Can Thailand Become ASEAN’s Digital Hub?
Thailand’s desire to become the digital innovation hub of ASEAN was championed by the NDESC in 2021
This goal calls for the country to focus on digital transformation and elevate the digital economy. If successful, these would boost Thailand’s economy, improve social well-being and allow for sustainable development. However, the Kingdom is still some ways away from achieving those goals. The good news is that the country does have some notable advantages. These include being the first ASEAN country to launch commercial 5G services and having some of the world’s fastest fixed broadband internet. This has supported growth and advancements in certain digital sectors, such as e-commerce.
“Thailand is excelling in e-commerce and logistics and provides doorstep delivery of most types of products within very short timeframes and at very low delivery costs. This is something way better than in most European countries today,” Mr Jostein Aksnes, Co-Founder and CEO of Thailand-based Seven Peaks Software, said. On the other hand, more work is needed elsewhere. For instance, the public is comfortable with digital payment systems, but a lack of centralisation has created a new set of challenges. “There are a lot of digital payment systems now in Thailand, but sadly no defacto standard, so still no one way to pay for all services,” Mr Aksnes explained. “That means multiple wallets and different forms of payment. Google Pay has not yet been launched in Thailand which would also help streamline payments.”
For Thailand to become ASEAN’s digital innovation hub, the country will need to solve that issue while incorporating digitalisation to eliminate other pain points for startups and SMEs. Mr Aksnes has experienced many of these firsthand during his time at Seven Peaks Software. Since being founded in 2014, the company has built up capabilities in software development, design, and digital transformation consulting. Growth hasn’t always been easy, and he cites a few places where business processes could be simplified. Encouraging bank transfers and moving away from cheques; digitising data stored and shared by government agencies, and providing enhanced data for bank transactions, and allowing for integration with accounting software are some possible improvement areas.
NDESC, short for National Digital Economy and Society Commission is a department under the Ministry of Digital Economy and Society, Thailand (ONDE), has said it is currently creating a plan that would serve as a blueprint for revolutionising government operations, business practices and people’s lifestyles. This is a step in the right direction. However, it has been more than a year since NDESC stated this ambition and nothing concrete has been proposed. It has also been more than two years since then Deputy Prime Minister Somkid Jatusripitak told ONDE to come up with a plan covering the digital transformation of government services with little movement having been made on that front.
Talent and Advantages
While plans for Thailand to improve digitisation and become the digital innovation hub of ASEAN remain up in the air, another challenge has emerged in the form of talent. Competition here is fierce, especially in the technology sector. “For Seven Peaks Software, talent is our core business, and we are investing a lot in building an employer brand to help and attract the best talent. We are, of course, still a small organisation in Thailand, and we are competing for talent with many major enterprises now that everyone is going digital and focusing on building tech capabilities,” Mr Aksnes stated. He continued, “The hiring market is getting more heated. At the moment, it’s the talent’s market, and companies are all fighting for the same talent.”
Despite this, there are reasons to be optimistic. According to Mr Aksnes, access to talent in Thailand is increasing. In addition to this, companies like Seven Peaks enjoy good global hiring opportunities to bring in experts since the country is a very attractive location for expats to work. Another advantage in Thailand’s quest to become the digital innovation hub of ASEAN is the fact the cost of doing business and cost of living are cheaper in the Kingdom than in Singapore. The key will be building on those strengths by supporting startups, SMEs and the business community as a whole through increased digitisation. “Allowing businesses to work digitally, by improving banking, payment, and digitising document handling for the government would make the country more attractive to digital and technology startups and SMEs,” Mr Aksnes said. “A lot has changed over the last eight years and today I would strongly recommend businesses to set up a digital business in Thailand instead of other countries in Southeast Asia.”
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