sources of information for innovation and R&D among both customers and affiliates is complemented by cooperation in innovative activities along with R&D into Thai consumer behaviours and supplier needs. A reduction and splintering of risks and costs was accompanied by time management and technologies so that people spend less time on the processes, including creating long-term strategic alliances. “The great obstacles to implementing innovation and research and development among private sectors are lack of qualified personnel, lack of funds, particularly for high-cost innovations, lack of technology information, and lack of market information,” said Dr. Kitipong.
Reforming Thailand or the 21st century
Dr. Kitipong said that STI has prepared three major strategies to support the Ministry of Higher Education, Science, Research and Innovation’s drive to create an innovative economy and prepare Thai people for the 21st century, as follows: 1) public administration reform: integration of research work and training personnel to increase efficiency, 2) regulatory reform: pushing research and innovation to benefit the economy, society and communities and 3) budget reform: allocating a block grant budget and multi-year budget through funding.
Preparation of personnel with expertise to support Thailand’s move ahead is particularly important, hence the development of 3Bs strategy, as follows:
Build
Build the next generation of personnel by teaching new and old skills (upskill/re-skill) to support future industries (S-Curve) in modern manufacturing areas and developing economic structures that enable acquisition of advanced production knowledge. This in turn creates value-added and improves product and service quality (knowledge-based industry). Five groups of engineers are required for 1) biofuel and bio-chemical industries, 2) digital industries, 3) aviation and logistics industry, 4) comprehensive medical industry and 5) industrial robotics for manufacturing. Within the next five years (2019-2023), the private sector will need 107,045 personnel with advanced skills in these areas. We will need approximately 34,505 data scientists and full-stack developers for the industrial robotics industry alone. We also need 12,816 data scientists, robotic control engineers, mechanical engineers and etc.
Buy
The government should consider using financial incentives to attract people with master’s or post-doctoral degrees to work in the public sector. This is synonymous with how large private organisations operate. The “buy” method includes promoting private companies to buy or acquire world-class research centres and laboratories as well as infiltrating the Thai internal work culture which will be another shortcut to accelerating research and development.
Borrow
Exchange and circulate human resources to support personnel dynamics and resolve the current high rate of personnel turnover. This can be achieved by: 1) personnel borrowing between public and private universities 2) private sectors borrowing personnel from various sources with the government sector supporting with incentives and benefits 3) borrowing personnel from foreign countries to transfer technology with direct support from government agencies, including BOI in its role as incentive implementor.
The above outline explains how private and public sectors can cooperate to drive Thailand ahead. This will push the country out of the middle income trap. However, it can only be successful with appropriate implementation of the investment budget for research and development in Thailand. If all goes well, STI predicts that, by 2026, overall investment in research in Thailand will reach 2% of GDP, a significant figure in terms of the country’s outlook for achieving the desired economic growth and development, pushed by government policy.
“If we stick to our strategy, within five years, Thailand will move up to high income status. Within 10 years, we could join the 1st world or developed countries,” said Dr. Kitipong.
