SCB’s Economic Intelligence Centre lauds govt’s ‘digital economy’ move

During the past year this policy has progressed with the establishment of a Ministry of Digital Economy and Society and the drawing up of a “digital Thailand” |plan. 
The government is also accelerating the roll-out of a national broadband project. On Wednesday, the Cabinet assigned TOT to |lay down broadband Internet connections for 24,700 villages, while the office of the National Broadcasting and Telecommuni-cations Commission will handle the installation for the remaining 15,732 villages.
The EIC believes the digital-economy policy will open new opportunities to a wide range of businesses, but at the same time introduce new challenges to traditional businesses. Meanwhile, workers who lack digital skills will need to adjust to future changes.
The EIC said governments around the world had shown interest in a “digital economy”, while many were using this type of policy to boost economic growth. More than 80 per cent of Organisation for Economic Cooperation and Development (OECD) member countries, including Australia, Japan and France, have established national strategies related to a digital economy. 
Meanwhile, neighbouring Malaysia put together a development plan for its transition towards a digital economy called “Digital Malaysia” in 2012. As part of this plan, a national broadband network has been developed together with related ecosystems such as the establishment of e-government and digital entrepreneur programmes. 
After only two years of implementation, the policy has given the Malaysian economy a significant boost, with incomes from information and communications technology (ICT) industries increasing by 10 per cent per year.
Digital Thailand will also induce new investment from the private sector, the EIC believes. In the case of Britain and Canada, investment in broadband infrastructure has had a crowding-in effect of up to 10 times. This kind of investment also has a multiplier impact, making their contribution to gross domestic product up to 15 times the initial investment value. 
In view of such gains, Thailand’s national broadband network, valued at Bt15 billion, has the potential to spur a total of Bt150 billion in investment from the private sector and increase Thailand’s GDP by Bt225 billion, or 2 per cent.
However, converting traditional businesses into digital organisations can cut costs from unnecessary workloads, and increase efficiency and productivity that raise profitability in turn. A study from the Massachusetts Institute of Technology found that companies that had successfully integrated technology with their businesses were 26 per cent more profitable than industry peers. Such returns make ICT investments, which only account for 3-5 per cent of annual revenue, well justified in the long run.
Changes to jobs and employment in the digital age also need to be closely watched. A case study of OECD countries found that although overall employment and employment in the ICT sector had remained stable, demand for ICT specialists had risen steadily. 
The study showed that the ratio of the employment of ICT specialists to total employment had increased from 3 to 4 per cent over the course of only three years, while the role of unskilled labour will slowly recede. 
The OECD forecast that around 9 per cent of current employment could be replaced by technology and machinery in the future.