As the global value chain sends businesses and consumers worldwide scrambling to keep pace with the Fourth Industrial Revolution (4IR) by deploying deep technologies such as big data and analytics, A.I., and the industrial internet of things, Thailand is gearing up its human resources to meet the fast-evolving needs of the business world with the new skills and global mind-set that will help them leverage technology-driven changes.
Thailand’s strategies for elevating the skills of its human resources have been driven by collaboration among the public and the private sector and academic institutes, with the transformation towards a target-oriented approach to meet business demand.
Leveraging the country’s strengths as a key investment destination in the region, the Thai government has adopted a multi-pronged strategy to ensure the education system reduces skill mismatch of the local human resources. Among key areas are improving the country’s primary education curricula so that students have basic skills in Science, Technology, Engineering and Mathematics (STEM), Science, Technology and Innovation (STI) and data as well as adapting curricula in universities and vocational schools to ensure graduates meet business demand by quantity and quality.
Along with promoting the deployment of 4IR technology among businesses, Thai government agencies including the Thailand Board of Investment (BOI) have implemented incentive schemes that seek to promote the private sector’s investment in training of their human resources.
The Eastern Economic Corridor (EEC), Thailand’s pilot special economic zone for high-technology industries, located in industrial areas of the Eastern region, have cooperated with academic institutes and industries to implement demand-driven human resource development, with incentives given to industries for their scholarship scheme in universities and vocational schools and expenditure in arranging short courses. The Thai government is considering easing the rules for long-term residence visas to attract international talents and professionals to use Thailand as their workstations.
Based on its survey of multinational companies across 15 industrial sectors in 26 economies, the World Economic Forum concluded in “The Future of Jobs Report 2020” (1) that the 4IR technologies, which have been widely deployed by businesses as a productivity enhancement strategy, are bringing sweeping changes to the labour market worldwide and at a faster rate than expected in light of the COVID-19 pandemic.
With the deployment of cloud computing and big data; with e-commerce progressing at an unabated pace; and with the accelerated adoption of encryption, non-humanoid robots, and A.I. by businesses, the global labour market will be transformed to such an extent that the time spent by humans and machines on current tasks will be equal by 2025. The report concluded by predicting that within this timeframe, data science, artificial intelligence, content creation, and cloud computing will be the top emerging professions, while analytical thinking, creativity, and flexibility will be among the top skills needed.
Equipping the Thai Workforce with Industry 4.0 Skills
The Thai government has prioritised attracting tertiary students in STEM and STI in its human resource development plan, as these fields are considered to be necessary for driving the country forward according to the policies to develop 12-targeted industries as the economic driving engines.
A study (2) by Organisation for Economic Co-operation and Development (OECD) showed that the Thai labour force has recorded a sharp increase in the accumulative number of young university graduates holding degrees in the fields of engineering and manufacturing, ICT, healthcare and natural sciences by 70%, 40%, 10% and 35% respectively between 2011 and 2018.
Official data from the Ministry of Higher Education, Science, Research and Innovation (MHESI), showed that Thailand is producing approximately 350,000 graduates annually, with graduates in the fields of biotechnology, mathematics, statistics, engineering, construction and ICT accounted for 20% of the total in 2018, slightly increased from 18% in 2012. Meanwhile, the EEC expects the demand for workforce in 10 targeted industries (3) to stand at approximately 476,000 over the next five years, out of which 54% are from vocational schools.
The MHESI, the agency set up in 2019 and entrusted to reorganise the country’s tertiary education, uses Cooperative and Work-Integrated Education (CWIE) program as the key framework in which the private sector will play an increasing role in upskilling and reskilling the local human resources to cope with constant changes, with incentives and collaboration by the public sector.
Under CWIE framework, the BOI is collaborating with the EEC, MHESI, the Ministry of Labour and the Ministry of Education to ensure the country supports the investor demand for skills and drives forward Thailand’s technology-oriented economy.
The MHESI will also adopt a new framework of ensuring students are equipped with the multi-skill and multi-career adaptability demanded by the global culture and with global skills in communication, digital skill and learning.
The Thai government is also considering initiating more options that increase flexibility for vocational and university students to graduate if their skills and knowledge match the demand and receive training or participate in skill training courses then transfer credits from these activities to the curriculum. MHESI, EEC and related agencies are also creating a database that links the demand and supply of human resources in each field.
The implementation of these policies has already resulted in an overall improvement of Thailand’s labour force on international rankings. In 2021, Thailand was ranked higher on the Swiss-based Institute for Management Development’s World Competitiveness Ranking (4) at 28th out of 64 economies, compared with 29th place in 2020. Despite being weighed down by harsh economic impacts from the pandemic, Thailand’s score improved in several factors including those related to the labour market, such as the growth of the labour force, in-training opportunities for employees in the private sector, scientific infrastructure, increase in scientific research publications, business confidence on collaboration between academia and the private sector, and the protection of intellectual property rights.
Ramping up Incentives for Private Sector Collaboration
Developing the ability to upskill human resources has a central role in the BOI’s promotional investment incentives. As a focus of its merit-based incentives, the BOI currently allows businesses to add investment in training or internships to develop the skills, technology, and innovation of their human resources into the calculation of corporate income tax exemption (CIT) eligibility with no set minimum amount. Eligible activities include training or internships for developing skills, technology, and innovation for students who are studying in science and technology fields, such as work-integrated learning (WiL) projects, dual vocational education projects, or cooperative education projects.
For more advanced skills, eligible projects must offer advanced technology training as approved by the BOI or targeted advanced technology training as approved by the MHESI or the Board of the Eastern Economic Corridor Policy Committee in cases where the entities are located in the EEC area. Training can be either in-house or arranged by external parties. Businesses are also allowed to submit two amounts of investment capital and job training expenses when applying for additional CIT exemption as approved by the BOI.
While these training subsidies will help address the current skill mismatch in the workforce, the BOI is also offering 5-year investment incentives of CIT exemption and non-tax incentives to entities that establish educational and training institutions for developing highly skilled professionals in STEM.
(1) https://www.weforum.org/reports/the-future-of-jobs-report-2020
(2) https://www.oecd.org/countries/thailand/thailand-s-education-system-and-skills-imbalances-assessment-and-policy-recommendations-b79addb6-en.htm
(3) https://www.eeco.or.th/en/business-opportunities
(4) https://worldcompetitiveness.imd.org/countryprofile/overview/TH
