Thailand Urged to Foster New Innovation-Led Growth Model
The Thailand Country Private Sector Diagnostic (CPSD) report, by the IFC and the World Bank, says the country needs to foster a new innovation-led growth model while addressing existing investment constraints to create better jobs and achieve its goal of becoming a high-income country.
"With COVID-19, digital and disruptive technologies have been key in keeping businesses afloat," said Arkhom Termpittayapaisith, Finance Minister of Thailand, in a press release on Thursday.
"The adoption and expansion of these approaches can help Thailand harness the market power of global megatrends, such as automation and economic decarbonization, propelling Thailand to move to higher value added domestic and global value chains," the Minister added.
Going forward, the report finds, accelerating the adoption of digital technology can bring in an estimated additional capital flow of $1.8 billion to Thailand annually. Most of it would come from new investments in mobility tech, big data and analytics, health tech, digital media, and entertainment, and from the expansion of sectors where Thailand is already well-positioned among regional peers, including e-commerce, fintech, and others.
"While investing in market enabling infrastructure, Thailand needs to build skills for the future," said Birgit Hansl, World Bank Country Manager for Thailand.
"We need to equip young people to become the next generation of coders, digital creators, and tech entrepreneurs to drive Thailand’s resilient, sustainable, and inclusive growth path," the official added.
The report further finds the adoption of a circular economy can generate cost savings and additional revenue—of as much as $1.6 billion—for the private sector, especially in traditional sectors such as food and agriculture, construction, and electronics. Also, Thailand could explore a range of areas including regenerative farming, organic waste products, and others, for high-impact circular economy opportunities.
The report highlights that strengthening structural reform implementation will help create an enabling environment for businesses, promote investments in digital innovation and circular technology. Building on existing analysis and extensive consultations, accelerated reforms are urgently needed in the following areas: promoting market competition, removing restrictions to foreign direct investments, enabling access to innovation finance, and expanding skills for the future.
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