Transcript How to do? - TDRI: Thailand Development Research Institute

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
Visioning
NCC
Advisory Team
NESDB : CMU
Economic
Restructuring
Committee
Strategy
Setting
Resource
Allocation
Management
National
Committees
Strategy
Execution
MOF
MOAC
MOC
MOI
MOL
MOE
...
2
Globalisation and
Thailand’s Economy
3
Globalisation and Thailand’s Economy
Billion Baht
Thailand’s Trade Proportion of GDP
(in value term), 2002
6000
5000
4000
3000
2000
1000
0
1997
Source : NESDB, June 2002
1998
1999
GDP
2000
Export
2001
Import
4
Globalisation and Thailand’s Economy
Billion Baht
Thailand’s Investment Flows
250000
200000
150000
100000
50000
0
-50000
-100000
1997
1998
1999
2000
2001p
-150000
-200000
-250000
Direct Investment
Other Loans
Source : Bank of Thailand, November 2002
Portfolio Investment
5
Conceptual
Framework
6
Conceptual Framework
Old Paradigm
Export-Oriented
• Higher Export
Lower Import
New Paradigm
Sustainable
Economic Value
Export
Domestic
Balance Local and Global
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Conceptual Framework
Opportunities
Globalisation/
External
Factors
X
Value
Creation
=
Strategies
X
Capabilities
Internal
Factors
(Competitiveness Potential)
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Opportunities
Opportunities
X
Value
Creation
=
Strategies
X
Capabilities
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Global Forces & Trends :
Implications to Thailand
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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
More
Interdependence
Overcapacity
Knowledge
Divide
• Global Deflation
• Growth with Unemployment
• Increase Formal and Continuing
Education
• More R&D and Innovation 11
Change in Demography
Population growth will continue to shift toward
developing countries, leaving developed countries
with high aging population proportion
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Overcapacity
Tragedy
of the
Common
Mass Market
Competitive
Paradigm
Scale
Driven
Economy
Scale,
Standardization,
Replication,
Efficiency,
Hierarchy
Over
Investment
Over
Capacity
Shortage
of Demand
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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.
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Knowledge Divide
To leap into knowledge economy, society needs a complete set
of information , human capital and technology
Example: Lack of
IT infrastructure
Key Enabler
• Information Technology
Example: Lack of
• Human Capital
adequate education
Data
Information
Knowledge
Social
Wisdom
Example: Lack of free flow
of information
Lacking one will create knowledge divide problems
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Global Trends : Implications to Thailand
More
Non-tariff
Barriers
Higher
Competition
Decreasing
Prices
Opportunities
for Potential
Product
Development
Implication
to Thailand
Lower
Efficiency of
Fiscal & Monetary
Policies
Expansion of
BKK and
Vicinities
Labour Problems
• Lack of Knowledge
and Skilled Labour
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Danger Signs
Stuck in the
Competitive
Nutcracker
Profitless
Growth Trap
Few Investment
for the Future
Danger
Signs
Low Responsiveness
to the Global
Changes
Lack of Clear
Strategy in
Geopolitics and Geoeconomics
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Competitiveness
Capabilities
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Sources of Capability
Opportunities
X
Value
Creation
=
PC
HC
Physical
Capital
Human
Capital
FC
SC
Financial
Capital
Social
Capital
Strategies
X
Capabilities
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Thailand’s Competitiveness Ranking
1997
0
5
10
15
20
25
30
35
40
45
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1998
1999
2000
2001
2002
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IMD
30
31
36
41
30
35
33
38
Source: IMD, World Competitiveness Yearbook, 2002
WEF, The Global Competitiveness Report, 2002
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WEF
34
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Physical Capital
Strengths
• Fertile
Natural
Resorces
Weaknesses
• Low access
capabilities to tech.
• Low R&D
expenditure/
investment
• Low IT skills
Financial Capital
Strengths
Weaknesses
• Efficiency in
• Credit access
tax collection
• No freedom to
+tax rate
acquire control
• Stabilised
in domestic
capital index
companies
• Low cost of
capital
• Attractive
investment policy
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
Social Capital
Weaknesses
Strengths
• Low efficiency
• Low cost of
of medical
living
assistance
• No
discrimination • Too open for
globalisation
• Identity +
attractive
national culture
Source: IMD, 2002
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Thailand’ s
Competitiveness
Strategy
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Strategies
Opportunities
What to do?
X
Value
Creation
=
Strategies
X
Strategic
Position
How to do?
Capabilities
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Dual Track : Global Local Links
Specialization
Within-Community
Self-Sufficiency
Surplus
BetweenCommunity
Trade
Social
Cohesion



Sufficiency
Community Building
Cultural Identity
 Family Value
CommunityGlobal
Trade
CommunityUrban
Trade
International
Competitiveness



Efficiency
Cost effective
Productivity
 Innovation
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Desired Strategic Position
High Performance
Economy (HPE)
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Positioning Thailand
Public
Sector
Reform
Knowledge-Based
Economy
Owner of
Active
Advance
International
HPE
Technology
Player
Society of
Good Living
Macro Economic Foundation
• Fiscal & Monetary Policies
• Trade and Investment Policies
• International Policies
Global
Niches
Generic Factors
• Human Resources
• S&T
• Management
• Infrastructure
Private
Sector
Reform
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What to do?
Knowledge-Based
Economy
Active International
Player
• English/Chinerse will
be the 2nd language
of Thailand
• ICT accessibility and
literacy
• Substantial investment
in R&D (HardwareSoftware-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
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What to do?
Owner of Advance
Technology
Society of
Good Living
• Preserve and leverage
Bio-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
• Balance the ways of
life
• Efficient urban mgt.
• Empowering local
people and institutions
• Lean, efficient, and
honest bureaucracy
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What to do?
Global Niches
• Kitchen of the World
• Tourism Capital of Asia
• World Tropical Fashion
• Detroit of Asia
• World Graphic Design Centre
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
Software
 Auto industry  Fashion
Low Tech
Level of Sophistication
High Tech
Potential Global Niches

Foods

Low Touch
Tourism
High Touch
Level of Customization
Tourism
Asia Tourism
Capital
Foods
Kitchen of
the World
Fashion
World Tropical
Fashion
Auto
Detroit
of Asia
Software
World
Graphic Design
Center
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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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