Thailand building US$1bn GovTech economy
In the foyer of thailand's National Innovation Agency, a massive stage dominates. Excited young people are clustered around its edges, which are emblazoned with the letters “SXSW”.
It isn't often that governments engage with cool American music festivals. But this is all part of the NIA's mission to shake up the bureaucracy and engage with the modern world.
The NIA team is always trotting the globe, trying to meet with innovators to bring their ideas back to Bangkok. They want to create new sectors for Thailand's economy, and new opportunities for its budding entrepreneurs.
One key thrust is bringing startups into government procurement, overhauling rules that allow monopolies to win the deals and block local players from building their businesses. GovInsider caught up with Pariwat Wongsamran, Head of NIA's Startup Thailand initiative, to discuss his plans to “jumpstart” government procurement and build a billion dollar sector.
A focus on govtech
GovTech can be a “huge market for Thailand” worth over US$1bn, Wongsamran believes. He thinks government procurement can allow innovative companies to scale and build ideas for other sectors. “It is quite a huge size for startups to use this market to jumpstart,” he says.
The biggest reform is to government procurement, which is changing to make it easier for startups to win business. Currently, a business needs to have a 10 year track record simply to be eligible to tender.
Now, they have a dedicated track “so they won't have to compete or reach the same criteria as big firms in the process”, Varangtip Satchatippavarn, the agency's Head of Global Partnerships, recently told GovInsider. This is similar to the accreditation programme in Singapore Government, which has also tweaked procurement rules to enable innovative local suppliers to compete.
It's not just about procurement reform, she says, but also about “forcing government officials to accept startups and technology in their workplace”. “Whether people like it or not, technology is here to stay, and you can either adapt or be forced out,” she believes. This needs a culture change within the broader Thai bureaucracy.
Startup Thailand's goal is to groom and attract “3,000 international innovation-driven entrepreneurs”, or IDEs, across multiple industries in the next 10 years. “We are going to open the ecosystem for foreign startups and investors, and talent from around the world to join our ecosystem,” says Wongsamran. There are innovation hubs in Bangkok and Chiang Mai, designed to attract global investors and foreign startups to set up shop in Thailand.
One compelling pull factor is the size of the Thai population: there are 70 million people for startups to carry out market testing, he explains. “They can develop the product and service, and use Thailand as a testbed,” Wongsamran remarks. Startup Thailand will also help to link up foreign startups with local startups, venture capital funds, or corporates, he says.
“We would like the startups to go outside of Thailand and go abroad, at least to Southeast Asia.”
Scalability is crucial to a startup's survival, and Startup Thailand runs startup exchange programmes with cities in Germany and Japan, for example, Wongsamran adds. “We would like the startups to go outside of Thailand and go abroad, at least to Southeast Asia.”
Entrepreneurship skills at uni
Finally, the government is putting keen focus on building skills, particularly in young people. “We still lack a developed workforce to serve the ecosystem,” Wongsamran notes.
The agency is working with 35 universities to help graduates “learn and relearn new technology capability”. These graduates will also undergo foundational courses in entrepreneurship; this way, they have extra skills on top of their chosen field of study, Wongsamran explains.
These education programmes often culminate in an idea pitching day which attracts 30,000 students. They need to present onstage and show a demo, Wongsamran continues. “They can join forces with friends, form a team and generate ideas,” he says.
The 50 teams that make the cut are given support to set up their own companies, and Startup Thailand matches them with investors or corporate players that want to collaborate with startups. “Many corporates in Thailand are eager to work together with startups,” says Wongsamran.
The government also wants to boost new sectors with tech and move away from dependence on its traditional economies – agriculture and tourism, for instance. “The old economy is so traditional,” he points out.
Besides agritech to support Thailand's massive agricultural industry, Wongsamran wants to see startups explore areas such as telecoms, fintech, urban tech, property management, and insurance.
From procurement reform and innovation hubs, to attracting foreign startups to build something big in the country, Thailand wants to modernise its economy – led by the NIA, the fresh face of innovation in government.