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Thailand’s Digital Economy Progressing Remarkably

Thailand’s digital economy has achieved remarkable progress in it transformation during the last decade.

A number of digital infrastructure and accessibility indices have improved for wide sectors of the population. Thailand’s e-commerce business is one of the fastest growing in Southeast Asia, with gross online merchandise value increasing by 68% in 2021 and predicted to rise by 14% between 2021 and 2025.

The Thai government, like other countries, has prioritized  Thailand’s digital economy, especially through its industrial transformation program (Thailand 4.0) and the construction of a digital park in the Eastern Economic Corridor (EEC).

In 2017, the government also announced additional investment incentives to entice investors into tech-related businesses, as well as a 20-year National Master Plan for Digital Development (2018–2037). Several laws have been enacted in recent years to facilitate, protect, and safeguard the digital environment for both consumers and digital providers.

Thailand’s Digital Economy Progressing Remarkably

While Thailand has achieved tremendous progress in digital development, it is hampered by low and concentrated private investment, a lack of sophisticated information and communications technology (ICT) skills, poor growth in digital infrastructure, and financial restrictions. In 2019, private investment in Thailand’s digital economy accounted for barely 4% of GDP.

Digital technology has become increasingly widely used in the services industry, such as online wholesale and retail commerce, internet services and mobile phone, and financial services. Its use in agriculture and manufacturing has been restricted.

Private investment has been more dominant in the EEC, with the percentage of investment more than doubling from roughly 30% to 60% between 2017 and 2020. Several infrastructural projects, particularly those connecting the EEC to other regions of Thailand, have been postponed. A clear plan for 5G deployment has yet to be published.

Limited budget allocations across a variety of government departments are also an issue, notably for the Ministry of Digital Economy and Society, the Ministry of Education, and the Ministry of Higher Education, Science, Research, and Technology, which get very little and diminishing amounts.

Policy overlaps and shortcomings in cooperation across government entities in digital policymaking add to concerns about the digital future. Government agencies, for example, are implementing initiatives to increase labor skills, but not in a coordinated manner.

Thailand’s digital economy and digital future under question

Thailand’s progress toward a digital future is being questioned, particularly due to a shortage of human capital and insufficient and unevenly dispersed digital infrastructure. In 2020, approximately 1% of the population possessed advanced ICT abilities, while around 20% possessed basic ICT skills. In rural regions, just 69% of households have internet connectivity, whereas 81% had in metropolitan areas.

In Thailand, the costs of fixed broadband, mobile broadband, and mobile cellular services have all decreased significantly over the last decade. However, in terms of purchasing power parity, Thailand’s ICT prices remain significantly higher than those of China, Malaysia, and Vietnam.

To encourage investment and develop Thailand’s digital economy, tech-based incentives that reward actions using technology and innovation regardless of geography are a better method than location-based incentives. Too much emphasis on one location, such as the EEC, while paying less attention to others, has the potential to reduce productivity growth and exacerbate wealth disparity. Infrastructure development must be accelerated in order to ensure that the country has effective logistical systems as well as inexpensive and dependable digital technology.

Thailand’s Digital Economy Progressing Remarkably

Plans for digital transformation must be reinforced, especially in terms of policy coherence and policy cooperation among government departments.

The Ministry of Digital Economy and Society might play an active role in coordinating digital transformation plans across institutions in order to minimize policy overlap and policy coordination and enforcement failures.

Appropriate budgetary resources for promoting physical and soft digital infrastructure must be prioritized. With the economy’s growing digitalization, existing laws and regulations must be continuously examined and modernized to accommodate public concerns. In order to promote business in the region and safeguard customers from both privacy and security concerns, regional cooperation in regulatory compatibility must be strengthened.

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