For those aged over 50, the business world has evolved at a dizzying pace over the past two decades.
Since the 1997 financial crisis, the terms “entrepreneur” and “small and medium-sized enterprises” (SMEs) have become buzzwords, as tens of thousands of white-collar workers were forced out of jobs only to turn things around and create their own businesses. It was a whole new world for the Thai worker, who had been taught to build a career path as an employee.
With the introduction of smartphones 10 years ago, more new business opportunities sprang up. Most are grabbed by the young generation, who are more familiar with technology-driven services and products. SMEs have become yesteryear’s trend, replaced by “startups” – a small business that can be quickly scaled up thanks to innovative products and services, allowing an exit strategy for its founders. And the creme de la creme are those involving financial technology.
This trend is now reshaping Thai business and the financial industry. Among telecom companies, Total Access Communication is taking the lead by luring young talent with its accelerator programme. The Thai government has turned a serious eye on startups, banking on their capacity to lead the economy in the coming decades.
The trend has also hit other Asian countries, inspired by the success of the United States which continues to dominate the global economy with technology often created by small enterprises with big ideas. The movement is gaining momentum even in Myanmar, one of the least developed economies in the world. Project Hub Yangon opened the first co-working space in Myanmar in 2013 and has since turned itself into a startup incubator. The breeding ground has spread further with “Seedstars Yangon”, a contest in which tech startup Digital Royal Net, which creates “E-School” software for school management, raised US$1 million in funding.
In India, promoting startups has become a mission for the government, which sees them as the main vehicle to absorb the 13 million workers who enter the market every year. A mobile app is in place to smooth startups’ interactions with the government, and those with creative products can dip into the annual public funding pot of $1.5 billion.
In Thailand, SMEs have complained about access to funding, but it is a different story for startups with attractive innovations. Two years ago, Thai startups mostly relied mostly on overseas funds, pitching for investment from venture capitalists and so-called angel investors. By one estimate, they raised a total of US$25 million from pitching sessions in 2014, and that figure nearly doubled in 2015.
Now, a few Thai banks have established their own fintech units. Lacking the same, other banks are nevertheless ready to extend loans to startups that present them with interesting innovations.
At “Startup Thailand” – an extravaganza hosted by the Science and Technology Ministry in Bangkok, Chiang Mai, Khon Kaen and Phuket, small firms laid out a showcase of innovations.
Several visiting foreign experts said that the success factor for startups lies in innovation that is universal. Think about mobile banking, which was designed mainly to assist South African people’s financial transactions via mobile phones when bank branches were few and far between. Nowadays, it is a basic service across the world. To such services, the Thai or even Asean market offers limited opportunities compared to what they can find in wealthy Europe or the US.
A few startups are on that path. One is launching a mobile app, allowing car owners to detect engine malfunctions or test battery life.
Another, Jitta, is selling a mobile app for stock investors in the US, Singapore and Thailand. It enables investors to learn about top stocks that tend to offer higher gains in a specified period. The company’s target is 200 million stock investors across the world, with investment totalling $200 trillion.
The opportunities are huge and the Thai government is apparently going in the right direction. There is one concern, though – and it has a lot to do with the Thai education system. While studying at Thammasat University three decades ago, I was chased out of a classroom for not writing down what the lecturer said. Can anyone confirm that this authoritarian rote learning is a thing of the past?
To successfully engage with the burgeoning startup industry, university students are the first who need to be innovative. However, in a recent survey by JobThai.com, about 37 per cent of over 10,000 university students said they needed more training in languages, mainly English, Chinese and Japanese. A total of 15.6 per cent showed no confidence in their basic skills, for example those involving Microsoft Word or Excel. Can we convince ourselves that, simply with mobile phones in hand, these students will automatically be ready to reap the benefits of the Digital 4.0 era?
It should be noted that not all Thais pursue their education to university level. In terms of secondary school enrolment, Thailand is ranked 53rd among 60 economies, indicating that many Thai workers will enter the labour market with low-grade education. That makes me nervous: as some accelerate to new opportunities, many will be left behind. It is clear that not all Thais are in the same “digital” vehicle.