Thailand lagging behind in skills and digital know-how: NESDC
Low level of literacy and digital skills among both youth and the workforce likely to have serious economic impacts in the future
The National Economic and Social Development Council (NESDC) has expressed concern that the skills and readiness of youth and the working-age population are well below international standards, which will almost certainly impact the economy in the long term.
The NESDC’s secretary-general Danucha Pichayanan was speaking after a survey showed that 64.7% have literacy skills below the standard, and 74.1% have substandard digital skills. This indicates that a significant portion of the youth and working-age population cannot perform basic reading and computer tasks effectively.
Data from We Are Social ranks Thailand 39th out of 63 countries in digital skills, despite high daily internet usage. This lack of skills could result in an economic loss of up to 3.3 trillion baht per year due to low labour productivity, limited innovation, and reduced foreign investment.
This situation is particularly concerning when combined with the issue of low birth rates, which will decrease the number of capable workers in the future.
"This underscores the urgent need for Thailand to seriously enhance the skills of its population to compensate for the shrinking workforce and support the transition to a high-value economy and industry," Danucha said.
Recently released statistics reveal that in the first quarter of 2024, the number of employed persons was 39.6 million, a slight decrease of 0.1% compared to the same period the previous year. This was due to a decline of more than 5.7% in agricultural employment during the off-season.
Meanwhile, non-agricultural employment grew by 2.2%, with the hotel and restaurant sector continuing to expand by 10.6% due to the influx of over 9.3 million international tourists. Similarly, the construction sector grew by more than 5%.
Wages in the private sector increased by 0.5% from the previous year, averaging 13,789 baht per person per month. While this is partly due to the minimum wage increase on January 1, the overall average wage slightly decreased by 0.4% to 15,052 baht per person per month.
Unemployment numbers remained stable, the statistics show, with the unemployment rate in the first quarter of 2024 at 1.01%, or 410,000 unemployed persons, a decrease of 3.2% from the same quarter in 2023.
This improvement was due to a reduction in unemployment among university graduates with work experience.
However, new graduates aged 20 to 24 are still having problems in finding jobs and currently make up the largest proportion of the unemployed.
Danucha also addressed concerns about the sustainability of the Social Security Fund, pointing out that like in other countries around the world, the fund is facing the challenge of paying pensions to a rapidly increasing number of retirees even as the number of new workers contributing to the fund declines. By 2032, the number of retirees claiming old-age benefits could reach 2.3 million, up from just 760,000 in 2022.
As an illustration, he quoted the findings of a NESDC study on Thailand's social protection budget in 2023, which showed that the ratio of expenditure to revenue as 34.6% 2013 had increased to 73.4% by 2021.
"This poses a risk to the fund's liquidity and sustainability, which could affect the future benefits for insured individuals,” Danucha said.
