Technology startups in ASEAN member state Thailand have grown rapidly in recent years, thanks to a combination of local entrepreneurship and a supporting ecosystem of policies, the Asian Development Bank (ADB) said in a new report in September.
The startup sector in Thailand began to emerge in the 2000s with clusters of small software firms, and by the mid-2010s, the government began to realise the importance of startups and the contribution they can make to the economy. Policy makers also began to recognise that startups need a different type of support than traditional small and medium-sized enterprises (SMEs), the ADB said in the report.
The government has created a supportive policy environment, but some policies could be reviewed, according to the ADB. The five-year income tax exemption is good, but since many startups are not yet profitable during this period, it does not provide much support, the report noted.
The ADB study focuses on four sectors: cleantech (environment), edtech (education), agritech (agriculture), and healthtech (health). These sectors are not the dominant tech sectors in Thailand—fintech and e-commerce are. However, they not only contribute to economic activity, but also support important development goals. Edtech and healthtech build human capital, and agritech provides innovation for farming, the occupation of most low-income households. Cleantech, also known as greentech, improves environmental sustainability and mitigates climate change.
“The use of digital solutions was gaining pace prior to the pandemic, but the ‘pandemic effect’ boosted demand in key areas—and that effect is continuing,” said ADB Economist Paul Vandenberg, one of the report’s co-authors.
“In some areas of health and education, the government is a key customer and its openness to adopting solutions offered by startups is critically important,” Vandenberg noted.