Bangkok: Stop relying solely on handouts! A Thammasat economist suggests the "Reduce-Increase-Continue" formula to revive declining businesses, and reveals the secret of the 3-1-1-3 formula that explains why people in rural areas still find it difficult to become wealthy.
According to Thai News Agency, the current economic situation in Thailand is being viewed through drastically different lenses. Associate Professor Dr. Kiatianan Luangkaew, a lecturer from the Faculty of Economics at Thammasat University, analyzes that Thailand is facing an overlapping picture: being structurally "the sick man of Asia"-a situation that hasn't changed for over 30 years-and becoming a "rising star" with hidden potential as an ASEAN logistics hub and possessing strengths in the healthcare and agricultural sectors.
The post-COVID-19 Thai economy clearly exhibits a K-shaped pattern. Only a small percentage of businesses have been able to leverage digital technology for rapid growth, while the majority are weak and in urgent need of assistance. This declining group accounts for a significant portion of the country's employment, and if left unchecked, could lead to social inequality and a long-term financial burden on the government.
For businesses in a downturn, Dr. Kiatanan proposes the "Reduce-Increase-Expand" formula for adaptation to slow the decline and prepare for a comeback. This involves cutting unnecessary items, utilizing technology to increase competitiveness, and developing both the business model and the skills of people within the organization.
Additionally, the structural problems hindering provincial economic growth stem from distortions in the proportion of production and labor, known as the 3-1-1-3 formula. This highlights the disparity between the manufacturing and agricultural sectors, emphasizing the need for sustainable regional economic growth.
Dr. Kiatanan also pointed out the "human capital bottleneck" due to a weak educational foundation in Thailand. Many graduates lack essential skills, which could be exacerbated by the rise of AI. He warns that AI will amplify the capabilities of skilled individuals but could be detrimental for those unprepared to use it effectively.
To address these challenges, Dr. Kiatanan recommends that the government shift from blanket assistance to targeted support and prioritize supporting Thai-made basic research. Entrepreneurs are also advised to make difficult decisions to restructure their businesses to survive future changes.
In conclusion, while the Thai economy faces challenges, history shows that recovery is possible. The key is for businesses and individuals to be prepared, so they can seize opportunities when the economy rebounds.