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Emerging International Trends Globalization Liberalization Regional integration WTO & rules on international trade Changes in Technology . New Economy Information Economy Digital Economy Knowledge Economy Network Economy. Features Change in structure of production
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Emerging International Trends Globalization Liberalization Regional integration WTO & rules on international trade Changes in Technology
New Economy Information Economy Digital Economy Knowledge Economy Network Economy
Features Change in structure of production Importance of Knowledge Consumers have more choices Networking important More Competition Intangible assets more important than tangible assets
Changing scenarios in industry • - Internationalization • - Division in stages of production and specialization • - Rapid changes in products/processes and shorter product-life cycle • - Service-orientation and customization
Changing scenarios in industry • - Importance of intangible assets • - Merger and acquisition; strategic alliances • - New rules and regulations; new protectionism • - More intense competition • Driving force: Technological change
Issues Challenging Thai Industry 1. Trend of Industrial Development Skill & Technology And Knowledge intensive Labor intensive 2. Trade Barriers Technical, social & environmental restrictions Quantitative Restriction & Tariff
Issues Challenging Thai Industry 3. Forms of Compettitions Quality Standard, Service and customer responsiveness Price 4. International trade Free Trade Protection
Issues Challenging Thai Industry 5. China becomes a major competitor in term of trade and investment WTO China 6. Rapid change in technology
Challenges to Thai Industry More intense competition Need rapid adjustments
Industrial Policy in 9th plan (2002-2006) • Enhancement of competitiveness • Alleviation of adverse impact of industrial growth
Enhancement of Competitiveness • Restructure production and trade • Upgrade infrastructure • Improve productivity • Develop network and linkages • Promote SMEs • Promote technology and manpower development • Co-operate with neighboring countries
Alleviate social problems caused by industrial growth • Clean environment • Decentralization of industrial location • Rural industrialization • Protection of consumers’ and workers’ welfare
Current Emphasis of Industrial Policies • 1. SMEs promotion • 2. Investment promotion esp. in target industries • 3. Competitiveness enhancement • 4. Entrepreneurs development • 5. Rural industries and community enterprises • 6. Closer relations with neighboring countries
Strategies for Different Industrial Groups • Global industries • Regional and domestic industries • Basic and strategic industries
Global industries : Industries with high international competitiveness e.g. food, textile, electronics, motor vehicles, jewelry
Regional and domestic industries : Industries with some competitiveness, but catering more for domestic and regional markets e.g. wood products, furniture, paper, rubber, plastics, ceramics, pharmaceuticals
Basic and strategic industries : Industries with high forward linkages, e.g. iron and steel, petrochemicals, machinery
Industry Strategic Thrusts • Differentiate products • Develop supporting industries and cluster • Speed up order- delivery process • Promote R&D and design • Improve safety and other standards • Create Thai brand Global Industry • Encourage technology transfer • Promote & develop SMEs • Increase value added • Expand markets • Improve standard and design Regional & Domestic Industry • Develop linkages • Improve • production efficiency • Expand markets • Reduce excess capacity • Encourage M&A Basic & Strategic Industry
Global Niche Creation Kitchen of the World Food Industry Group Fashion Industry Group Fashion Capital of Asia Automotive Industry Group Detroit of Asia
Cluster Development Standardization • Cluster development in high potential • products i.e. Rice, Chicken, Fruits, • Cattle products Spices, Herbs, and • Thai Restaurants • Supporting the development of farm standard for • target products, development of • testing process • Promoting ISO and TQM Kitchen of the World High Quality and Safety From Farm to Table R&D Branding Management • Co-operation on R&D • between government and • private sector in • raw materials for food • products • Joint effort of government • and private sector on • market penetration • Identification of core agency in • monitoring quality and • standard of food products
1. Fashion and Country Image Promotion • Outbound Marketing • Marketing Channel Expansion • Trade Representatives • Fashion Exhibition • Inbound Marketing • Bangkok: Fashion Business Center • Fashion Country Promotion • Bangkok Fashion Week Fashion Bangkok: Fashion City Making Bangkok to be the Capital of Tropical Fashion of Asia 3. Industry Development 2. Design and Brand Development • Fashion Expert Consultant • Branding Ability • Create fashion personnel • Information and Publication • Productivity Improvement
R&D for Cluster Development Strengthening Marketing and Management • Improving skill of vocational graduates and industrial • engineers and others working in factories • Establishing R&D center and • transferring knowledge to suppliers • Establishing strategic technical development and • transfer partners with international agents and • organizations. • Encouraging Thai suppliers to create • their own brand • Establishing e-network and market for • components and all parts in supply chain Detroit of Asia The Automotive Production Base of ASIA Second Largest Production Base of Motorcycle Logistic Development Market Expansion • Developing transport system for export • Improving customs procedure • Developing product facilities • Expanding motorcycle market into • neighboring countries and South • Asia by using both quality • and price strategies
Industrial Restructuring Program • Objectives : Improving long-term capabilities of 13 industrial sectors • Programs : • 1. Improvement of industrial productivity • 2. Technology upgrading • 3. Manpower development
4. Promotion of SMEs and supporting industries • 5. Improvement of product design and marketing • 6. Dispersion of labor-intensive and non-polluted industries to rural areas • 7. Promotion of FDI • 8. Use of clean technology/reduce adverse effects of industries on environment
Directions for Industrial Development • Enhancing competitiveness • Ensuring fair competition • Moving towards knowledge-based industries • Promoting small-scale industries • Promoting industrial clusters • Alleviating adverse social impact of industrial growth
New direction by the Abhisit government toward “creative economy”: more value added from new ideas, creativity and innovation 26
New direction by the Abhisit government toward “creative economy”: application of “Thainess” in new industries/products e.g. animation, graphic design, computer software, entertainment, fashion, and other “cultural goods” part of the Thai Khem Khaeng stimulus package 2010 - 2012 27