Bangkok: Although Thailand received positive news regarding foreign direct investment (FDI) in the technology industry amounting to hundreds of billions of baht last year, the worrying reality is that this money has not flowed to small businesses as it should have, due to the Thai economy facing concentrated growth and complex structural problems.
According to Thai News Agency, Dr. Thitima Chucherd, Senior Director and Head of Macroeconomic Research at the SCB Economic and Business Research Center (SCB EIC), Siam Commercial Bank, points out that while target industries like data centers, electronics, and cloud computing are experiencing high growth, these engines are also accompanied by very high imports. Data indicates that ten years ago, domestic production in Thailand generated up to 70% of the added value domestically, but today, the value added that benefits Thai consumers has dropped to less than half.
Furthermore, the export sector is alarmingly highly concentrated, with the bottom 1% of exporters accounting for 85% of total export value, and over 85% of that amount belonging to foreign companies. This means that the benefits accruing to employment or small Thai businesses are significantly less than in the past.
SMEs face the "non-performing loan" crisis and intense competition. While large businesses continue to grow, SME loans have been contracting for over four years. The most worrying situation is the soaring number of non-performing loans (NPLs) among SMEs, which now account for almost a quarter of all loans. Key negative factors include:
Influx of Chinese goods: Intense competition from Chinese products flooding the Thai market.
Soaring costs: The impact of the Middle East war has driven up oil and transportation prices.
U.S. Tariff Measures: Risk of being subjected to an additional 12.5% import tariff under Section 301 on grounds of overwork and production capacity.
The "Small but Mighty" Survival Strategy: Adapting to the changing world is crucial to prevent small business owners from becoming losers in this battle. Dr. Thitima recommends a three-stage adaptation strategy:
1. Short-term (Maintaining Liquidity): Accelerate cost management, adopt technology to increase efficiency, and diversify risk in suppliers and sales channels.
2. Medium-to-Long Term (Catching Future Trends): Adapt products to meet the needs of digital lifestyles and sustainability trends, as modern consumers are willing to pay more for environmental protection.
3. Utilizing government incentives: Keep an eye on investment unlocking measures and projects like "Re-invent Thailand," which attempts to impose conditions requiring foreign investors to use Thai raw materials and transfer more knowledge to Thai workers.
In conclusion, Dr. Thitima emphasized that in a rapidly changing world, "finding a solid position" is paramount. Entrepreneurs must step beyond their comfort zone, adapting to new technologies and global trade regulations. Staying stagnant in a changing world will only diminish their chances of survival.