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First Person: Thailand Poised to Attract High-Tech and Knowledge-Based Industry

Area Development’s editor recently posed some questions to the director of Thailand’s Board of Investment in New York, Supisara Chomparn, about the country’s economic growth and business attraction efforts.

March 2013
AD: The World Bank has called Thailand “one of the great development success stories.” Can you explain why this is so?

Chomparn: Since the Asian crisis in 1997, the Thai economy has grown at an average of 5 percent per year in the period of 2002–2007. The poverty level has been falling steadily from its peak of 21 percent (a result of the 1997 crisis), to about 8 percent in 2009. And, even though Thailand faced the global financial crisis in 2008 and political unrest, the Thai economy has not been affected. The GDP growth forecast is projected to be 5 percent in 2013.

How does the economy of Thailand compare to its neighbors in Southeast Asia?

Chomparn: Thailand’s location at the heart of Southeast Asia has been key to the development of its economy. Many ASEAN economies are on the rise; however, Thailand’s position as the gateway into the region gives the country an edge over its neighbors. With control of the only land route in Asia to Malaysia and Singapore and six deep sea ports, Thailand offers easy access to Asia’s almost four billion consumers with the fastest spending power growth in the world.

Which industrial sectors is Thailand targeting for growth?

Chomparn: Thailand is working to implement a new investment promotion strategy that will focus on industrial restructuring toward knowledge-based or high-technology industries. Companies that place emphasis on research and development, human resource training, and environmental protection will receive additional incentives from the BOI. We hope that this strategy will help push for Thailand’s development as a leading production base in the world.

I understand Honda plans to open a plant in Thailand and Toyota already has a large presence there. Explain Thailand’s success in the auto industry, in particular. What has attracted automotive manufacturers and parts suppliers?

Chomparn: Auto companies and their suppliers have looked to Thailand as a hub for the Asian markets for many years now. Today, Thailand hosts over 1,800 suppliers and has the largest vehicle assembling capacity in Southeast Asia. Our long history in the auto industry has created a well-developed infrastructure and knowledgeable work force that continues to attract many of the world’s leading companies such as Toyota, Honda, BMW, GM, and Ford.

Thailand ships vehicles to over 130 countries around the world and is the world’s largest producer of one-ton pickup trucks. On average, auto companies invest over $1 billion each year in order to produce around 1.6 million vehicles annually. Japan’s continued and increasing investment in the Thai auto industry, even after the devastating floods of 2011, has greatly contributed to our success and growth in recent years. According to the Japan Automobile Manufacturers Association, the quality of automotive parts in Thailand is the highest among ASEAN countries.

How are Thailand’s electronics and textiles industries faring?

Chomparn: Thailand is the world leader in hard disk drive production and a leading manufacturer in the integrated circuits and semiconductors industries. The country is home to one of the largest assembly bases in Southeast Asia. Currently, over 400,000 people are employed in Thailand’s electrical and electronics industry. This well-qualified but affordable work force is a considerable attraction for many investors. Advancing the competitiveness and technical capabilities of the work force continues to be a focus of the government. In addition, Thailand is ASEAN’s largest production base in the electrical appliances sector, and is the world’s second-largest producer of air-conditioning units and the fourth largest for refrigerators.

What led IBM to decide to establish its Southeast Asia data analytics center in Thailand?

Chomparn: I think there are two main reasons why IBM chose Thailand: IBM is confident in the capability of the Thai people and the business environment of Thailand. IBM has in fact done business in Thailand since 1952 and played a major role in delivering solutions to all types of Thai businesses through its state-of-the-art technologies. The company is also involved in developing local capability through a strong network of business partners.

IBM opened its first branch in 2010 in Chiang Mai to serve as a service center for clients and business partners in the northern region. It will also have full-time IBM staff to provide integrated solutions — including hardware, software, and services — under the concept of an "IT Clinic." In August 2012, the fourth location in Chon Buri province expanded its presence in the booming industrial areas of the Eastern Seaboard ahead of the ASEAN Economic Community in 2015.

Through its network and strong connection with its customers, IBM’s new business innovation analytics center in Thailand will not only will provide enterprise analytics software to the company’s customers in Thailand and Southeast Asia, but it also will train people in data analytics to meet demand in the growing ASEAN market.

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