The Government in Thailand is making real strides in bringing advanced technologies to industry in Thailand. As the name may suggest, Thailand 4.0 is about innovation, business growth and economic growth and the Thai government has focused on five industrial sectors in which to powerhouse this new progressive thought.
Why is Thailand 4.0 being introduced now?
Thailand 4.0 marks the 4th phase of the government’s project of creating a society whereby everyone is more equal and industry not only takes advantage of global technological advances but sets the bar in the future.
Up to now the three phases before Thailand 4.0 have been:
Thailand 1.0: the emphasis here was focussed on streamlining the agricultural sector.
Thailand 2.0: this phase highlighted light industries which ultimately helped upgrade the country economy from lower-wage to middle-wage.
Thailand 3.0: this phase which is still in force is concentrating on enabling the heavier industries to grow
Thailand 4.0 has as its strapline: Smart industry + Smart People + Smart City
The overall goal is to strengthen the Thai economy by shifting the country away from an issue which has become quite a problem in recent years which is the growing disparities caused by the middle-income trap. The aim is to slowly move the country from being a production based economy to a service based economy. The products produced will be less about commodities and more about innovative cutting-edge products which reflect and promote current technology.
According to statistics released by the Thailand business news, the country is now rated within the top 5 unequal companies as far as ownership of wealth is concerned: 1% of the population own 58% of the wealth. The worst country for inequality in this category is Russia, where 1% of the population own 75% of the wealth.
Thailand’s goal is for an inclusive society
Thailand’s goal is for an inclusive society where everyone has access to the rewards of prosperity and development. Initially, Thailand is looking at two phases: (1) those industries which are already offering highly innovative technological products but need enhancement through investment and support – this is in the short term and (2) those industries which need to be developed.
(1) Short term enhancement:
- Next Generation automotive
- Smart Electronics
- Affluent, Medical and wellness Tourism
- Agriculture and biotechnology
- Food for the future
(2) Long term development:
- Robotics (smart devices and mechatronics)
- Aviation and Logistics
- Biofuels and Biochemicals (biomedical)
To encourage businesses within the targeted industries to join in the project, the government is offering tax incentives which it outlined in its National Competitive Enhancement Act. Within the act, businesses can enjoy three distinct benefits:
- Exemption from income tax for qualifying firms for a period of up to 15 years.
- Exemption from tax payment on various areas such as duties on imported machinery and visas and permits which allow foreign experts and craftsmen to work in the country.
- Access to the fund set up to enable qualifying firms. The fund for Enhancement of Competitiveness for Targeted Industries stands at $286 million and can be used for research, innovation or development.
Creating future development in Thailand
The BOI (Board of Investment) was set up to monitor and attract investment to the fund and in order to attract new investment to the fund and encourage overall development to the project, the Thailand Prime Minister Prayut Chan-O-Cha recently presented a 5-pronged policy approach:
- 1. In technology, the aim is to enhance capacity in core industries such as biotechnology, agriculture, food, energy, health related and medicine.
2. There is a need for development in human resources in order to attract talent and skills from abroad.
3. There is a need to develop robust infrastructures on every level (physical, connectivity, intellectual and social infrastructures)
4. Enterprise, entrepreneurs and start-ups need empowerment and given the tools and encouragement to develop.
5. Promoting investment in the named targeted industries and especially in the Eastern Economic Corridor (EEC)
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