There is strong potential for high value-added growth in the advanced agriculture and biotechnology sector and food-for-the-future sectors in Thailand. These are both potential future driving sectors of the Thai economy, prioritised by the Thailand 4.0 Strategy. Successful development can be driven by Thailand’s strong and successful investments in public R&D in biotechnology directed towards discovering products and processes that can add value to existing agricultural production capacities in market niches with growing international demand. Key areas of potential include healthy, medicinal and functional foods and cosmetics. However, the exploitation of R&D results in the market is held back by limited numbers of start-up and scale-up enterprises involved in innovation and exporting in these fields.
A key thrust of Thailand’s approach to address the R&D exploitation bottleneck in advanced agriculture and biotechnology and food-for-the-future, and in the other priority sectors in the Thailand 4.0 Strategy, should be making connections between universities, science parks and research organisations and existing and potential start-ups and scale-ups and building up the absorptive capacity of these firms.
Together, Chiang Mai and Chiang Rai are a potential regional stronghold in Thailand in advanced agriculture and biotechnology and food-for-the-future products. They have substantial agricultural production in rice, fruits, vegetables and organic products where value can be added by incorporating biotechnology innovations. They also have regional universities and science parks working actively in biotechnology and related research, which can provide industry with access to public research results. However, more support is needed to provide the right growth-oriented finance and advice to potential and existing start-ups and scale-ups, and to create the right links to relevant innovation sources.
These policies need to address the following issues:
Finance. Private equity, angel investing and venture capital funding are still in the nascent stage. Government support programmes largely emphasise traditional debt finance and are insufficiently targeted on innovative start-ups and scale-ups.
Skills. There are skills shortages in business and innovation management and untapped opportunities for ambitious entrepreneurship among women and university graduates.
Regulations. A lack of standardisation and delays in health product licensing are a barrier for start-ups and scale-ups to exploit new biotechnology-based products.
Business advice. Existing government-supported business advice is modelled on basic services for the typical micro firm and not sufficiently deep for innovative start-ups and scale-ups. Technology development advice is not well integrated with business development advice in complementary areas for company development including marketing and management strategy.
Foreign direct investment. Chiang Mai and Chiang Rai have yet to attract significant FDI and few relationships have been created between the existing FDI operations and regional SME suppliers or research institutions.
Cluster support. Despite having several small-scale networks of local firms (including Food Valley) and tax incentives for R&D investments in advanced agriculture and biotechnology and food-for-the-future (through Food Innopolis), Chiang Mai and Chiang Rai lack a unified regional cluster management organisation with associated funding for cluster management agents, cluster development projects and cluster network building.
