Rocky path towards R&D improvement

That shows an improvement on the meagre 0.12 per cent in 1996.

Yet the ratio is still dismal compared to the global average. Between 1996 and 2012, global R&D spending increased from 1.99 per cent to 2.17 per cent of GDP, according to the World Bank. Notably, spending in many countries – especially high-income nations – was higher than that average. For example, in 2012, the figure in the United States was 2.81 per cent, in Germany 2.88 per cent, for Switzerland 2.96, in Japan 3.34, in South Korea 4.03 and in Israel 4.25 per cent.
Across East Asia and Pacific, the average rose from 2.26 per cent to 2.55 per cent, while rich countries in the OECD saw their average increase from 2.14 to 2.47 per cent.
At an event hosted by Bangkok Bank last week, Science and Technology Minister Pichet Durongkaveroj admitted the path to improving the nation’s R&D had hit obstacles ranging from policy, political will, bureaucracy and education.
He is convinced though that the road ahead is rosy, given initiatives introduced in the past two years reflecting the military government’s strong political will. Companies are now encouraged by tax incentives to invest in R&D, and some 200 academics have been freed to serve the private sector. 
But what’s missing from the scene, says Pichet, is action by the private sector. An absence of encouragement from private companies means that not enough Thai students are pursuing studies in science and technology, since they don’t see a clear career path ahead.
Pichet’s diagnosis is accurate. But we have to admit that Thai companies, about 600,000 in total, are operating from an unequal knowledge base. Many are still struggling financially and thus see the need to invest in the future as an unnecessary luxury. Only certain large companies, most of them dealing with international markets, see the value of R&D for their future income. Among them are Thai Union Group, Mitr Phol and Siam Cement.
At the Bangkok Bank event, former SCG president Kan Trakulhoon helped Pichet beat the drum for more R&D spending. SCG has benefited greatly from such investments, with innovative products helping to boost margins and sustain profits even amid a volatile global economy. With raw cement fetching just Bt2 per kilo, SCG has initiated research with Mahidol University to create dental plaster that sells for Bt1 million per kilo.
Supporting the government’s goal to boost national R&D expenditure to 1 per cent of GDP this year, Kan said this would be a key milestone.
Yet he also admitted that despite SCG’s vast financial resources, it had failed to meet targets on R&D spending. Last year only Bt3.6 billion of the Bt5 billion budget was used. And this is in a company where 116 full-time employees have doctoral degrees.
In this regard, smaller companies need government guidance. For example, while the Thailand Research Fund has freely offered its findings over the past few years, the research details remain difficult to digest for those in business.
In consultation with the private sector, the government should also work out a desirable economic development path that will help guide what kind of research the country needs.
Here, Thailand can learn from Singapore, which has set its sights on becoming an R&D hub for aerospace, medical technology and other sectors. For more than a year and a half, Singapore has been engaged in an initiative to become a centre of R&D for additive manufacturing, to add value to rubber products.
In Bangkok last week, Prof Low Teck Seng, head of the Singapore National Research Foundation, revealed that several small Singaporean firms in tiers 2 and 3 of the aerospace supply chain for giants like Boeing and Airbus are being grouped with researchers and boosted by government incentives.
He highlighted the need to create a supportive environment that harnessed academic research networks from leading universities. With a small population of around 5 million, Singapore does not have a sufficient number of skilled science-and-technology workers. But with a five-year government budget of 19 billion Singapore dollars (Bt493 billion) authorities are busy launching schemes that will change that.
The Singapore Institute of Technology has teamed up with Singtel to train cyber-security experts. Meanwhile the Industrial Enterprise has been funding up to 60 per cent of students’ living expenses at Singapore Management University, the National University of Singapore (NUS), Nanyang Technological University and five polytechnics. This year, the government-funded Young Talent programme (YTP) has been launched to expose tertiary students to the market and train them in relevant skills.
Thailand has a similar scheme, called “One District One Scholarship”. Yet, the scholarships go to students from poor families and those pursuing studies in science. And though there are over 3,000 Thai students on these scholarships, there is no information on how many of them are graduating into bright career paths.
Pichet was correct in saying that more investment in R&D to improve products and services would help Thai companies “sustain and prevail no matter what government is in power”.
But he might have to admit that it is the government that has to do a lot more if this vision is to be achieved, and the Thai economy sustained in the future.