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Thailand’ s Competitiveness : The New Paradigm Under Globalisation

Thailand’ s Competitiveness : The New Paradigm Under Globalisation. Office of the National Economic and Social Development Board (NESDB). TDRI Year-end Seminar 14-15 December 2002. Mechanism for Competitiveness Driving. National Committees. MOF. MOAC. MOC. MOI. MOL. MOE. NCC.

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Thailand’ s Competitiveness : The New Paradigm Under Globalisation

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  1. Thailand’ s Competitiveness :The New Paradigm Under Globalisation Office of the National Economic and Social Development Board (NESDB) TDRI Year-end Seminar14-15 December 2002

  2. Mechanism for Competitiveness Driving National Committees MOF MOAC MOC MOI MOL MOE ... NCC Visioning Advisory Team NESDB : CMU Resource Allocation Manage-ment Economic RestructuringCommittee Strategy Setting Strategy Execution

  3. Globalisation andThailand’s Economy

  4. Globalisation and Thailand’s Economy Thailand’s Trade Proportion of GDP (in value term), 2002 Billion Baht Source : NESDB, June 2002

  5. Globalisation and Thailand’s Economy Thailand’s Investment Flows Billion Baht Source : Bank of Thailand, November 2002

  6. Conceptual Framework

  7. Conceptual Framework Old Paradigm New Paradigm • Export-Oriented • Higher Export Lower Import Sustainable Economic Value Export Domestic Balance Local and Global

  8. Conceptual Framework Opportunities X Value Creation = Strategies X Capabilities Globalisation/External Factors Internal Factors(Competitive-ness Potential) 8

  9. Opportunities X Value Creation = Strategies X Capabilities Opportunities

  10. Global Forces & Trends :Implications to Thailand 10

  11. Global Forces & Trends • The End of Single Market • Increase Social Budget • Mobility of Labour • New Product Development • Incresing Roles of Businesses & NGOs • Efficiency Based Government • Power of Information Occupants • Good Governance Change in Demography MoreInterdependence Overcapacity Knowledge Divide • Increase Formal and Continuing Education • More R&D and Innovation • Global Deflation • Growth with Unemployment 11

  12. Change in Demography Population growth will continue to shift toward developing countries, leaving developed countries with high aging population proportion 12

  13. Overcapacity Tragedy of the Common Over Investment Mass Market Competitive Paradigm Scale Driven Economy Over Capacity Scale, Standardization, Replication, Efficiency, Hierarchy Shortage of Demand

  14. More Interdependence Ethnic diversity are developing tension in several parts of the world. One example is an illicit trafficking network that need international cooperation among states and non-state actors. 14

  15. Key Enabler Information Technology Human Capital Knowledge Divide To leap into knowledge economy, society needs a complete set of information , human capital and technology Example: Lack of IT infrastructure Example: Lack of adequate education Social Wisdom Knowledge Data Information Example: Lack of free flow of information Lacking one will create knowledge divide problems

  16. Global Trends : Implications to Thailand Opportunities for PotentialProduct Development Lower Efficiency of Fiscal & Monetary Policies MoreNon-tariff Barriers Implication to Thailand Expansion of BKK and Vicinities Higher Competition Decreasing Prices • Labour Problems • Lack of Knowledge • and Skilled Labour 16

  17. Danger Signs Profitless Growth Trap Few Investment for the Future Stuck in the Competitive Nutcracker Danger Signs Lack of Clear Strategy in Geopolitics and Geo-economics Low Responsiveness to the Global Changes

  18. CompetitivenessCapabilities 18

  19. Opportunities X Value Creation = Strategies X Capabilities Sources of Capability PC Physical Capital HC HumanCapital FC Financial Capital SC Social Capital

  20. Thailand’s Competitiveness Ranking Source: IMD, World Competitiveness Yearbook, 2002 WEF, The Global Competitiveness Report, 2002

  21. Physical Capital Human Capital • Strengths • Low Dependency Ratio • Good Remuneration of mgt. & service professions • High Rate of Employment • Weaknesses • Low education • Low skilled labour • Low labour productivity • High youth unemployment • Low HRD index • Weaknesses • Low access capabilities to tech. • Low R&D expenditure/ investment • Low IT skills • Strengths • Fertile Natural Resorces Financial Capital Social Capital • Strengths • Efficiency in tax collection +tax rate • Stabilised capital index • Low cost of capital • Attractive investment policy • Weaknesses • Credit access • No freedom to acquire control in domestic companies • Weaknesses • Low efficiency of medical assistance • Too open for globalisation • Strengths • Low cost of living • No discrimination • Identity + attractive national culture 21 Source: IMD, 2002

  22. Thailand’ s Competitiveness Strategy

  23. Opportunities X Value Creation = Strategies X Capabilities Strategies What to do? Strategic Position How to do?

  24. Specialization Between- Community Trade Community-Global Trade Community- Urban Trade Within-Community Self-Sufficiency Surplus Dual Track : Global Local Links Social Cohesion International Competitiveness • Sufficiency • Community Building • Cultural Identity • Family Value • Efficiency • Cost effective • Productivity • Innovation

  25. Desired Strategic Position High Performance Economy (HPE)

  26. Positioning Thailand Knowledge-Based Economy Owner of AdvanceTechnology Active InternationalPlayer HPE Public SectorReform PrivateSectorReform Society of Good Living Global Niches • Macro Economic Foundation • Fiscal & Monetary Policies • Trade and Investment Policies • International Policies • Generic Factors • Human Resources • S&T • Management • Infrastructure 26

  27. What to do? Knowledge-Based Economy Active InternationalPlayer • English/Chinerse will be the 2nd language of Thailand • ICT accessibility and literacy • Substantial investment in R&D (Hardware- Software-Peopleware) • Strong sense of lifelong learning • Empowering education and creativity • Aggressively move towards Asian economic integration • Leverage Bi-lateral and Muti-lateral Negotiation • Stimulate and support local business for going global 27

  28. What to do? Owner of Advance Technology Society of Good Living • Preserve and leverageBio-deiversity • Mobilize resources towards advance technology development • Intense collaborative partnership between businesses and education and research institutions • Efficient and impartial law enforcement • Preventive health care focus • Balancethe ways of life • Efficient urban mgt. • Empowering local people and institutions • Lean, efficient, and honest bureaucracy 28

  29. What to do? Global Niches • Kitchen of the World • Tourism Capital of Asia • World Tropical Fashion • Detroit of Asia • World Graphic Design Centre 29

  30. Potential Global Niches Tourism Asia Tourism Capital Example High Tech Foods Kitchen of the World • Software • Fashion • Auto industry World Tropical Fashion Fashion Level of Sophistication • Foods Detroit of Asia Auto • Tourism Low Tech World Graphic Design Center Software Low Touch High Touch Level of Customization 30

  31. Issues for Discussion • 1. Thailand’s Position • - Knowledge-based Economy • - Active International Player • - Owner of Advance Technology • - Global Niches • - Society of Good Living • 2. Comment on “What to do?”

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