Contributions to the Kingdom's gross domestic product (GDP) from small- and medium-sized enterprises (SMEs) will be lower than expected this year because the political turmoil is adversely affecting the tourism and consumer industries, the Office of Small- and Medium-Enterprises Promotion (Osmep) said yesterday.
Earlier, SMEs were expected to contribute between 4 and 5 per cent this year, from last year's 2 per cent.
Pak Tongsom, deputy director-general of Osmep, said yesterday that political tension was shrinking domestic consumption and tourism, which is adversely affecting the growth of SMEs, one of the major engines driving the Thai economy.
Thailand's GDP for 2008 stood at Bt9.1 trillion, with Bt3.4 trillion or 37.36 per cent from SMEs.
The value of the country's exports that year was Bt5.8 trillion, with Bt1.69 trillion or 29.14 per cent coming from SMEs. Some 99.7 per cent of local businesses are categorised as SMEs, with 30 per cent of these in the trading and service sectors.
Of the Kingdom's 11.7 million labourers, 76 per cent or 8.9 million are employed by SMEs.
The government should give SMEs top priority and help alleviate their burden, as their income will be dropping this year, Pak explained.
In a bid to promote SMEs under the Thai Khemkhaeng Project, the Osmep held the "Creative Building for SMEs" seminar yesterday in Bangkok.
Under an SMEs development project, the government allocated Bt336.5 million to Osmep for the 2010 fiscal year ending September 30, to encourage entrepreneurs under the creative-economy policy.
At the seminar, participants were told that innovations with unique adaptations, marketing and quality control were the main factors fostering competitiveness and ensuring sustainable growth.
Pak said some 125 small- and medium-sized business owners would be trained to become more creative, which in turn should generate value-added revenue worth Bt200 million.
Jirabul Vitayasingh, president of the Thai Gifts, Premiums and Decorative Association, said that consumers, nowadays, change their demands very often.
Therefore, Thai producers should focus on technological innovation to ensure that products and services differentiate to serve niche markets rather than mass markets, which generate lower returns and are more competitive.
Witawat Rungruangphon, senior researcher at Thammasat University's Research and Consultancy Institute, suggested that enterprises meld creativity with local culture and the Thai style so products are more unique and attract customers.
Ayuth Taechasukij, vice president of the Institute for Small- and Medium-Enterprises Development, said SMEs should study demand in the market so as to develop products accordingly.
Copycat goods will only sell for a short period, but if enterprises study demands in the market and gradually develop their products, they will be able to ensure sustainable growth, he said.
Buddhagarn Rutchatorn, chairperson of Master of Arts in International Economics and Finance of Chulalongkorn University, said SMEs should start penetrating the Asean market and create supply chains for serving expansion.