10
THAI
S-CURVE
INDUSTRIES

27 Feb 2020

Investing in Strength – 10 Thai S-curve Industries

Thailand has identified a total of ten industries to target for investment under a new digital Internet of Things (IoT) plan that will be vital to the country’s future economy. These industries are referred to as the S-curve industries of Thailand. 

Together they represent a shifting of gears for business in Thailand and an economic transformation for the country as a whole toward the industries that represent the business strengths of Thailand. They will be the foundation upon which both education and commerce will be focused as the country seeks to attain the Thailand 4.0 policy. 

What is an S-curve Industry in Thailand?

An ‘S-curve’ describes the mathematical arc that typical companies go through as they enter the marketplace and begin to undergo cycles of growth and stagnation. The ‘S’ in the term refers to the word ‘Sigmoidal’, which is a mathematical term from which the S-curve formula is derived. The arc represents the surges and lulls in profitability and growth over time that the company will encounter as natural cycles of business and marketing. 

A new, ultimately successful company starts at the bottom of its S-curve. The curve begins to rise as products start selling, and the company gains investment. As word gets out about the products or services, they experience rapid growth until their market matures. At this point, their growth slows as the market may also become saturated. 

The company has hit an inflection point. Normally in a marketplace, there are five types of people categorised by the amount of time it takes them to adopt an innovation or technology. These five types of ‘adopters’ or buyers are represented in an S-curve as inflection points.

The innovators and risk-takers will be the first ones to adopt a new product or innovation. They will test it and provide public feedback that will hopefully encourage the next group. The next group is made up of trend-setters, people who are always on the lookout for a technology or innovation that has been reviewed favourably. 

The group that buys the product after the trend-setters are called the early majority of the consumers of the product. They represent the apogee of the product’s appeal in the marketplace. However, the product will continue to sell to a large number of people, called the late majority, which represents a delayed reaction to the early majority’s adoption of the product. This is the point where the product reaches a steeper slope on the S-curve. 

But as the adoption of the innovation starts to slow down, the product reaches ‘critical mass’. This a phenomenon where the product has become so popular or useful, that it continues to diffuse itself into the rest of the community and becomes an accepted, everyday norm. The best recent example of critical mass is smartphone technology, which has become an everyday part of life to hundreds of millions of users around the globe.  

The ten S-curve industries of Thailand have been targeted as the best industries to provide the country with attaining the much-coveted level of ‘critical mass’ in the innovations they will offer and the markets they will enter.

These industries were targeted in two phases of five industries each. The first five industries on the list below represent the first phase targeted in 2014, with the latter five representing the industries targeted in 2018.  

Together, these industries are cited by business experts as representing the best chance for the country to attain the goal of Thailand 4.0. They are:

Smart Devices

The heart of the IoT, smart devices that can act interactively and autonomously are the future of both appliances and handheld devices. Thailand's electronics industry has been a major contributor to the country's GDP for decades. Some of the world's largest multinational electronics manufacturers have plants in Thailand, including LG Electronics, Fujitsu, Seagate, Sony, Samsung, and Western Digital.

Thailand’s competitive edge in the industry comes from its well-established supporting industries that supply automatic data processing components and hard disk drives, making the country an industry leader with room to grow.    

Future Automotive

Thailand is the largest car manufacturer in the Asia-Pacific region, and the industry provides employment to around 850,000 people, and the industry contributes 10% of the country’s GDP. Thailand has a head start in experience over fledgeling auto manufacturing nations like Vietnam and Indonesia. 

But with recent innovations such as telematics, EVs and autonomous driving being offered by the industry worldwide, the country must step up its technological capabilities to maintain its dominance. 

Health Tourism

Thailand has been quietly growing its health tourism or medical tourism profile for many years now. It has benefitted from the excellent doctors, staff and facilities of the hospitals in Thailand that rank up among the world’s best medical facilities. 

