Secretary-general Satit Chanjavanakul said last week that Thailand faces a shortage of skilled workers and capital to boost industrial competitiveness against other countries.

Besides granting general incentives to investors in the coming year, the BoI will specify which industries or technologies the government should promote by providing more privileges to them, he said.

"We will propose to our board to approve the new privileges for industries that are interested in expanding their investment for research and development," he said.

More details could not be disclosed for the new R&D tax breaks as the board has the final say on their make-up before they are announced to the public, he said.

The industries with potential to evolve into technology- and innovation-based industries include automobile, electronics, machinery, moulding, printing and agro-business, he said.

The BoI will not estimate the volume of direct investment for next year but will focus on the quality of investment in terms of projects that develop the country's productivity and offer new technology and innovations for the country.

In the first 11 months of this year, BOI approved project applications from both local and foreign investors worth Bt471.5 billion and expects investment volume to reach Bt500 billion for the whole year. That is lower than the Bt685 billion recorded last year.

Deputy Industry Minister Piyabutr Cholvijarn said his ministry supports the BoI policy. It has proposed a budget of Bt514 million for the current fiscal year to design a model scheme for industry that will boost productivity, upgrade human resources and develop intellectual property.

Of the budget, Bt400 million will be spent on training up to 300 researchers to support the priority industries, including auto parts, machinery, electronics and textiles. The remaining Bt114 million will be used to draw up a master plan to raise industrial productivity so that in the long run local industries can compete with foreign rivals.

When local industries can develop their own technology, that will help reduce imports and spawn new products to market in the future.

"If we develop technology by ourselves, Thailand will be a knowledge base for science. That will improve our edge against other countries that are now developing themselves to compete with us," Piyabutr said.

"If we start now, within five to 10 years from now, Thailand will be transformed into a technology and innovation provider, rather than a buyer of technology from developed countries," he added.

Chalida  Ekvitthayavechnukul,

Somluck Srimalee

The Nation.