{"id":516,"date":"2024-02-09T09:46:58","date_gmt":"2024-02-09T02:46:58","guid":{"rendered":"https:\/\/thereporter.asia\/eng\/?p=516"},"modified":"2024-02-09T09:46:58","modified_gmt":"2024-02-09T02:46:58","slug":"thailand-is-ready-for-business-but-are-startups-ready-to-thrive","status":"publish","type":"post","link":"https:\/\/thereporter.asia\/eng\/2024\/02\/thailand-is-ready-for-business-but-are-startups-ready-to-thrive\/","title":{"rendered":"Thailand is Ready for Business. But are Startups Ready to Thrive?"},"content":{"rendered":"

At the APEC CEO Summit 2023 in San Francisco, Prime Minister Srettha Thavisin announced Thailand\u2019s readiness to restart business. This sentiment was echoed by global tech giants such as Microsoft Thailand, who, at the same summit, signed a partnership with the Thai Government to transform the nation into an artificial intelligence (AI) powerhouse.<\/p>\n

With the corporate world nodding in excitement with the Prime Minister\u2019s vision, BCG X\u2014the tech unit of Boston Consulting Group (BCG)\u2014and BCG were interested to see if this enthusiasm stretched to Thailand\u2019s startup landscape. Our findings, outlined in our latest study Getting Ready for Business: Firming Up Thailand\u2019s Startup Ecosystem<\/a>, reveals a more nuanced picture for Thai startups, indicating looming challenges framed against otherwise encouraging latent potential.<\/p>\n

Uncovering Roadblocks in Thailand\u2019s Startup Landscape<\/h3>\n

Thailand\u2019s economic strength, highlighted by its thriving economy and relative share of regional gross domestic product (GDP), is not yet mirrored in its startup ecosystem.<\/p>\n

With approximately 180 publicly visible startups, the country\u2019s startup activity is modest compared to regional counterparts such as Vietnam (340), Indonesia (860), and Singapore (1,780). This difference highlights the need for Thailand to do more to support its startups. If we can overcome the challenges, closing the gap with other markets would unlock significant and lucrative opportunities for the nation.<\/p>\n

\"Startups\"<\/p>\n

BCG X\u2019s study has identified five primary challenges that hold the startup ecosystem back. Access to funding is the first hurdle. Investors such as venture capitalists (VCs) and local angels tend to look towards larger markets, leaving Thai startups struggling for early-stage capital. Local corporate VCs are also more inclined to invest in established companies rather than taking chances on new entrants.<\/p>\n

Mentorship and incubation programs are scarce, which stifles the growth of seed-stage startups in the early periods of growth. The shortage of such programs limits access to valuable guidance and support.<\/p>\n

Operational infrastructure is another area where Thai startups face difficulties. Essential services that startups need to function, like human resource (HR), legal, and accounting, are not just limited but also costly, affecting startups\u2019 ability to operate efficiently and innovate.<\/p>\n

The competition for talent is also fierce. Startups find themselves vying alongside larger corporations for a limited pool of tech and sales professionals. This talent gap often leaves startups unable to meet their staffing needs.<\/p>\n

Finally, credibility is a barrier for Thai startups seeking customers and partnerships. Without the backing of strategic investors or a proven track record, gaining trust and meaningful partnerships are uphill battles.<\/p>\n

The compound effect of these challenges creates a barrier preventing the Thai startup scene from taking off.<\/p>\n

\"Thailand<\/p>\n

How Can Collaboration Transform Thailand\u2019s Startup Landscape?<\/h3>\n

Despite its challenges, Thailand\u2019s startup ecosystem offers plenty of opportunities as indicated by respondents interviewed as part of BCG X\u2019s study. These respondents come from sectors well-positioned for innovation and growth such as Industry 4.0, software (in general), fintech, business-to-business (B2B) marketplaces, and climate tech.<\/p>\n

The country\u2019s large population, high digital adoption rates, and growing share of middle-class consumers make Thailand a fertile ground for innovative services and products. As age groups and buying power shift, the appetite for startups that can deliver new business models and solutions grows.<\/p>\n

Creating a vibrant startup ecosystem is key for Thailand to capitalize on these opportunities. This ecosystem should enable an environment where success breeds more success. Established startups should inspire new entrepreneurs, whose ideas mature within a strong incubation system and attract investors, setting off a chain reaction of talent acquisition, scaling, and, ultimately, successful exits that deliver encouraging returns for founders and investors.<\/p>\n

To grow such an ecosystem, stakeholders must come together in 5 key ways:<\/h3>\n
    \n
  • The Government should cultivate a more risk-taking environment, encouraging founder growth, increasing risk capital via mechanisms like matching funds or direct VC investments, expanding the talent pool, and facilitating startup exits with supportive policies and regulations.<\/li>\n
  • Universities should encourage an entrepreneurial mindset and equip the new generation with the necessary skills.<\/li>\n
  • Beyond investment, corporations should nurture startups through mentorship, provide opportunities for piloting and testing, and enable access to expansive networks.<\/li>\n
  • Past founders and industry veterans should offer their mentorship and network support, which can significantly aid startup development and scaling.<\/li>\n
  • Media agencies should play a crucial role, too, by spotlighting networking events, promoting Thai startups internationally, and enhancing their global visibility.<\/li>\n<\/ul>\n

    \"Startups\"<\/h3>\n

    Turning Thailand\u2019s Potential into Reality<\/h3>\n

    Thailand\u2019s startup ecosystem is at an exciting juncture where the opportunities are immense and ripe for the taking. While it will take the concerted effort of multiple stakeholder groups ranging from the government to academia, corporations, successful entrepreneurs, and the media, there appears to be a growing sense of optimism that Thailand can succeed. So, even if Thailand\u2019s startup ecosystem might not be fully ready for business just yet, it seems there has never been a better time to start preparing for the opportunities ahead of us.<\/p>\n

    Authors:<\/em>
    \nBenjamin Fingerle, Managing Director and Partner, Boston Consulting Group (BCG)<\/em>
    \nHanno Stegmann, Managing Director and Partner, BCG X<\/span><\/em><\/h5>\n","protected":false},"excerpt":{"rendered":"

    At the APEC CEO Summit 2023 in San Francisco, Prime Minister Srettha Thavisin announced Thailand\u2019s readiness to restart business. This sentiment was echoed by global tech giants such as Microsoft Thailand, who, at the same summit, signed a partnership with… <\/p>\n","protected":false},"author":1,"featured_media":517,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[414,37],"class_list":["post-516","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecom","tag-startups","tag-thailand"],"yoast_head":"\nThailand is Ready for Business. 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