the pace of thailand through the year 2020 a presentation by chakramon phasukavanich 20 may 2003...
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The Pace of Thailand through the Year 2020 The Pace of Thailand
through the Year 2020
A presentation by
Chakramon Phasukavanich 20 May 2003
NESDB National Economic and Social Development Board
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Complexity of the World Global Economic Development
Navigating whitewater
Thailand’s Vision 2020 Where are we now?
Thailand’s dreams
Competitiveness agenda
Development platform
..Mirror our direction with complexity ..Mirror our direction with complexity of the world...of the world...
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Stages of Economic DevelopmentStages of Economic Development
1950 1960 1970 1980 1990 2000 2010 2020
ComparativeAdvantage
CompetitiveAdvantage
- Resources- Low-cost
- Innovation- Productivity
Growth
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Productivity depends on the value and efficiency of products and services.
Not what industries we compete, but how we compete.
Devaluation and lower costs reveals a lack of fundamental competitiveness
Sources of Prosperity…Sources of Prosperity…
Wealth of Wealth of NationNation
ProductivityProductivity
InnovativeCapacity
“Competitiveness”
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Competitiveness = ???Competitiveness = ???
• Is NOT about competition policy
• Is NOT about restructuring
• Is NOT about “choosing” industries
• Is NOT about competition policy
• Is NOT about restructuring
• Is NOT about “choosing” industries
• IS about Productivity • IS about Positioning• IS about Clustering• IS about Building
platforms for multiple industries
• IS about Strategy
• IS about Productivity • IS about Positioning• IS about Clustering• IS about Building
platforms for multiple industries
• IS about Strategy
“Is NOT” “Is”
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National AgendaNational Agenda
Grass rootEconomy
Grass rootEconomy
Global
LocalEconomic Social
Social CapitalSocial CapitalSocial CapitalSocial Capital
SustaiSustainablenableDeveloDevelopmentpment
SustaiSustainablenableDeveloDevelopmentpment
CompetitCompetitivenessivenessCompetitCompetitivenessiveness
“Tools for raising standard of living in Thailand”
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““Global Trends”Global Trends”
Economics & Finance
Geopolitics &Governance
Cultures &Societies
Values &Beliefs
Civilization &Infrastructure
EnvironmentScience
Technology
-Next wave in Energy -ICT revolution -Nano revolution in 3 science fields-Science = Business
-Asia, high potential growth -Venture capital rising-New business model in IT Era-Broader conflict, fragmented -Sole superpower
-Global Lifestyle-Changing status of women-Power of media-More complex society-Different syncretistic spirituality-The meta-values supportive of change
Source: What’s Next in Business Terrain
-Business leadsBusiness leads-Systematic thinkingSystematic thinking-Inadequate Infra.Inadequate Infra.-Climate changeClimate change-Better energy Better energy policiespolicies
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““Past global shifts”Past global shifts”
30,000 B.C.
1900
1960
2000
Agriculture AgeAgriculture Age
1840
Industrial AgeIndustrial AgeDigital Language
Oral Language
- Physics revolutionPhysics revolution- Higher productivityHigher productivity- PetrochemicalPetrochemicalDrawing Language
Written Language
Genetic code
Information AgeInformation Age
-GlobalizationGlobalization-ProductivityProductivity-New business New business modelmodel-Knowledge Knowledge economyeconomy- Mendel experimentMendel experiment
- Wave TechWave Tech- Resource-based - Resource-based productionproduction
5 : 15 : 1
390 : 1390 : 1
1000 : 11000 : 1
10 / 47““Things in what direction we are Things in what direction we are moving”moving”
2000
2002
2004
2006
2008
2010
2012
2020
ScientificRevolution
Biology
Physic-Cosmological constant
Chemistry
IT/ Knowledge divide
New Productivityby Knowledge
Climate change
Global Labor for Services
Geo-Politico-Economic reshape
Global Lifestyle
33rdrd Shift Shift
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Economic paradigm shiftsEconomic paradigm shifts
Resource-based Resource-based GrowthGrowth
Innovation-driven Innovation-driven GrowthGrowth
Scarcity of resources Scarcity of resources & diminishing returns& diminishing returns
Abundant of Abundant of knowledge and knowledge and increasing returnsincreasing returns
Perfecting the known Perfecting the known in stable environmentin stable environment
Imperfectly seizing Imperfectly seizing the unknown in the the unknown in the era of discontinuous era of discontinuous changechange
YesterdayYesterday Today & TomorrowToday & Tomorrow
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““Global Scenario to 2020”Global Scenario to 2020”
Navigating Niches
Barriers
CommonWealth
CapitalWisdom
Global IntegrationGlobal IntegrationLess
Mar
ket
Do
min
atio
nM
arke
t D
om
inat
ion
LessMore
More
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Trends of Economic DevelopmentTrends of Economic Development
1950 1960 1970 1980 1990 2000 2010 2020
ComparativeAdvantage
CompetitiveAdvantage
AdaptiveAdvantage
Understanding marketplaceUnderstanding marketplace
Developing productsDeveloping products
Understanding the worldUnderstanding the world
GrowthGrowth
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Wind of Change...Wind of Change...
