THE GOVERNMENT’S Thailand 4.0 economic model envisions the transformation of the country into a digitalisation-driven economy centred on innovation and knowledge.
Thailand 4.0 policies will have a major impact not just on traditional business and operational processes in the manufacturing sector, but crucially on its current and future workforce.
Thailand houses one of the strongest manufacturing bases in the Asean region, with its automotive manufacturing sector ranking 12th largest in the world and the largest regionally. Manufacturing has long been a benchmark of economic vitality. But the manufacturing sector is undergoing radical structural changes with the onset of new technologies, which have not only changed factory production processes with automation and robotics, but also consumer expectations of manufacturing’s end-products.
Various programmes could be implemented to develop Thailand’s manufacturing workforce of the future.
Impact of the Experience Economy: Manufacturing is now being driven by the “Experience Economy”, where the quality of the customers’ experience of a product is going to be the key differentiator for success, rather than the make of the product per se. To thrive in the age of the Experience Economy, Thai manufacturers have to move away from the traditional production-based business model to an innovation-based business model.
As automation technologies become more accessible for manufacturers of all sizes, repetitive tasks in production are being increasingly automated to fulfil time-to-market demands amid fast rising competition. The skills of the current workforce of manufacturers, large and small-medium sized alike, need to evolve away from execution of linear production workflows to management of complex new work plans focused on delivering customer value.
People are at the heart of successful business transformation. For businesses to thrive in the “Thailand 4.0” era, they require a workforce not just with technical expertise to harness digital technologies effectively, but the ability to innovate, create and manage new solutions.
In training the current workforce and recruiting the future workforce, businesses need to focus on skills that artificial intelligence and automation cannot replicate. According the World Economic Forum’s “The Future of Jobs” 2018 report, the top three skills of future industry will be complex problem-solving, critical thinking and creativity. Among the range of jobs set to experience increasing demand in the future are data analysts and scientists, software and applications developers and e-commerce specialists.
However, the chronic shortage of people with these skills crucial to the Digital Age is potentially the stumbling block to the sustainable growth of Thailand’s manufacturing sector and overall economy. If current conditions persist and the labour deficit grows, so will the quantum of unrealised revenues stemming from the inability of manufacturing businesses to transform digitally.
Transforming the workforce: Leaders across production and value chains need to drive business transformation by elevating and enabling their workforces. This entails putting people at the centre of the business, to cultivate their mindsets and skill sets away from repetitive production work, which is fast being automated, and towards becoming “makers and innovators” of their products, rather than just producers.
While it is tempting to point to technology as the key differentiator for business success of future industry, ultimately an organisation’s competitive strength lies in its workforce. For technologies to be deployed effectively, they need to be programmed and operated by skilled people.
Responsible leaders in manufacturing must make enabling workers their top priority, and in doing so, will be in a better position to accelerate growth and value for their organisation, individuals and communities. Already Thailand’s manufacturing sector is rapidly losing the “low cost” advantage to other rising manufacturing hubs in Vietnam, Myanmar, Cambodia and Laos. The only way to maintain competitiveness is to move up the manufacturing value chain which will require “makers and innovators” in the workforce.
However, given the accelerated rate of technological progress demanded by the Experience Economy, formal education alone is not enough to create Thailand’s future workforce of makers and innovators. Leaders from industry, government, labour unions and academia must forge new multi-stakeholder partnerships to develop industry-relevant education and training programmes to ensure the continued employability of the current workforce and cultivate the workforce of the future.
Whether it is filling the existing talent pipeline, delivering compelling employee value propositions or protecting workers’ interests, each stakeholder group can contribute to building a robust and inclusive industry ecosystem to transform the workforce.
In addition to cultivating new skills in the internal workforce, Thai manufacturers should also look towards developing an agile external workforce strategy to find, attract and recruit new digital specialists, the type of talents typically drawn to global technology companies. To do so, Thai manufacturers must increase their attractiveness and develop creative ways to engage with these talents by cooperating with universities and research institutes, or forming partnerships with leading technology companies.
Importantly, business leaders need to take on new mindsets in solving the complex challenges of a rapidly transforming workforce.
A lifelong process: My advice to manufacturing businesses is that the time to act is now to plan and implement a people transformation strategy. Thailand’s manufacturing sector, amongst all its S-curve industries, is the most vulnerable to changes brought forth by globalisation. Developing the manufacturing workforce of the future is not for the distant future, but for now, because the whole sector is already in the midst of digital transformation.
Workforce transformation is not just about adopting new technologies and adding new digital talent; it goes together with an enterprise-wide transformation of existing values, mindsets and practices. Manufactur-ing businesses will need to be much more conscious of how they on-board and train their workforce, which will be a continuous process, not just at the start of careers, but throughout the lifecycle of careers.
Contributed by ERIC CHOW, academic lead for Asia Pacific South at Dassault Systemes.