Location and innovation ‘crucial’ to Thailand Inc’s success in fracturing world
Thai businesses must adapt to the world’s fracturing geopolitical landscape, using innovation and location to create competitive advantages, Vice Foreign Minister Vijavat Isarabhakdi told industry leaders on Monday.
Vijavat was speaking at the seminar “Geopolitics: The Big Challenge for Business”, organised by Krungthep Turakij newspaper.
He cited global social and economic impacts of the Russia-Ukraine war, including soaring inflation amid food and fuel shortages. He also warned that the conflict shows no sign of ending anytime soon but is instead escalating, with Russia now threatening to use nuclear weapons if western countries continue to provide armaments to Ukraine.
The conflict has raised the spectre of a new Cold War, as the United States leads a coalition of democracies against Russia and China.
But Vijavat also pointed to different headwinds facing Thai business.
“The modern world that has been divided by geopolitics is also filled with other challenges, including Covid-19 crises in several countries, climate change, and digital disruption from demand for e-commerce during the pandemic and the rise of artificial intelligence,” said Vijavat.
Thai businesses need to adjust their strategies to cope with the new geopolitical trend and challenges to stay ahead of the game, he said. Those that stand still are at risk of being forced to change or even being driven out of business by new regulations brought in to govern changing trends, he warned.
Incoming regulations affecting Thai exporters include the European Union’s carbon border adjustment mechanism and deforestation edict.
As digital transformation accelerates, meanwhile, Thai businesses must adopt innovations to strengthen their businesses, including big data, analytic tools, AI technology, and new markets online.
Businesses should also take advantage of Thailand’s geographic position in the heart of Asia’s hotspot for economic growth, Vijavat said.
“Thailand is located in the centre of the ‘growth triangle’ marked by India, China and the Asean region. This area has a high potential for economic expansion despite the ongoing Russia-Ukraine conflict and the pandemic. We must exploit this location advantage by attracting foreign investment, especially from corporations migrating out of conflict zones.”
Vijavat advised giant corporations to pave the way by investing in infrastructure and creating new markets, which would attract small and medium enterprises to join and strengthen the supply chain.
“Using innovation and location advantage is key to boosting Thailand’s competitive edge in the modern world shaped by geopolitics,” he concluded.