"It is not the strongest of the species
that survives, nor the most intelligent;
it is the one that is most adaptable to
change.“
Charles Robert Darwin (1809-82)
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Key success factors in KBE...Key success factors in KBE...• Focus on Fundamentals
– Quality of government bureaucracy– Quality of people– Quality of physical and technology
infrastructure• Looking Outward
– International orientation• Respond and Reinvent
– Turning disadvantage to strength – Turning danger to opportunity
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Global Global TrendsTrends
InternalInternalAssessmentAssessment
Thailand’sThailand’sDreamsDreams
““Visioning Thailand”Visioning Thailand”
“Outside-In” “Inside-Out”
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Thai Thai EconomyEconomy Strategic Gap I
“Get out off the Crisis”
KnowledgeEconomy
Next Level of Global Competition
Current Level of Global Competition
Economic Crisis
Strategic Gap II“Our Competitive Position in the New Economy”
Where are we now?Where are we now?
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Sources : 1. IMD survey data of 49 countries 2. WEF survey data of 75 countries
Where are we now?Where are we now?Rank of Thailand’s CompetitivenessRank of Thailand’s Competitiveness
31
41
36 3538
34
1821
30 3033 31
2540 2541 2542 2543 2544 25455050
4040
3030
2020
1010
11
WEFWEF
IMDIMD
1613 14 13
New IMDNew IMD
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Determinants of CompetitivenessDeterminants of Competitiveness by IMDby IMD
Source: IMD World Competitiveness Yearbook, 2002
Where are we now?Where are we now?
2540 2541 2542 2543 2544 2545
Overall
Economic
Government
Business
Infra
5050
4040
3030
2020
1010
11
38
3432
27
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4 (4)3 (7)
21 (23)27 (30)31 (33)61 (48)67 (63)
SingaporeTaiwanS.KoreaMalaysiaTHAILANDPhilippinesIndoneasia
CountryCountry OverallOverall
17 (18)2 (4)
18 (9)26 (22)41 (39)52 (40)65 (61)
TechnologyTechnology
7 (6)27 (24)32 (43)33 (38)39 (41)70 (63)77 (65)
Govern’tGovern’t
1 (1)6 (15)10 (8)
20 (20)11 (16)32 (28)53 (41)
EconomicEconomicEnvironmentEnvironment
Source : The Global Competitiveness Report, 2002 ( ) : Rank in 2001
WEF Ranking in 2002WEF Ranking in 2002
Compare to others…Compare to others…
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““Our stocksOur stocks””
FinancialFinancialCapitalCapital
PhysicalPhysicalCapitalCapital
HumanHumanCapitalCapital
SocialSocialCapitalCapital
-The most The most important factor important factor in KBEin KBE
-Supporting factorSupporting factorthat was underutilizedthat was underutilized
-Natural resources Natural resources less criticalless critical-Technology infra. = Technology infra. = investing for futureinvesting for future
-Triumph the Triumph the capitalism worldcapitalism world
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Economic powerEconomic power
Financial Financial CapitalCapital
• Effectiveness of
direct taxation and
collection
• High saving rate
StrengthsStrengths WeaknessesWeaknesses• Low access to finance for business
• Rely on factors of production (capital and technology) from abroad
• Depend on 3 major export markets (USA EU Japan)
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Investment for future...Investment for future...
Physical Physical CapitalCapital
StrengthsStrengths WeaknessesWeaknesses
• Bio-diversity • Availability of Infrastructure (comparing with other competitor countries)
• Limited accessibility to technology
• Limited value added R&D
• Inefficient utilisation of ICT infrastructure
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..To surf knowledge economy.....To surf knowledge economy...
