Karel Eloot, senior partner of McKinsey
Karel Eloot, senior partner of McKinsey

Thai workforce ‘needs to be reskilled’

Economy December 03, 2018 01:00

By PHUWIT LIMVIPHUWAT
THE NATION

2,383 Viewed

SMART INVESTMENT in human resources and infrastructure are necessary to advance the Thailand 4.0 policy and develop the Eastern Economic Corridor (EEC), experts suggest.



For the Thailand 4.0 policy to effectively push for digital transformation, Thai manufacturers will need to first improve the skills of their workforce,” said Karel Eloot, senior partner of McKinsey & Company, during an exclusive interview with The Nation. 

The Thailand 4.0 policy is intended to modernise the Thai economy by promoting technologically driven industries. The development of the EEC region is a materialisation of the Thailand 4.0 policy where the government aims to turn the three provinces of Chon Buri, Chachoengsao and Rayong into special economic zones. 

“Reskilling will be needed for the existing workers. We have identified up to 7 million employees in Thailand who will need to be reskilled in order for companies to digitally transform,” he said. 

The reskilling is needed because digital transformation will mean new roles and jobs will be created while old ones will be made obsolete, Eloot explained. 

“For example, employees will need to work on automated processes that did not previously exist, or work with data analytics, which the company may not have employed before the transformation,” he continued. 

“As for the EEC region, there will be a shortage of skilled labour. The government has taken steps to address these issues, but there is more to be done,” said Somkiat Tangkitvanich, president of the Thailand Development Research Institute (TDRI), at a separate seminar on the EEC and Thailand 4.0 policy last Friday. 

“The Thai Ministry of Education has been working with the Japanese KOSEN system, a unique training system, which produces high-quality engineers,” he said. 

The Thai government is also wooing Western universities to set up campuses in Thailand, some of which have already done so such as Carnegie Mellon University. The government is currently in negotiations with the National Taiwan University for the university to set up a campus in the Kingdom, according to Somkiat.

Another method the government has implemented to increase the number of skilled workers in the country is providing Smart Visas, aimed at allowing foreign skilled workers and investors to enter the EEC region with more convenience. 

However, Somkiat revealed that this policy has had limited success. 

“The Smart Visa programme has not been much utilised. There are only about 20 to 30 people who have come into Thailand using the Smart Visas so far. Hence the Board of Investment of Thailand (BOI) is expected to loosen the requirements of Smart Visas to attract more foreign skilled workers,” he said. 

Eloot concurred, suggesting that foreign skilled workers alone will not suffice to address the shortage of skilled labour. He stated that the Smart Visas programme would have to go hand in hand with the reskilling of the existing workforce.

Apart from increasing the number of skilled labour, the Thai government should also be making “smart investments” in the EEC region, Somkiat said.

“In trying to attract foreign investment to the region, the Thai government should focus less on super-generous tax incentives and instead invest in services that improve the processes investors have to go through in order to invest in the EEC region” he continued.

In order to generate one job, the Thai government would have to invest as much as Bt5 billion per year in terms of tax revenue reduction from the super-generous tax incentives, according to a study conducted by the TDRI. 

Alternatively, the Thai government should make the process of investing in Thailand more convenient for foreign investors such as by creating a one-stop service for foreign investors who are looking to invest in the region, Somkiat suggested. 

“The Thai government should be making “smart investments” instead of focusing on the total volume of investments. They should make sure that the investments actually increase the technical and innovative capabilities of manufacturers in the EEC region,” he added.

In the first nine months of this year, Bt230.55 billion has been invested in the EEC, an increase of up to 117 per cent compared to the same period last year. The BOI maintains a total investment target in the EEC of Bt300 billion by the end of 2018, according to BOI secretary-general Duangjai Asawachintachit.