Dr. Krithpaka Boonfueng, the Executive Director of the National Innovation Agency (Public Organisation) or NIA, is taking steps to revitalise the 'Startup Road' and offer clear guidance to Thai entrepreneurs.
After three years of battling COVID-19, we found ourselves in a shutdown situation - no meetings with people, no traveling - and our lives have undergone significant changes. The situation for startup entrepreneurs mirrored this during that period. Thai startups in certain industries, such as tourism (TravelTech) and manufacturing, either stagnated, regressed, or closed down. Simultaneously, some startups experienced rapid growth due to the increasing number of people living online. This trend is particularly evident in the financial industry (FinTech), education (EdTech), and insurance (InsurTech). Meanwhile, against the backdrop of a volatile global economy and a multipolar war, the future for Thai startups remains uncertain. Dr. Krithpaka Boonfueng, the Executive Director of the National Innovation Agency (Public Organisation) or NIA, has explained and pointed out to Thai startups the direction and opportunities on a new path in this article.
"From the past situation, many startups have adapted, such as Bellugg, a luggage delivery service that switched to handling logistics, or an application like QueQ, which was originally for restaurant reservations but transformed into an application for booking vaccination queues to reduce congestion. As you can see, startups have the advantage of being adaptable, sensitive to change, flexible, and agile. Therefore, if a startup has survived since three years ago, it will not be in a worse position than this. It will only be at a point of growth or expansion."
NIA's Disclosure of SME and Startup Support Policy with Details
The national policy to promote startups can be categorised into five areas, including the target industries that NIA will support from 2024 onwards, with one of them being soft power.
Agriculture, Food, and Herb Industry
NIA aims to encourage farmers to "Do less, Get more" by using technology and innovation to assist in crop planning or by employing innovation in the production process to enhance output quality control. With an effective approach, it will lead to improved livelihoods for farmers and may also support the "From Farm to Market" business model, allowing farmers to sell agricultural products and food through applications or platforms like AgTech, FoodTech, and e-Marketplace. However, the El Niño phenomenon and the impacts of climate change significantly affect the supply and production processes, directly impacting the food business. Consequently, NIA is actively promoting agricultural and food technologies to strengthen food security for both domestic consumption and future exports.
Health and Medicine Industry
The COVID situation presents an opportunity for Thai people to embrace online systems such as MedTech or HealthTech, enabling online doctor visits through Telemedicine. This is a crucial health technology and innovation that Thai entrepreneurs can utilise to assist the elderly in Thai society, given Thailand's entry into an aging society. It is also used to help reduce disparities in access to medical care for individuals in remote areas, expand services globally to assist the world's population, and generate income for the country.
Energy, Environmental, and Electric Vehicles Industry
This sector responds to the current global situation, encompassing the use of electric vehicles (EVs) and the reduction of carbon emissions—issues that Thai entrepreneurs must adapt to and adjust their businesses accordingly. NIA encourages Thai startups to develop energy products or services and promote their exportation. Currently, if goods with environmentally unfriendly production processes are to be exported to Europe, entrepreneurs may face trade barriers (CBAM) and be unable to export such goods. Therefore, NIA, in collaboration with NSTDA, Beacon Venture, KBANK, and related private entities, jointly promotes products falling under the categories of Energy Tech and Climate Tech.
Tourism Industry
Thailand must employ innovation to attract funds from foreign tourists. For example, this can be achieved through the development of applications meeting the needs of tourists and the use of AR/VR technology to guide tourists on activities and destinations within Thailand. Additionally, modern tourists prefer to research a country before traveling to it. Thus, if there is innovation ready to meet the needs of the travel industry, such as TravelTech in the form of an application, it will enhance Thailand's image as a more innovative nation in the eyes of foreigners.
Soft Power Industry
Regarding soft power, Dr. Krithpaka clearly stated that this aligns with the government's policy, which requires support from the three main sectors: the private sector, the government, and the community. Collaboration among these three sectors is essential.
"For the private sector, we see that many private entities have significant potential. They view soft power development as a product aiming for overseas sales. In the government sector, it is imperative for the government to assist communities and individuals in developing products that align with their needs. In this regard, NIA has mechanisms ranging from grants, primarily focused on 'social innovation,' to funding for those with community goods to enhance products for international export. This is crucial for transforming local products into global commodities.
"The most important aspect is the community sector, where the essence of soft power resides. This dimension requires our primary focus to identify and promote outstanding products created by individuals and communities. When it comes to social innovation, we support community enterprises at the grassroots level, highlighting their strengths. However, our goal is not to make them all the same. If they are all the same, we cannot create an identity in each area."
Dr. Krithpaka provided the example of the Manohra costume, which is the intellectual heritage of the South. If you want to buy a Manohra costume as a souvenir, it may seem too large. There is an entrepreneur participating in the "Nil Mangkorn" project who applied for funding to create a selling point by utilising the unique identities of the Manohra costume to make earrings, pendants, necklaces, and bracelets that can be sold because foreigners appreciate them. In the case of a footballer wearing elephant pants, the pants became very popular. Accordingly, NIA aims to have influencers promote innovative community products.