It has also benefitted from the logistical and bureaucratic expertise of transporting patients into and out of the country safely and comfortably. This ability has added greatly to Thailand being seen as a desired destination for world-class medical care. The industry can only benefit from Thailand’s push to integrate smart technology, robotics, advanced genetics and bio-sciences with the already established high-level of medical care.   

Agriculture and Bio-technology

With a thriving agricultural sector, Thailand is a natural location for biotech companies looking for abundant available natural resources. The country has over 15,000 varieties of plant life and a year-round growing season that acts as a further inducement for biotechnology in Thailand. 

With the country’s agricultural sector currently transitioning to ‘smart farming’ methods to increase their crop yield, and an already developed infrastructure of research and development facilities, Thailand is well-positioned to become a leader in the biotechnology industry.  

Food Processing

The food processing industry in Thailand is one of the most advanced in South-east Asia, and one of the country’s most valuable and important industries. Together with the food industry as a whole, they combine to contribute 23% of the country’s GDP. 

With such a well-established, advanced, and stable industry poised to benefit from innovations and advancements in robotics and automation, targeting this industry for further investment was a sensible choice to make.

Robotics and Automation

With both the medical industry, food processing industry and automotive industry natural user of robotics and automation technology, this industry will be vital to raising the capabilities of several other of the S-curve industries. 

Thailand's working population is ageing, and the younger generations have become better-educated and looking for jobs that suit their qualifications. It has become imperative for Thailand to invest in robotics and automation to maintain their supremacy in the industries that can benefit from these technologies.  

Aviation and Logistics

The need to provide maintenance, repair and overhaul (MRO) services and logistics services increases as a country expands its ability in both tourism and exports. Creating an MRO and logistics hub in Thailand is a necessary investment for the future that will help guarantee a lack of disruption in the supply chain of either exports or tourism. 

It’s one of the industries that will help other S-curve industries grow and succeed while it will contribute both jobs and revenue to the country itself. 

Bio-fuels and Bio-chemicals

This industry is another industry in which Thailand has enjoyed a head start over other regional, neighbouring countries. Investing in the industry at the turn of the new century. Thailand has established a complete supply chain of bio-fuels and bio-chemicals. 

With the energy needs of the country growing as its population, industries, and exports grow, bio-fuel industry development is an important investment that lowers the energy costs for the nation. Bio-chemicals are important both to the agriculture and medical industries of Thailand as well.   

Integrated Medical Services

Integrating medical services to utilise innovative and smart technologies is not only the way forward for Thailand's own health care policy, but it will also provide a boost to health tourism as well. 

Today, surgical robotics, smart algorithms, telemedicine, genetic data and health trackers serve to streamline and enhance the capabilities of both doctors and medical procedures. Thailand has enjoyed years of its advanced medical skill, experience and knowledge that has allowed the country to become a hub of medical tourism in Asia. By investing further in integrating the medical services to include new technologies and innovations, Thailand can become the hub of medical tourism for the world.  

Digital

The digital industry in Thailand is focusing its efforts on both the IoT and Artificial Intelligence. The industry is comprised of established companies in the digital industry and startups. The established companies will provide both facilities, mentoring and education to the startups in a collaborative atmosphere. 

Together these entities also plan to be investing their time and efforts in providing innovative solutions to all the other targeted industries on the list. The digital industry may well turn out to be the most important as its innovations can be applied to all other industries.  

Working Together for Thailand’s Benefit

There is an old saying that aptly illustrates the effort that Thailand is making and the industries they are choosing to attain Thailand 4.0. 

The saying is, “A rising tide lifts all boats”. It means that by choosing the industries that Thailand has targeted, they all can help each other in finding success. They each can provide technologies and innovations from which other industries can benefit. It's the concerted effort that is the crucial thing. 

In helping one another, they can raise the country's economy, the well-being of its people and its status in the world community. They will serve to unite the country in prosperity and provide an avenue for advancement far into the future. 

 

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