What Thailand 4.0 Enables in the Digital Space
Thailand 4.0 has the potential to springboard many Thai businesses into the digital age. Several Thai organizations are already well on their way to digital transformation. The challenge will be shifting the entire economic focus of the nation, as well as the focus of its people, towards reaping the full potential of the digital world. If successful, the rewards for Thailand will be myriad and long-lasting. The present push towards next-generation industrial output is a crucial factor in joining the community of wealthy nations with digitalized economies.
What is Thailand 4.0?
Thailand 1.0 was the introduction of the agricultural economy. Thailand 2.0 brought about the advent of light industry. Thailand 3.0 – where most of the country’s economy is currently situated – is advanced industry. The Thailand 4.0 economic model seeks to implement an innovative, value-based industrial model that integrates social and environmental well-being inside its vision for prosperity. Its over-arching aim is to transform Thailand into a high-income country with an entirely digitized economy, led by fully digitalized organizations.
It’s important to note that there is a significant difference between ‘digitization’ and ‘digitalization.’ While digitization denotes the process of transferring all physical data, be it analog or paper, to digital means, digitalization entails fully integrating the data into every aspect of a business, which in turn allows for full digital transformation. This trajectory often includes robot process automation, cloud-based technologies, artificial intelligence, and the Internet of Things incorporated at an organization-wide level.
Under the 4.0 model, 10 industries will be targeted for development over a 20-year period. Five of these industries are already established, while the remaining five are advanced industries that will be built up to bolster the economy. The established industries are automotive, intelligent electronics, agriculture and biotechnology, food processing, and high-wealth and medical tourism. The additional five industries that are intended to be the alternative force for the future Thai economy are: digital software, robotics, aviation and logistics, comprehensive healthcare, and biofuel and biochemical industries.
The goal is for Thailand 4.0 to transform the current economy, which relies heavily on manufacturing products that have been designed elsewhere, to one that fosters the creativity, research, and development needed to develop advanced technologies from within Thailand. On top of the straightforward economic advantages of digital adoption, an important added benefit is that these technologies will be greener and more sustainable.
Is Thailand ready?
While Thailand is obviously not one of the world’s most technologically advanced nations, there’s no question that its people have embraced the digital age. In fact, with an average of 9 hours and 11 minutes spent online every day, Thais are actually the world’s most prolific internet users. Although this bodes well for Thailand’s digital future, pervasive internet use is not the same as widespread digital innovation.
The Thai government has stated that “the most important element in the development of Thailand 4.0 is Thai people.” The economic model has the avowed goal of transforming Thais into “more competent human beings” by reforming the education system, as well as changing curriculums and teaching methods to foster a better learning ecosystem. The nation has a long way to go to achieve this objective, as Thailand consistently scores low in education. In the most recent global school ranking by the Organization of Economic Co-operation and Development (OECD), Thailand ranked 47th among the 76 countries surveyed.
The government will also set up skills development programs to prepare people for the jobs of the digital age. Skill development will be essential to the success of Thailand 4.0, and many challenges must be overcome. One of the key components of Thailand 4.0, the Eastern Economic Corridor (EEC), has already seen the success of its projects threatened due to skilled labor shortages.
Despite the challenges ahead, Thailand 4.0 also presents an enormous opportunity for the country.
Finding the way forward
Thailand’s digital industries are expected to prosper over the coming years. By 2022, 61% of Thailand’s GDP is predicted to be digitalized, due to growth in every industry driven by digital enhancement.
Many Thai organizations have already embraced and integrated advanced digital technologies into their businesses. As we discussed in our previous article, many Thai financial institutions are already using Artificial Intelligence to make the most of the exponentially increasing amounts of data available in the sector. AI can perform many functions in financial services, including trading strategy advice, microloan underwriting, and optimized customer service through chatbots.
According to the 2018 Dell Technologies Digital Transformation Index survey, 96% of Thai businesses “face major impediments to digital transformation.” These include cybersecurity and data privacy concerns, lack of vision and strategy, insufficient expertise, missing technology, and an immature digital culture within organizations.
While this lack of preparedness is undoubtedly cause for concern, the majority of Thai business leaders are aware of the scope of the problem, with 90% of those surveyed reporting they believe digital transformation should be more widespread within their organizations.
As Thailand 4.0 continues to be rolled out, Thai businesses must be prepared for digital adoption. Multi-cloud computing, big data analysis, artificial intelligence, the Internet of Things, and robot process automation all have crucial roles to play in the future digitalization of the Thai economy.
Of course, not all businesses are properly equipped to handle every aspect of digital transformation on their own. It’s a delicate process requiring close coordination of several moving parts. With over 38 years of experience helping organizations transform themselves, ABeam can be your ideal strategic partner. We offer a host of digital services and will support your organization through every step of the process so your business can achieve the full benefits of Thailand 4.0 and sustained prosperity in the digital age.