How Thais can reap more Alibaba investment benefits
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How Thais can reap more Alibaba investment benefits

Jack Ma of Alibaba. To become an e-commerce and digital hub, Thailand must build a highly-skilled digital workforce. (Photo via University of the Thai Chamber of Commerce)
Jack Ma of Alibaba. To become an e-commerce and digital hub, Thailand must build a highly-skilled digital workforce. (Photo via University of the Thai Chamber of Commerce)

Alibaba's planned investment in Thailand has made the country more attractive as a Southeast Asia e-commerce and digital hub.

Last month, Alibaba Group, one of the world's largest e-commerce businesses, announced that it would invest in a "smart digital hub" in Thailand's Eastern Economic Corridor (EEC) and cooperate with the Thai government to develop a digital industry and digital skills for Thai people.

However, to become a real regional e-commerce and digital hub and reap the full benefits from such an investment, Thailand faces one big challenge -- building a highly skilled digital workforce. Are we ready for this?

Saowaruj Rattanakhamfu, PhD, is Senior Research Fellow at the Thailand Development Research Institute. Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.

Certainly, Alibaba has committed to help Thailand develop its digital workforce, including 100 e-commerce lecturers, 30,000 e-commerce-ready small- and medium-sized enterprises (SMEs), and 10 start-ups. But we also need to put in a good effort ourselves.

Last year, Thailand produced nearly 20,000 graduates in computer-related subjects, including computer engineering, computer science, information systems, information technology and software engineering. At the same time, there were 7,000 computer-related graduates, including those who graduated in previous years, who were unemployed. Meanwhile, the business sector complained about a lack of people in these fields. How could that be? Surely, the problems were a result of a skills mismatch and the low quality of graduates.

One cause of the skills mismatch and low quality of graduates is the out-of-date curricula which means we are unable to catch up with rapid technological changes, such as cloud computing and internet of things (IoT). Many do not even contain enough essential IT content, such as information management, system paradigms, integrated systems technology and user experience design for IT professionals. Consequently, many graduates have skills that do not meet industry demands.

As a result, digital businesses are reluctant to invest in high value-added activities in Thailand. For example, Alibaba, the Chinese e-commerce giant, will use the country as a base for distributing products to neighbouring countries but will set up a research centre to develop artificial intelligence (AI) applications in Singapore.

If Thailand wants to reap greater benefits from such global players, the Thai government should focus on producing a high-quality digital workforce that meets business demand, rather than focusing on the quantity of graduates. To achieve this goal, it must be serious about implementing effective short-, medium- and long-term improvements simultaneously.

In the short- and medium-term, Thailand needs to produce three types of digital workers.

The first are those who can develop and apply critical technologies such as AI, big data and IoT. Many countries, including Taiwan and Singapore, organise six-month intensive courses on such technologies that use actual data to solve real-world problems. In these countries, all courses have a common focus: quality, not quantity.

The second covers a larger part of the digital workforce, such as software developers and programmers, who are in great demand. Again, quality needs to meet industry requirements. Therefore, a close working relationship between educational institutions and the private sector is essential. South Korea's ICT Model Schools programme is a good example. Educational institutions can join this programme only if they partner with the business sector and meet stringent requirements on curricula and research facilities. They are also evaluated annually and dropped from the programme if their results are not good enough.

Thailand should certainly strengthen the linkage between its educational institutions and the private sector to develop its workforce. Like South Korea, it should also promote the accountability of its educational institutions. In the Thai case, internationally accepted examinations, such as the Information Technology Professional Examination, should be adopted pervasively.

The last group to focus on is highly skilled foreign digital workers as they can address Thailand's talent shortage immediately. In this case, Singapore, Australia, and the United States provide good examples of how it can be done.

Earlier this year, Thailand introduced a "Smart Visa" scheme to attract foreign talent in targeted industries, including the digital industry. Although this policy is a move in the right direction, it is still not easy to use as it requires a minimum salary of 200,000 baht per month for a professional seeking a four-year visa. This high salary scale discourages many companies from recruiting foreign talent. The government should relax the requirements, for example, by also allowing a person with salary of between 100,000-200,000 baht per month to apply for a two-year visa.

In the long run, Thailand's focus should be on improving the quality of its education institutions. This requires a mechanism for educational institutions to understand the needs of businesses and allow them to jointly train future workforces. Good practices in this area can be found in Japan's famous KOSEN (Colleges of Technology) and South Korea's Nurturing Excellent Engineers in Information Technology.

To sum up, Thailand has to upgrade its digital workforce to reap more benefits from investment by global players. This requires an adjustment in three dimensions: focusing on quality rather than quantity, introducing accountability into education and training systems, and close cooperation between education institutes, the government and the private sector.

Saowaruj Rattanakhamfu

Research Director for Innovation Policy for Sustainable Development

Saowaruj Rattanakhamfu, PhD, is Research Director for Innovation Policy for Sustainable Development at the Thailand Development Research Institute (TDRI). Policy analyses from TDRI appear in the Bangkok Post on alternate Wednesdays.

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