THAILAND’S economic future hinges on successful support for the country’s small and medium-sized enterprises, as well as new start-ups, according to Supant Mongkolsuthree, chairman of the Federation of Thai Industries.
Supant, co-head of one of the government’s 12 subcommittees in charge of reviving the economy, said in an interview with The Nation that strong SMEs and start-ups were crucial to sustainable economic growth.
Responsible for the SME sector, his subcommittee, whose members include private-sector chief executives and top government officials, is preparing an action plan for consideration by the executive committee headed Dr Somkid Jatusripitak, deputy prime minister for economic affairs.
Supant, who is also chairman of IT-equipment company Synnex (Thailand), said there were about 2.7 million SMEs and start-ups in this country providing more than 10 million jobs nationwide, but only 500,000-600,000 were registered with the Commerce Ministry. In total, these businesses are estimated to account for nearly 40 per cent of gross domestic products.
At the end of 2014, Thailand’s GDP totalled US$374 billion.
“If we want the economy to grow with stability, we need to balance it by boosting the SME share of GDP to 50 per cent in the future,” he said, adding that this was his subcommittee’s long-term target.
To achieve this goal, the sub-panel has set up three working groups, which focus respectively on established enterprises, start-ups, and a new category, social enterprises.
The start-up group is headed by the president of the University of the Thai Chamber of Commerce, Saowanee Thairungroj, while the CEO of Flynow Group, Preecha Songwattana, is head of the established-SME group.
Wiwan Tharahirunchote is head of the social-enterprise group.
The three working groups will identify business models and strategies to guide SMEs, start-ups and social enterprises into a healthy long-term future.
Basically, the experts will focus on four areas for improvement. These are marketing strategy, efficiency on how to cut costs and increase revenue, financial support for expansion, and innovation to boost business value.
“We will find a suitable business model for them to drive growth and submit our recommendations to the government via Deputy Prime Minister Somkid Jatusripitak,” Supant said.
The SME subcommittee’s findings will be integrated with those of the other 11 sub-panels. It is hoped that this will lead to a new set of measures to revive the economy.
The government targets GDP to grow by 3-3.5 per cent this year, up from 2.8 per cent in 2015.
It is estimated that the larger companies in the SME category number around 27,000, providing 3 million jobs. Of the 2.7 million SMEs and start-ups of all sizes, 600,000 are registered as various types of juristic people and the rest as individuals.
It is believed that when the country’s SMEs and start-ups are strong, they provide a cushion to the economy, especially during critical times.
Supant said most SMEs in Thailand were in the agriculture and agro-industrial sectors, which currently face an oversupply and price slumps, so they need help from the government to restructure their businesses.
“We have to integrate our findings and recommendations and work with other subcommittees to upgrade SMEs. For example, in agriculture, they need more irrigation and water-management system as well as innovative farming, marketing and other know-how,” he said.
In addition, there will be a mechanism for SMEs, start-ups and social enterprises to get help from big companies.
Supant said the government and the private sector were working hard to boost economic expansion, but bureaucrats are still reluctant because some policies require the reallocation of state budgets.
“We believe that big companies are ready to support SMEs, but we also need state budgets to finance these measures, which may affect the bureaucracy’s status quo,” he said.