World Bank urges skills investment to put Thailand on high-income path

Thailand needs deeper investment in education, workforce skills and human capital to raise productivity and achieve its goal of becoming a high-income economy by 2037, according to the World Bank.

The assessment was presented at the High-level Policy Forum: “Unlocking Thailand’s Future: Transforming Education and Training to Drive Productivity, Innovation, and Growth”, organised by the World Bank and Thailand’s Equitable Education Fund (EEF).

Stephen N. Ndegwa, World Bank Division Director for Thailand and Myanmar, said Thailand was entering a critical period in its efforts to achieve high-income status and would need reforms in several areas, particularly greater investment in people.

“Investing in people is one of the most powerful investments a country can make for its future,” Ndegwa said. “It creates opportunities for individuals, makes businesses more productive, enables innovation and builds the foundations for stronger growth.”

He said the world of work was changing rapidly as artificial intelligence reshaped economic opportunities, alongside the effects of climate change and shifts in geopolitics.

Thailand also faces a specific structural challenge from its ageing population, which will influence both the opportunities available to the country and the skills required to move towards high-income status.

Ndegwa said responding to these changes could not be the responsibility of any one institution, but would require participation from the government, universities, businesses and individuals.

Without further reforms, growth could remain around 3%

Luis Benveniste, the World Bank’s Regional Practice Director for People in East Asia and Pacific, said Thailand had made substantial progress over more than three decades, including higher educational attainment, longer life expectancy and a shift of workers from agriculture into manufacturing and services.

Lower-secondary education completion has risen from around half of the population to near-universal levels, while average life expectancy has increased by seven years. Thailand has also largely eliminated poverty at the US$4.20-a-day threshold, he said.

However, that progress has begun to lose momentum.

World Bank analysis indicates that without further policy action, Thailand’s potential economic growth could remain around 3% a year, a pace that would make reaching high-income status by 2037 difficult.

The World Bank’s latest development roadmap says Thailand needs to raise real GDP per capita growth to an average of 5.4% a year over the coming decade to achieve its high-income ambition by 2037. It identifies reforms to future industries, businesses, the workforce and cities as central to reaching that target.

Benveniste said proactive reforms and investment could substantially improve Thailand’s growth prospects, with workforce skills at the heart of the agenda.

Businesses cannot use advanced technologies effectively without workers capable of operating them, while industries cannot move towards higher-value production without appropriately skilled technicians, engineers and managers.

62% of Thai employers struggle to attract talent

Demand for specialists in artificial intelligence and machine learning is expected to grow rapidly, but Benveniste stressed that the rise of AI did not make foundational skills less important.

Employers also need workers who can think analytically and creatively, solve problems, use digital tools, communicate, collaborate, adapt and continue learning throughout their careers.

“Preparing Thailand for the AI era is not simply about producing AI specialists,” he said. “We also need to ensure that everyone has digital literacy and socio-emotional skills that allow them to learn new technologies and adapt throughout their lives.”

About 62% of employers in Thailand report difficulty attracting talent, compared with a global average of 37%, while employers continue to identify gaps between graduates’ skills and those required by businesses.

The World Bank and EEF have previously estimated that deficiencies in basic literacy and digital skills carry an economic cost equivalent to around THB3.3 trillion, or 20.1% of GDP.

The challenge for Thailand, therefore, is no longer simply getting people into education, but ensuring they actually learn, progress and acquire skills relevant to the economy and labour market.

Private sector calls for education to match jobs

Saravoot Yoovidhya, Vice Chairman of the Thai Chamber of Commerce and Chairman of its Education Development Committee, said businesses were operating in an increasingly difficult economic and competitive environment.

He said Thai companies were facing greater competition from foreign businesses both at home and overseas, while the country’s demographic challenge was becoming more acute as the number of births continued to decline.

With fewer young people entering the workforce, Thailand needs to improve the productivity and capabilities of the population it already has, he said.

One important response is to make education more closely aligned with employment needs and move away from the long-standing problem of graduates being unable to find suitable work.

The Thai Chamber of Commerce has therefore become involved in education from the curriculum-design stage, opening businesses to students for workplace experience and supporting equipment and budgets in collaboration with the public sector. The chamber has also been pushing for stronger links between education and labour-market demand.

Saravoot said sustained and coordinated action across sectors could significantly strengthen economic growth by ensuring that the skills produced by the education system correspond more closely with the workforce Thailand will need in the future.

Source: Krungthep Turakij