A walk in the park: Campaigns have been launched to accelerate digitisation

Several factors are driving Thailand’s rapid technological development. On the ground, people are demanding greater connectivity and better applications, while operators are competing actively to provide enhanced services to meet those needs. At the same time, the government is working to support the development of technology. A wide range of well-supported campaigns have been undertaken to accelerate progress.

Some plans have been changed along the way, and efforts are being introduced that are more comprehensive and fundamental to development. They are also well supported by the administration, suggesting that implementation will not be a significant problem.

4.0: Thailand 4.0 is one of the main components of the campaign for a Digital Thailand. Under this programme, the state is working to move from being heavy-industry based to becoming more technologically oriented. The goals are ambitious; the authorities not only want to develop a digital sector, but also hope to transform the entire economy through technological advancement. The ultimate goal is to boost growth back into the 4-5% range, and escape the middle-income trap.

“Thailand needs ICT services to be developed domestically, rather than just being the end-user of foreign-developed technology,” Sak Segkhoonthod, president and CEO of the Electronic Government Agency, told OBG. “Key segments for investment include cloud computing, artificial intelligence, block-chain, big data and the Internet of Things (IoT). All of these fields have wide economic application in the nation, in sectors ranging from transportation to industry,” he added.

The Thailand 4.0 programme is planned to be built around a number of super clusters. These are set to include an electrical appliance, electronic and telecommunications cluster; a digital cluster; an eco-friendly chemicals and plastics cluster; a food innovation centre (Food Innopolis); an aerospace and aviation cluster; a robotics cluster; and, finally, a medical centre.

Support will be provided by the Board of Investment (BOI) in a wide range of areas, including micro-electronics design, embedded software, embedded systems, software for big data, cybersecurity, engineering design, training centres, telecommunications devices, security control equipment, factory automation, the IoT, fintech, agritech, meditech and digital content. The three pillars of the digital economy will be infrastructure, e-business and e-commerce.

A STEP BEYOND: Going beyond the general policy of Thailand 4.0 is the development of Digital Park Thailand. The main site is being planned by state-owned CAT Telecom and will be situated on 600 rai (237 acres) in the Eastern Economic Corridor (EEC). The location is considered ideal, as it currently hosts a satellite earth station and a submarine cable station, and will also be connected to a future high-speed rail line and other transport links. The park will host a university – possibly in cooperation with a foreign institution – a residential area, and space for local and international companies.

The EEC was formally launched in 2016 by the National Social and Economic Development Board (NSEDB). The targeted area, which includes the provinces of Chonburi, Rayong and Chachoengsao, is already a major industrial zone. Under the programme, it will be transformed by various infrastructure, industrial and residential developments. Ports and airports will be upgraded, transportation links improved and a number of industries will be promoted, especially those that are high-tech in nature.

A-LIST: The digital park is still a work in progress, with a launch scheduled for 2017 (followed by international roadshows) and construction expected to begin in 2018. A wide range of target tenants have already been identified and some have been approached. Possible participants include: the Korea Institute for Robot Industry Advancement, Korean research university KAIST, Chinese Academy of Sciences, Tokyo Institute of Technology, Beijing Institute of Technology, Thai Microelectronics Centre, Tsinghua University, Carnegie Mellon University, Chulalongkorn University, Thailand Cyber University, Alibaba, SK Telecom, Hitachi, IBM, Huawei, Intel, Microsoft, NTT, Google, Amazon Web Services, Samsung, Cisco, True Corporation, TOT and DTAC. The model is taking a holistic, cooperative and comprehensive approach to development, with academia, industry, government and smaller, more entrepreneurial ventures working together.

THE INCENTIVES: What really sets the park apart is the potential scope and depth of the incentives. While the BOI is supporting Thailand 4.0, it is expected that the park will offer additional enticements to attract tenants. Packages will include not only tax relief, but also work visas and work permits for international employees of companies operating from the park.

Importantly, the park will be able to customise incentives to the needs of companies. This sort of fine-tuning is not available from the BOI, which must offer the same standard package to everyone. In a sense, the site will act as a special economic zone where regulations can be adjusted to support sector growth.

Even matters such as spectrum usage could be flexible, allowing companies to begin services on frequencies without having to wait for approvals or auctions from the National Broadcasting and Telecommunications Commission. “The government will offer customised investment incentives,” said Dhanant Subhadrabandhu, executive vice-president of CAT Telecom. “The BOI cannot give a customised investment package. We are not just putting the tenants together. We are giving them incentives. It will be like a special economic zone, very special.”

HIGH DEMAND: CAT Telecom argues that demand for the park will be high as Thailand is now the centre of internet traffic in the region. Singapore is currently seen as being a hub for servers and start-ups. Thailand has been less attractive because Thai law makes it difficult to establish companies and employ non-locals, while taxes can be high and complex. A zone where most of these burdens could be addressed would in theory attract companies, individuals and institutions interested in being closer to the customers and users.

Another key factor that would draw people and companies is lifestyle. Many people working elsewhere in the region would rather work in Thailand, but due to the relative complexities of Thai law and administration, they are compelled to operate in other jurisdictions. If enough of these people can be enticed to the domestic market, a critical mass could develop in the country.

The sights have been set high. Thailand hopes not only to catch up with the other markets in the region, but to become the preferred location for tech companies that are working in ASEAN. “We want to make that area the digital hub of Thailand and further aim to play an important role in building innovative communities in the region, especially in the ASEAN Economic Community,” Dhanant said.

Manabu Kahara, president at NTT Communications (Thailand), told OBG, “In South-east Asia, while Singapore has a crucial position in terms of logistics, Thailand can capitalise on its central geographic location with data routing as the global economy shifts online. Thailand has already begun its upswing in achieving a digital transformation, both in the public and private sectors, and demand for services such data centres, cloud computing and advanced network services will remain strong in the medium term.”

GIVE & TAKE: The process for becoming a technological centre is seen as being a two-way street. While Thailand will offer incentives that create the right environment, the country is expecting that international companies and institutions will bring the technology and skills that will help contribute to the country’s competitive environment. It is hoped that the upcoming digital parks will provide a space for active engagement between the various players, local and international.

SMART CITIES: CAT Telecom is also involved in the building of smart cities, and is teaming up with SK Telecom to execute the relevant plans. SK Telecom previously became the first to commercialise a nationwide IoT network in 2016. As a result of this collaboration, CAT Telecom will launch the first IoT network in Thailand in July 2017, with pilots taking place in central Bangkok and across Phuket Province. Smart services will start with vehicle tracking and then expand to include smart metering and smart street lights. Phuket was the first city to begin the process of implementing an IoT network, while Chiang Mai and Khon Kaen will be next. A proper IoT platform is considered essential for achieving the goals of Thailand 4.0, though it is seen as being a challenge to implement. “The most important thing is the data. It is not just the infrastructure. The data is important,” said Dhanant.

The world is littered with special tech zones that have failed to take off. Some projects turn out to be less popular than predicted, while others become real estate plays with technology branding. While it is not easy to maintain focus and incentivise partners, when done properly, a tech park can provide big benefits.