Human Human CapitalCapital
StrengthsStrengths WeaknessesWeaknesses
• Abundant workforce
• Wages and fringe benefit for workers are good
• Low mobility of skilled labour
• Poorly educated workers/ high unemployment rate
of youth workforce• Lack of skilled labor/ low labor productivity
• No incentive for learning new technology/ creativity
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Low leveraged supporting factorLow leveraged supporting factor
Social Social CapitalCapital
StrengthsStrengths WeaknessesWeaknesses
• Low cost of living
• Non-discrimination
• Unique culture and tacit knowledge
• Inadequate health care service
• High openness without internal immunity
• Highly expanding urbanization resulting in social and environmental problems
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“Efforts and
courage are not
enough without
purpose and
direction.”
John F. Kennedy
What direction we are heading…What direction we are heading…
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Dare to Dream…Dare to Dream…“Imagination will carry us
to worlds that never were.
But without it we go
nowhere.”
Carl Sagan
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whole new world
3.3. World Leader World Leader in Niche Marketsin Niche Markets
6.6. Society of Society of Cultural Pride with Cultural Pride with
Global SenseGlobal Sense
2.2. Active Active International International
PlayerPlayer
5.5. EntrepreneurialEntrepreneurialSocietySociety
7.7. Country of Country of Decent EnvironDecent Environ..
for Livingfor Living
1.1. Economic Economic DevelopmentDevelopment
PlatformPlatform
4.4. Innovative Innovative Nation with Wisdom Nation with Wisdom andand Learning BaseLearning Base
Thailand’s DreamsThailand’s Dreams
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ProductiveProductiveBusinessBusiness
SectorSector
Fair Fair IncomeIncome
DistributionDistribution
SustainSustainEconomicEconomic
GrowthGrowth
1. Economic Development 1. Economic Development PlatformPlatform
-Dual-Track ApproachDual-Track Approach-Global reach, Local linkGlobal reach, Local link-Sound economic Sound economic
foundation and foundation and
environmentenvironment-MacroeconomicMacroeconomic-InfrastructureInfrastructure-LegalLegal
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2. Active International Player2. Active International Player
Country LevelCountry Level
Business LevelBusiness Level
encouraging cooperation to balancing power of the existing world order -Global : WTO, Strategic Partners-Continental : ACD, APEC, Asian Fund -Regional : ASEAN-Neighbor : GMS, IMT-GT
linking investment and production in the region-Thailand Overseas Investment
31 / 473. World Leader in Niche 3. World Leader in Niche MarketMarket• Kitchen of the World : Ready-to-Eat
Food, Spicy Food, Tropical Fruits / Finest and Healthiest Cuisine
• World Health Service Centre : Alternative Medical Care & Herbal Products
• Detroit of Asia: Pick Up Production
• Asia Tourism Capital : Regional Tourism, Aviation Transport Hub, Convention and Exhibition Centre
• Asia Tropical Fashion : Finest Hand-made Fabric
32 / 473. World Leader in Niche 3. World Leader in Niche MarketMarket• World Graphic Design and Animation Centre
: Regional Centre of Design & Technology Services
• World Furniture Mart : Finest Home Decoration/ Wooden Furniture & Handicrafts
• World Hospitality International School
• World Leader in Rubber and Rubber products : Automobile tires
33 / 474. 4. Innovative Nation with Innovative Nation with Wisdom and Learning Base Wisdom and Learning Base
• Continuous investment in R&D and technology and extending the frontiers of knowledge
• Well environment for attracting and stimulating innovation
• High accessibility to knowledge and information across the nation
• Fluent English as a second language
• Possessing strong learning basis :- Passion for reading, Better accessibility to cheap but good
books
- Thinking school with innovation movement
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5. Entrepreneurial Society5. Entrepreneurial Society
• Sound environment for business formation and development : Capital, Regulations
• Commercial oriented production
• High start-up business rate
• Venture Capital takes financial support role
• Fair competition arena
35 / 47 6. 6. Society of Cultural Society of Cultural Pride with Global SensePride with Global Sense
• Appreciate our cultural identity
• Willingness to learn and share other cultures
• Strong social institutions
• Peaceful and non-discriminatory society
36 / 47 7. 7. Country of Decent Country of Decent Environment for LivingEnvironment for Living
• The best place to live and raise the family
• Thai citizen and businesses are well
conscious of environment and natural
resources preservation
• Efficient mechanism for managing and
utilizing natural resources
• Effective policies of sustainability
regulations
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Dare to Do…Dare to Do…"Vision without action is merely a dream.
