A good opportunity for driving Thai innovation

The response from many foreign firms and governments, however, was lukewarm at best. Many saw the policy as a way for Chinese firms to gain access to highly prized intellectual property through requirements that would force joint-venture partners to set up local R&D centres, transfer technology and register the global trademarks in China.
Only technologies produced within these regulatory frameworks would be considered indigenous, a status which would bring entitlement to other incentives.
Some of these requirements have been revised and softened over the past five years in an attempt to make the policy more amenable to foreign tech companies. However, the general level of anxiety felt by many of those firms has yet to ease significantly.
So what are the implications of this policy on innovative Thai companies? I believe the local effects of Beijing’s strategy are two-fold.
First, Thailand is in desperate need of a policy that really prioritises local technological innovation. The Kingdom does boast world-class robotics and cybernetics engineers, software designers and a nascent animation industry. However, the real success stories are few. These fields are likely to remain in a fledgling state, along with numerous other technological sectors, until they receive a great deal of support in terms of an integrated government policy that delivers operational and financial incentives for companies to set up here. The policy would also need to ensure our colleges and universities develop the specialist courses needed to upgrade the skills required by innovative industries.
Thailand is not short on innovation, ranking 48th in the Global Innovation Index 2011. Other recent research found that the Kingdom is one of the region’s most innovative countries, but that this innovation is driven by necessity, rather than entrepreneurial spirit. Lots of people set up their own companies and side-businesses to help make ends meet, rather than to realise a groundbreaking idea or product innovation.
However, as developing and implementing a policy to make a real difference to domestic innovation will take time, we should perhaps look at the second implication of Beijing’s strategy. Given that Thai tech firms have yet to establish themselves in real terms on an international level, China’s indigenous innovation policy could provide a mid-term solution for local companies to gain regional and international footholds.
Any company that embarks on a joint venture that may require it to share its intellectual property and register trademarks locally needs to enter the agreement with its eyes wide open. That said, opportunities and risks vary greatly on a case-by-case basis. Tech giants with established global products and brands and R&D programs costing millions of dollars may feel they would be giving a lot more than they could possibly gain from such an agreement. On the other hand, a Thai firm with strong ideas, but little market exposure and low levels of investment capital, may consider the rewards of partnering a Chinese firm – giving it access to the world’s largest domestic consumer market and a greater chance of global or regional exposure – to outweigh the risks.
Thailand’s relative proximity to China, and the fact that the Kingdom will be part of the Asean Economic Community when it is established in 2015, may offer other opportunities that can be taken by strengthening ties with our northern neighbour.
At the end of the day, all innovation starts with an idea, which is then researched and developed if it is seen as viable. Given that local support for tech firms is relatively limited, perhaps exploring whether or not Beijing’s policy can provide opportunities for Thai companies to leapfrog development is an innovative idea worth putting to the test.