In summary, our goal is to have flagship products from each area as the main products to promote soft power, and then distribute them systematically across the country. This approach will have economic and social impacts."
NIA’s Mechanisms for Supporting Startups and Current Government Trends in Supporting Startup Ecosystems
Regarding the mechanisms for supporting Thai startups, there are two types: Type 1 involves financial support, including investments, while Type 2 encompasses non-financial support, such as advising, counselling, and market research.
In the case of financial support, NIA has allocated budgets of 1,500,000 baht and 5 million baht each. Startups with the potential for a 5 million baht investment belong to the Themetics group. Examples of business operators in this group include those in electric vehicles, energy, future food, and sustainable agriculture. These sectors align directly with the government’s policies and respond to NIA's missions.
Another supporting mechanism that many people may have heard or read about in various media is called 3G, which includes Groom – Grant – Growth. This mechanism involves counselling, knowledge transfer, and upskilling to help startups expand and connect to the market. NIA will operate as a ‘Focal Conductor,’ setting the direction for innovation that continues to focus on encouraging startups to grow regionally.
We inquired about the trends in promoting innovation or startups mentioned by Prime Minister Srettha Thavisin. Dr. Krithpaka said, “The Prime Minister clearly stated that the market leads and innovations support. When the market takes a certain direction, innovation must align to support it. This principle applies across various sectors, from production to soft power. Without innovation, progress would be limited.
In addition, NIA focuses on market innovation to facilitate the expansion of products for innovative entrepreneurs. It plays a crucial role in connecting startups with the appropriate markets, whether they are large companies or government markets, ensuring that products become more impactful and useful. Furthermore, there is innovation diplomacy involving discussions with Thai embassies abroad and foreign embassies in Thailand, aimed at supporting innovative products and quality services from Thai entrepreneurs on the international market.
NIA also provides business incubation to students from 48 universities across the country through training, coaching, and demo days to foster the next generation's entrepreneurial skills and spirit.
In terms of the action plan for 2024, NIA will adjust its funding mechanism to provide increased support to products in more markets. Regarding funding, NIA aims to "provide more investment" while also focusing on "using the investment more efficiently." Another crucial development that will transform Thailand's startup ecosystem and serve the national agenda is the Startup Act, which is expected to be enacted next year. Currently, NIA and the Office of the Council of State are working on drafting the Act. One notable aspect of this development is the introduction of more support mechanisms through multilateral collaboration. They are consolidating efforts under a single system to ensure transparency, allowing all parties to track contributions to startups, funds received, and identified barriers. NIA will actively participate in resolving startup-related challenges.
“VCs and CVCs have continued to invest but are becoming more selective about where they invest. Therefore, when they become more selective, they rarely invest in small businesses and choose to do so where it is going to have an impact. It becomes our job to help small businesses, and it is time for the government to take risks,” Dr. Krithpaka added.
The full name of the Startup Act mentioned by Dr. Krithpaka is the National Startup Promotion Act.
Opportunities for Startups and SMEs Amidst EV and AI Competition
In the growing competition within the electric vehicle (EV) and artificial intelligence (AI) sectors, Thai startups and SMEs can find strategic opportunities:
1. EV Industry: While Thailand may not be able to manufacture entire cars, there are numerous opportunities for startups and SMEs in the EV value chain. Entrepreneurs can explore areas like manufacturing charging docks, charging stations, or developing innovative technologies for faster and more efficient EV charging. Overseas startups have shown success in producing advanced charging stations, and Thai businesses can aim to contribute in similar ways. The potential for startups to grow into unicorns is significant in this sector, and the National Innovation Agency (NIA) actively promotes engagement in these areas.
2. AI Industry: Developing AI, especially in fields like medicine, holds significant promise. Startups working on AI solutions, particularly those addressing healthcare challenges, are likely to be eligible for support and funding, including thematic funds. The healthcare sector presents a particularly compelling opportunity as AI can greatly enhance medical diagnostics, treatment, and healthcare delivery.
Examples of Success Stories:
- QueQ: QueQ, a startup that offers booking services, has been supported by NIA since its early stages. QueQ's success includes initiatives like facilitating vaccine appointments, demonstrating the crucial role that startups can play in addressing societal needs.
- Baiya: Baiya is a vaccine development company associated with Chulalongkorn University, showcasing the potential for collaboration between academia and startups. This highlights opportunities for research-driven startups in healthcare.
- MyCloudFulfillment: This cloud service provider startup received funding from NIA. These success stories serve as models for other entrepreneurs and demonstrate the positive impact of NIA's support.
Dr. Krithpaka emphasises that these success stories are a source of pride for NIA, and these startups have become integral parts of the Thai startup ecosystem.
In conclusion, NIA, despite its limited government budget, is actively working with organisations like depa to streamline mechanisms and reduce redundancy in supporting startups. Entrepreneurs interested in seeking advice or investment, especially in the EV and energy sectors, are encouraged to reach out to NIA directly. The agency is committed to fostering innovation and supporting startups in their growth journey within these competitive industries.