Action without vision just passes the time.
Vision with action can change the world."
Joel Barker
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What have we done?What have we done?
2000
2010
2020
2002
2003
National National competitiveness competitiveness committeecommittee
2004
-7 Dreams-Restructuring Budget-PM meets Private
Michael Porter’s studyMichael Porter’s study
Institute of Institute of CompetitiveCompetitiveStrategyStrategy
-Foundation for competitiveness -Cluster strategy
3 Strategic Modules3 Strategic Modules
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Strategic ApproachStrategic ApproachDeliverables
• Vision and Goals and high level Targets
• Strategies and initiatives• Implementation roadmap• Detailed Target and measurement
• Implementation Master Plan• Implementation structure and
system to monitor implementation
• Progress/result measured• Additional initiatives emerged• Implementation making impact
I. Translate Dream to Vision and Goals
II. Develop strategy and initiatives
III. Implementation setup
V. Monitor and feedback
Qu
ick
win
s
• Initiatives being implementedIV. Implement
Phase
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Competitiveness BlueprintCompetitiveness BlueprintI. Translate Dream
to Vision and Goals
II. Develop strategy and initiatives
III. Implementation setup
Develop dream
Define Vision and Goals
Conduct analysis on
pending issues
Generate gap closure options
Review existing strategy
Develop integrated Implementation Master
Plan and Targets
Monitor implementationIdentify constraints
and solutionsMobilize resources
for solutions
Identify governmen
t champions
Define Key
Success
Factors
Develop structure to manage overall implementation
IV. Implement Implement initiatives
Define development framework Develop
initiative action plan and targets
Review external factors
Benchmark
Review internal capabilities
Co
mm
un
icat
ion
Sim
ula
tio
n m
od
elin
g
Develop strategy
Develop integrated strategy
Develop initiatives
Review ongoing/ planned
initiatives
Draft overall implementatio
n roadmap
Revise Vision and Goals
Set measurement
and target
Identify and secure commitment from
‘HOST’
Define implementation structure
Mobilize team
/resourcesDefine
tools to motivate
team
Handover to team
Build public commitment
Revise Implementation Master Plan and TargetMonitor team
performance
V. Monitor and feedback
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Microeconomic Foundations of Microeconomic Foundations of
DevelopmentDevelopment
Sophistication of Sophistication of
Company Operations Company Operations
and Strategyand Strategy
Sophistication of Sophistication of
Company Operations Company Operations
and Strategyand Strategy
Quality of the Quality of the
Microeconomic Microeconomic
Business EnvironmentBusiness Environment
Quality of the Quality of the
Microeconomic Microeconomic
Business EnvironmentBusiness Environment
Macroeconomic, Political, and legal Context Macroeconomic, Political, and legal Context
for Developmentfor Development
Macroeconomic, Political, and legal Context Macroeconomic, Political, and legal Context
for Developmentfor Development
Growing the forest…Growing the forest…
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Competitiveness Agenda 2003Competitiveness Agenda 2003
• Upgrade the Business Environment
• Decentralize More of Economic Policy to
the Regional Level
• Activate Cluster Development
• Redefine the Roles of Business and
Government
• Transform Company Strategies
• Lead a Cross-National Strategy
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The parking meter A journalist
The ball point A sculptor
The vacuum cleaner
A bridge builder
The morse code The painter
Pop Quiz…Pop Quiz…
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Development platformDevelopment platform
Government
BusinessSector
People
EducationSector
-Fully creating the environmentfor innovation movement
-Value creation-Use of knowledge and best practice-Innovation & Quality management-Focused on markets and investment in productivity
-Training for employability-Cultivate skill
-Employ an innovation mindset-Learning differently-not just qualifications, but a questioning mind, passion and drive-not just leaders, but every level
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• Cooperate for clustering
• Go competition
• Think outside-in and globally
•Play an proactive role in development
• Value creation
• Use of knowledge and best practice
• Innovation & quality management
• Opportunities acquirer
• Employ an innovative mindset
• Crave the questioning mind, passion, and drive
• Learn differently
•Learn
•Relearn
•Unlearn
IndividualIndividual BusinessBusiness AssociateAssociate
“People who fail not because of crises... but because they run out of ideas.”
Cruise through the knowledge Cruise through the knowledge economy...economy...
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"The important
thing is not to stop
questioning."
Albert Einstein
Any Question?Any Question?