Throughout the past generation, Thailand’s tiger economy has witnessed exceptional GDP growth, transforming the country from a low-income economy into one of upper-middle income status. Since the Asian Crisis of 1997, Thailand’s GDP has experienced average annual growth north of 4%, nearly double that of the United States. During this time, agriculture’s contribution to GDP has decreased, but the industry and service sectors now account for nearly 90% of the country’s economic value. The industrial sector, comprised of manufacturing as the major segment along with construction, mining, electricity, and others, contributes more than 40% to Thailand’s GDP, a figure which has gradually increased as the agriculture sector has decreased. Additionally, Thailand has implemented import substitution and export promotion policies throughout the past few decades in order to decrease dependence on foreign countries and increase self-sufficiency. Thailand’s service sector, which has been roughly stable over the last half century, includes transportation, wholesale/retail trade, and tourism and accounts for more than 45% of the country’s GDP.
Automation and AI have been at the forefront of this growth, providing crucial advances and efficiencies to industrial systems and services. As the world's second-largest global producer and exporter of hard-disk drives and the world's sixth-largest commercial vehicle producer, Thailand has been using robotics and automation technology throughout the last three decades. Specifically, over the past few years, manufacturers in Thailand have invested heavily in machinery and systems to increase the utilization of automation systems in order to remain competitive in the global manufacturing scene. 50% of Thai manufacturers have currently adopted or are working to adopt automation systems, with many medium-sized and smaller companies looking to progress towards these systems within the next 5 years. These advances allow companies to efficiently scale upwards and provide much more precise data analytic abilities, such as quantity optimization and much improved logistical capabilities.
This changing landscape has led to higher demand for industrial robotics within Thailand, with shipments increasing in 2018 by 133% from 2013. While demand is constantly increasing, Thailand is confident that they have the infrastructure and ecosystem in place to support the robotics and automation industry. Introduced by the Thai government in 2014, Thailand 4.0 is a model aimed to transform Thailand into an innovation-driven society unlocked from economic challenges resulting from past economic development models which placed emphasis on agriculture and light industry. For the present and the future, the Thai government has announced they will support and emphasize robotics, automation, and innovation to create this sustainable Thailand 4.0. Many organizations have been making changes to support this vision, with universities now providing programs in robotics/automation engineering, the Board of Investment of Thailand offering corporate tax exemption on machinery purchases, and the East Economic Corridor offering 50% tax reductions for those investing in robotics and automation.
Automation has become increasingly attractive to investors as it’s often deemed more efficient and has a lower operational cost compared to paying workers’ wages. Some economists argue that this rapid expansion of automation could negatively affect the size of the ASEAN workforce, potentially forcing millions of low-skilled workers out of jobs. Because of this, the Thai government must act to ensure that automation complements the traditional workforce rather than becoming its competitor. This could be a great opportunity for the government to invest in education to offset the effects of automaton, which could increase the average overall skill level of citizens. Investing in education would create a more dynamic and high-skilled workforce that could weather the challenges of a changing job landscape.
As the world goes further into the 21st century, automation is inevitable. At the cutting edge of this revolution is Thailand – a necessity for such an export-driven country. With the Thai government’s vision of Thailand 4.0, it is clear that Thailand is planning to remain globally competitive in both the near and distant future.
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Written by Dominick Ronan and Edited by Jack Vasquez & Alexander Fleiss
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