Hsieh Shen-yen
Hsieh Shen-yen

Thai Industry's Moment of Opportunity

Tech July 17, 2018 14:55

By Hsieh Shen-yen
Special to The Nation

5,866 Viewed

The world is changing, and business in Thailand must understand the drivers of this change.



This is why, as I enter my third decade in Thailand's industrial sector, I believe it is more vital than ever for every business to observe international megatrends – changes which will transform societies and influence the direction of life around the globe.

By adopting a mindset that views megatrends as opportunities, Thailand can leapfrog the regional competition, becoming a major player by creating enduring solutions to the challenges of the present and future.

In our business, we identify five major solutions that align with the mega trends shaping the world. We are shaping our business to address these trends, which include renewable energy, electric vehicle power management, energy storage, industrial automation, and data center infrastructure. We have invested heavily in these solutions, and are now on the cusp of reaping the rewards for these investments.

Among the most significant new directions is the growth of renewable solar and wind energy, as higher demand and improved production processes have lowered investment costs to the point that they are not just environmentally friendly, but also the most financially sustainable choice. Renewable capacity is increasing dramatically every year, with solar energy demonstrating an impressive 32 per cent increase in 2017, and wind at 10 per cent increase.

The first steps in widespread renewable adoption will be the introduction of microgrids based primarily on renewable energy. Since these can be connected to or separate from primary power grids, they are particularly crucial to the task of modernizing and improving the quality of life in islands and rural areas, where economic development has been hampered by unreliable electrification. Delta has entered on the ground floor of this movement by investing in components for renewable energy generators, as well as the Energy Storage Systems (ESS) which support microgrids, creating stability by storing reserve energy to be allocated where and when it is needed most.

In an ideal complement to renewable energy, electric vehicles (EVs) are at the beginning of a worldwide boom, with global sales in Q1 2018 59 per cent higher than Q1 2017, on track to make up 3 per cent of vehicle sales in December, leading to 5 million electric cars on the world's roads by year's end. Countries like Norway, where EVs make up over half of new car sales, prove that broad EV adoption is possible with the right incentives and infrastructure. New models like the Tesla Model-3 and the second-generation Nissan Leaf have launched to remarkable success in the US, Europe, and Asia. However, these models and others continue to experience production shortages as demand outstrips present manufacturing capabilities. That means that Thailand's automotive industry, the most developed in Southeast Asia, has a chance to secure its global position by shifting gears to support these companies.

As Norway's example shows, a major factor in the adoption of any new technology is its convenience. This is why Delta has partnered with governments in Thailand and India to produce electric vehicle chargers, which will provide the infrastructure needed for electric cars to take their place as the transport of the future.

These vehicles of the future will also be built in factories of the future, as industrial automation continues to expand across the world, particularly in the automotive and electronic industries which account for over 60 per cent of industrial robots in use today. Soon, however, these robots will inevitably spread to other sectors, as their sales are expected to increase 15 per cent each year up to 2020, with Asia having the biggest growth sector at an average of 19 per cent annually. Global industrial robot sales more than doubled from 2006 to 2016, rising from 112,000 to 294,000 units, and an estimated 521,000 robots will be sold in 2020.

Automated robots such as those built by Delta and used in many factories – including our own – will produce higher quality products faster, cheaper, and safer than possible by human hand. The shift to automation understandably creates some anxiety, but with the right preparation it is not to be feared. Thailand's aging population cannot indefinitely sustain an economy based on manual labor and faces an urgent need to transform to a knowledge-based Industry 4.0 economy. Automation will free humans from dangerous menial tasks while replacing manual labor with higher-skilled, better-paying jobs, key to satisfying our increasingly educated workforce.

That workforce is also transcending barriers by doing more of its business online. In 2017, global internet use surpassed 50 per cent, with the greatest gains in mobile internet. This digital growth has created an audience that is always connected even when it is geographically dispersed, and opportunities for businesses and entrepreneurs to connect with that audience abound. Cloud computing and the burgeoning Internet of Things are integrating connectedness into new areas of everyday life. All of these require ever more ability to store and process data, which is estimated to increase to 19.5 ZB by 2021, with advantages going to those companies that can make effective use of the data they store. Delta's efforts to improve the speed and power efficiency of datacenters translate to building the backbone of the web which now forms so much of the background of our lives.

The megatrends discussed above are all interrelated. Microgrids offering clean, stable energy will allow for greater electrification and internet connectedness. Automation will improve quality and reduce costs of electric vehicles and related components, leading, as we have seen with the lithium battery, to wider adoption of these technologies. Together they represent great global paradigm shifts, to which Thai industry must find smart ways to adapt. Our stability, development-friendly environment, and diverse opportunities for growth make us uniquely situated to do so. And if we do, Thai industry can light the way to the future of our region and the world.

(Hsieh Shen-yen is president of Delta Electronics (Thailand), a 30-year-old company focused on exporting innovations made in Thailand to the world.)