WITH the world economy crawling while undergoing fast, drastic as well as disruptive changes, Thailand under the Prayut Chan-o-cha government has come up with a long-term strategic plan called “Thailand 4.0” to deal with such adversity, raising hopes for us to survive in the future.
It is something very new to all of us and as we were pondering what Thailand 4.0 entails, experts gathered on Saturday at the Money Talk seminar to tell us what’s happening, what’s the root cause and what Thailand needed to do.
Thailand 1.0 was used to describe the time when agriculture was the major economic engine while 2.0 focused on light industries and 3.0 on heavy industries and exports. In the 4.0 era, Thailand will focus more on research and development and innovations. It is designed to revamp the economy so as to move out of the middle-income trap.
Teeranun Srihong, Kbank’s Senior Executive Vice President, who is Infrastructure Domain Coordinator and Member of the Risk Management Committee, pointed out that Thailand 4.0 is in response to and in line with Industry 4.0 which is dominated in general by disruptive technological changes.
He cited the wide use of robots, artificial intelligent (AI) as well as new business innovation like Uber as examples. With such disruptive technologies, business and people have to adapt to survive.
He cited Blockbuster which eventually went out of business in five years after it refused to respond to Netflix’s video streaming. The best way to respond to technological change is to be in front of others in making changes. With robots and AI coming, he foresees 70 per cent of Thailand’s work force could be replaced in the future.
Arun Jirachawala, senior financier, painted quite a gloomy world economic situation in the near and medium term. He said while the US economy looks pretty okay as it has now become net oil exporter and enjoys growth from technological innovation like Facebook, Apple and Google, the Eurozone has not been able to solve its problem while the rest of the world could not expect to rely on Japan and China either.
Japan’s situation is getting worse after the sales tax increase while China’s inability to devalue its currency has caused its products to become more expensive while wages have also increased causing its economic growth rate to slow further.
So, that’s going to make life difficult for Thailand as it has not been able to attract new foreign investment for quite some time partly because the Board of Investment’s promotion privileges have become obsolete compared to that of neighboring countries like Vietnam. Consequently the growth engine used by the government at the moment is spending on infrastructural development.
Investment Strategist Wiwan Tharahirunchote, CFP interestingly pointed out that the current world economic slowdown actually stems from aging society in most countries and Thailand is no exception as the country has been very effective for decades in its birth control policy.
That there has been no world war since WWII is another factor leading to the present aging society. In order to survive, we have three choices, namely, by leading the trend, following the trend and staying behind the trend.
Looking at what is going to be the megatrend, they all agreed that aging society related businesses like health care, home care as well as tourism are in the lead.
Mr Teeranun pointed out the economy can grow but with lower employment as things like Uber, driverless taxis and cars, robots and e-commerce will play greater role everywhere citing Instagram having only 17 staff but was sold for one billion US dollars. Medical tech will enable us to live longer. Another industry worth looking at is battery as anyone who comes up with new technology will become a world business leader.
For Thailand, with its strength in service and tourism business, if less employment is required because of disruptive technology, it’s the foreign workers coming to work here who would be affected.
TOP: Industrial robot 3D printer v01 toils at 3D Printshow 2014 in London . Photo: Creative-Tools.com, CC-By-2.0
INSET: A robot band such as this one indicates how quickly the world is changing. Photo: Andrew Lorien, CC-By-2.0
By Kowit Sanandang