On July 11th, 2018, we had an amazing opportunity to partner with the Thailand Board of Investment on an evening program: “Investing in Thailand: Gateway to Innovation.” Held at Quid in San Francisco, the program highlighted Thailand’s skyrocketing potential for investors and entrepreneurs alike—a countrywide collaborative effort that positions Thailand as a new crown jewel in the ASEAN market.
The evening began with a keynote from Ms. Ajarin Pattanapanchai, Permanent Secretary for the Ministry of Digital Economy and Society, Investing in Thailand. (“We actually changed the name from Ministry of ICT to its current name to highlight the major changes we’ve been making,” she mentioned.) Ms Pattanapanchai led the attendees through Thailand’s push to bring the entire country into the digital economy together, from grand cities like Bangkok to small mountain villages.
The digital transformation is enhancing Thailand’s competitive advantage, as everything from infrastructure to government to the workforce itself is getting connected and digitized. Thailand’s residents are already avid users of both internet and social media—with a population of 67 million, there are 93 million total mobile connections—and the Thai government is both highly supportive and involved in adopting a digital economy to better serve its citizens and attract new investments. One main goal is bringing high-speed fiber optic internet to every village in Thailand, increasing access to education, healthcare, and job opportunities on both a local and global scale. Connectivity keeps talent at home, which strengthens the local economy.
Urban development has also kept pace with the digital economy: new and developing projects include high speed rail lines, commercial seaports, new and technologically-advanced office parks and smart cities; 6k of dedicated bike paths, and almost $57M USD in public and private investments in the Eastern Economic Corridor.
Next, we heard from Mr. Narucha Ruchuphan, Director of Investment Promotion, on Thailand investment incentives. Thailand isn’t just a beautiful country—it’s a competitive investment economy with a variety of key business incentives:
- A strategic central location
- The 2nd largest economy of ASEAN countries
- A 20% corporate income tax.
- Thailand ranks #60 for cost of living (the US is #25).
The Thai government is actively encouraging a global approach to new investments, with focuses on tech and innovation, human capital, and country development and enhancement. It’s an incentive-based program: high-value services across a variety of industries, a wide range of advanced technologies (bio-, nano-, material, digital tech developers in particular will find a warm welcome in Thailand); low operations costs, and plenty of labs and testing grounds for material projects.
Thailand has also created Smart Visas, which are designed to attract foreign talent—longer term limits and lower restrictions than you’ll find almost anywhere.
The evening transitioned to a panel discussion moderated by Deborah Magid, Director of Software Strategy with IBM’s Venture Capital Group, with Volker Heistermann, Managing Director at Yushan Ventures, and Chatchai Khunpitiluck, Senior Executive Vice President at DEPA Thailand. Selections from their conversation are below. Some comments have been edited for clarity and/or brevity.
Deborah: Six or seven years ago there was no startup scene in Thailand—and now the events garner thousands of people.
Chatchai: People didn’t understand what startups were for, and it was hard to even explain to investors. But we went from almost no startup scene six years ago to $300M USD in investments last year—not much compared to Silicon Valley, sure, but big for a developing nation. Today you’ll see Thai farmers using smart phones to check the news, check social media, watch TV—everything is rapidly changing, and technology is moving the world forward. There’s huge potential waiting for us.
Volker: I think the catalyst was Startup Thailand—I remember it was a Sunday, it was raining, and 40,000 people still showed up. That really got the word out in the population. The government is supporting, the media is jumping in—and you need that support.
Deborah: A lot of global investors are pulling out of India and China and funneling to Thailand and other ASEAN countries instead. Have you noticed that?
Chatchai: We are trying to put ourselves in a spot where we’re a landing station for ASEAN countries. The government is putting infrastructure in place that create opportunities for investors in Thailand. The AgTech sector draws about 40% of our population, so we’ve put a lot of technology innovations there. The other sector is tourism: is about 90% of our GDP. Globally, the average is 9%. We’d like to see income distributed more equally—we have startups in every single service area.
Deborah: When you see venture capital in Thailand, do you see VCs putting money into startups, or is it coming from overseas?
Volker: The corporates are very aggressive—we’re actually working with some of them on innovation management. Thailand is a good place to go if you’re trying to get people to invest in your startup or raise money.
Chatchai: The government is putting a lot of effort into startups. It’s not just one company we’re supporting—it’s a whole industry with thousands of people connected to it. Digital transformation means everyone has to grow, in order to keep up and to retain their users.
Deborah: There was an article recently that said for every 1 job created , four other jobs are created around it. So it’s a huge benefit for cities to have a startup community.
Chatchai: Yes, and our government saw the importance of deregulation—there were a lot of laws in place that were impractical for startups and startup culture.
Deborah: What’s the culture of risk-taking in Thailand?
Volker: There’s a saying in the Thai tourist scene: “If you don’t try, you don’t know.” Tourism has affected the startup scene—and the government is in full support of both.
Deborah: Are there ways of doing business you had to learn about?
Volker: It takes a long time to build trust and a relationship in order to meet with someone outside of work. Thai people will meet you during the day, in the office—don’t go there expecting a lunch meeting or after-work drinks until well after you’ve established a relationship with a new business partner.
Deborah: Thailand is extremely connected – something like 85% of the population uses social media in some form or another. And a lot of the time they’re using social media for sales and marketing.
Chatchai: Thailand is extremely entrepreneurial—we have a lot of mom-and-pop stores, a lot of businesses that are family-owned. Take the recent Thai cave rescue, for example: I think that says a lot about who we are as a people. We always find a solution or a workaround to any problem. We’re extremely innovative and adaptable, and it shows out again and again.
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