Measures to boost the digital economy explained

Thailand’s digital economy is expected to reach US$53 billion in 2025 with a 15-per-cent compound annual growth rate and is projected to double to approximately $100 billion to $165 billion in 2030, according to the e-Conomy SEA Report 2022, published by Google, global investment company Temasek and management consulting firm Bain & Company.

In a bid to become the digital hub of the ASEAN region, Thailand has implemented a plan to develop a digital government by  2027, aiming to facilitate access to services, reduce inequality, boost the business sector’s competitiveness and ensure transparency.

The plan focuses on four strategies — driving the government towards digital transformation, streamlining government services, facilitating the business sector’s operations, and promoting people’s participation in the transition.

“Thailand has high potential for digital transformation because the most important thing in the digital economy world is human resources,” the company CEO Pochara Arayakarnkul said. “Thailand also gained positive sentiment from people’s openness to digital solutions, such as payment via e-commerce platforms and electronic banking platforms. This shows that Thailand did not oppose digital transformation,” he added

Pochara outlined the challenges that he sees affecting Thailand’s digital transformation.

Difficulty in implementing new innovation: Big companies who have sufficient funds gain an advantage in implementation to boost their business value. However, small firms like startups and small and medium enterprises (SMEs) are facing difficulty in the implementation, especially those with traditional business operations.

The solution does not result in merger and acquisition alone, however. He said large and small companies could form a partnership to boost the growth of their digital ecosystem together.

“Small companies would not be able to compete If large companies launch digital platforms against them,” he explained, “Small companies should collaborate with large companies to boost platforms’ value.”

Pochara advised building communities to enable businesses to support each other on digital transformation. Silicon Valley in the US allows technology companies to access government incentives and a network for knowledge exchange, he explained.

He pointed out that Thailand’s digital communities are not very strong due to unclear direction on digital transformation and incentives to attract digital talents abroad. Some Thai digital talents work as executives or experts in leading technology companies abroad, he added.

He confirmed that building communities will help boost the country’s digital transformation growth and mitigate digital implementation difficulty among small companies.

Lack of digital infrastructure: Pochara said digital infrastructure like data centres and digital connectivity is necessary to facilitate the business sector on digital transformation.

He said several tech companies’ planned move to set up their regional data centre in Thailand will facilitate business operators in the country to gain maximum benefits from cloud services and reduce business operation cost.

To ensure the efficiency in Thailand’s digital economy development, US-based technology giant Microsoft announced its commitment to build new cloud and artificial intelligence (AI) infrastructure in the country in early May.

A new data centre region in Thailand will follow growing demand for cloud computing services in the country from enterprises, local businesses and public sector organisations, the company’s chairman and CEO Satya Nadella said during his speech at the Queen Sirikit National Convention Centre in Bangkok.

Lack of digital literacy: Even though Thailand has many digital talents, Pochara noted that the number of people with digital skills is still low compared with the country’s population. He said some countries like Vietnam produce a significant number of people with digital skills. 

Education institutions should play an important role in boosting digital skills among people, he added, confirming that people who can use AI have productivity higher than people who cannot.

“If everyone has digital literacy, it means the country’s productivity will increase, the economy will expand, and we could build innovations to compete against others,” he said.

He advised educational institutions to collaborate with government and private agencies on digital literacy development, so they can produce human resources to meet the labour market demand.

Today, educational institutions should adapt to producing human resources for industries, he added.

Lack of legal frameworks: Pochara said Thailand should launch regulations that are suitable to its context to ensure smooth digital transformation and protect consumers’ benefits but noted that generative AI could offer results that violate others' intellectual properties. Too strict regulations could trigger difficulty in digital solution experiments, he added.

“What we should do is develop technology and regulations together. For instance, if technology comes out, regulations should follow,” he said.

To tackle human-related issues, the Digital Economy and Society Ministry has planned to attract digital talent through the global digital talent visa programme, producing 50,000 digital personnel, and deploying volunteers who have digital literacy to create awareness among people.

This one-year visa will allow foreigners who are experts in the technology and/or digital fields to stay or work in Thailand without applying for a work permit. Initially, those who graduated in technology and/or digital fields, as well as digital nomads will be eligible to apply for this visa.

The ministry has also planned to adopt AI to deal with online scams, such as launching notifications to warn mobile users at risk of cybercrimes.

“The ministry is accelerating digital transformation in every aspect, from infrastructure development, boosting the government’s potential on providing services, accelerating adoption of technologies and smart solutions to creating awareness among stakeholders in society,” said Minister Prasert Jantararuangtong. 

According to the World Digital Competitiveness Ranking 2023 by the Institute for Management Development, Thailand's ranking climbed five spots to 35th out of 64 economies.

The US topped last year’s ranking, followed by Netherlands, Singapore, Denmark, Switzerland, South Korea, Sweden, Finland, Taiwan and Hong Kong.