The latest survey has recently revealed that Thailand’s gross expenditures on research and development (GERD) in 2021 amounted to THB 195.57 billion, accounting for 1.21% of the country’s GDP. In comparison to the previous year, GERD experienced a decline of 5.98%. While the private sector’s contribution increased from THB 141.706 billion to THB 144.887 billion, the government and non-profit organizations witnessed a decrease from THB 66.304 billion to THB 50.683 billion, resulting in the ratio of R&D expenditures in the private sector to the public sector of 74:26. These figures emphasize the critical role of the industrial sector in Thailand’s economic development.
NXPO President Dr. Kitipong Promwong commented that the GERD/GDP of 1.21% is lower than the projected target of 1.37%. This decline is mainly due to reduced government investment, while the private sector has shown positive growth.
Dr. Kitipong emphasized that if the current trend continues, Thailand will not be able to achieve its original STI targets (GERD/GDP of 1.21%, public/private R&D expenditure ratio of 30:70, and R&D personnel of 30 FTEs per 10,000 people) by 2027. Without any interventions, Thailand’s R&D investment would only reach 1.67% of GDP. To maintain the 2% target, the government must implement measures to boost R&D investment.
These measures should include promoting investment from the public sector, which would require an additional investment of THB 305 billion, or THB 51 billion annually. The investment promotion schemes could be implemented by the Board of Investment (BOI) and various program management units (PMUs) to stimulate private sector investment. In addition, NXPO is in the process of establishing the Office of Research and Innovation for Competitiveness and Area-Based Development (Public Organization), which would contribute to the growth of public sector R&D spending and the overall economy.
Dr. Kitipong stressed the importance of developing technological capabilities and innovation to stimulate research and development investment. Thailand has unique advantages that can create opportunities in emerging industries, particularly future food, electric vehicles (EVs), advanced electronics and climate technology.
Future food is becoming a promising new growth engine, with impressive export growth. Future food cover four categories: 1) functional food and food ingredients for health; 2) novel food such as plant-based protein, insect protein, and cultured meat; 3) organic food; and 4) medicinal food such as food for non-communicable diseases (NCDs) patients. In 2021, the global market value of future food was THB 13 trillion, dominated by organic food (70%) and functional food (10%). Novel food experienced significant growth rates of 30% – 100%. In 2022, Thailand’s future food exports reached a value of THB 128.688 billion, accounting for 9.3% of the total food exports with a 7.8 annual growth during the pandemic. Future food exports is predicted to reach THB 260 billion in the next three years.
R&D investment in the EV sector is anticipated to rise for various reasons. These include the increasing demand for electric cars, Thailand’s 30@30 policy targeting 30% EV production by 2030, and the relocation of EV production from China as a consequence of the trade war and disruptions in the supply chain. The government has a crucial role to play in driving Thailand’s EV industry to become a regional hub. This involves attracting domestic and foreign investment in the manufacturing of EVs, e-motorbikes, batteries, battery packs, EV parts and components, as well as autonomous vehicles.
Thailand’s advanced electronics sector can largely benefit from foreign investment which can be boosted by a skilled workforce. Thailand’s workforce development initiatives include the creation of a platform for high-skilled workforce development on manufacturing and service sectors and the launch of higher education sandbox scheme which aims to create new education programs that align with the demands of emerging industries. As an example, Chulalongkorn University, in collaboration with 40 firms, has recently introduced a new engineering course, aiming to produce 1,200 job-ready graduates in computer engineering & digital technology.
Climate technology is an emerging sector that relies on advanced science, technology, and innovation. This sector is gaining significance due to its ability to contribute to the sustainable development goals while also presenting new business opportunities. These opportunities encompass a wide range of areas, including renewable energy, alternative vehicles, clean technology, carbon capture, utilization & storage, as well as circular waste management.
Dr. Kitipong also highlighted additional policies aimed at stimulating R&D investment. These include the IDEs policy which aims to establish one thousand innovation-driven enterprises (IDEs) with a revenue of THB 1 billion, the university holding company measure which intends to increase the number of spinoff companies based on university innovations, the E-Commercial & Innovation Park (ECIP) policy which aims to enhance the manufacturing sector, and Thailand Plus Package that offers tax incentives to enterprises engaged in STEM hiring and workforce upskilling.
In conclusion, Dr. Kitipong put forward the following recommendations to the new government, aiming to boost R&D investment and free Thailand from the middle-income trap: 1) increase public investment in R&D and ensure continued support, while encouraging private sector expenditure on R&D; 2) foster the development of a highly skilled workforce to support the industrial sector; 3) enhance investment in future industries such as climate tech, EVs, and future food; and 4) facilitate the growth of startups and spinoffs through the implementation of the university holding company measure and infrastructure development initiatives.
