Thailand needs a greater investment in human capital development, more talent from abroad, and most likely educational reforms to improve labour skills and productivity in the long term, according to the business sector and World Bank.
The World Bank Thailand recommends Thailand needs human capital investment to improve labour skills and productivity in the long term.
HUMAN CAPITAL IS KEY
The World Bank Thailand recommends the country invest in human capital to upgrade labour skills and productivity in the long term after a decline in student performance in the 2022 Programme for International Student Assessment (PISA), administered by the Organisation for Economic Co-operation and Development.
To increase labour skills, Thailand needs structural reform, using fiscal policy to invest more in human capital and quality education. This development would improve literacy, especially in a transition to higher technology in the manufacturing sector, noted the bank.
Improved literacy would enable employees to better understand instruction manuals, said Kiatipong Ariyapruchya, the World Bank's senior economist for Thailand.
According to the World Bank report "Bridging the Gap: Inequality and Jobs in Thailand", several structural factors contribute to the persistence of inequality.
Inequality begins very early in life, with unequal opportunities in human development, and perpetuates over the life cycle and across generations.
Labour market disruption has also widened the level of inequality of opportunity in education, noted the report.
"Policies to revitalise the Thai economy and make it more inclusive focus on four key priorities: reskilling and upskilling of workers most affected by labour market disruptions; using education and training to build pathways to better jobs, while helping workers adapt to a rapidly changing labour market; enhancing women's participation in the labour market; and increasing farmers' income," according to the report.
The World Bank said policies to increase equality of opportunity in education should focus on enrolling poorer children in preschool, closing learning outcome gaps, supporting at-risk students to improve their academic performance and reduce dropout rates, and helping students' transition to tertiary education.
Consolidating and reorganising small schools into larger institutions with better resources can also help improve the equitable distribution of resources across schools.
Reducing spatial disparities in access to basic services and infrastructure can help mitigate inequalities related to local circumstances, the report noted.
The Digital Economy Promotion Agency (Depa) promotes the development of digital knowledge and skills for all segments of the population.
COMPETITIVENESS DEFICIT
Sumate Sudasna, president of the Thailand Incentive and Convention Association (Tica), said workers in the Thai tourism industry lack English communication skills, which is considered a basic requirement for many positions in this field. This is reflected in the low reading scores in the latest PISA evaluation, he said.
Mr Sumate said the low PISA score implies Thailand may face a shortage of skilled workers in the long term.
He said large companies tend to hire foreign workers who can speak two or three languages for some higher-level roles instead of local staff.
With the travel recovery, the Mice (meetings, incentives, conventions and exhibitions) industry is competing for talent with advanced language skills by offering competitive salaries, said Mr Sumate.
Even entry-level roles such as coordinator and project planner require strong foreign language skills to be able to initiate a programme and coordinate directly with clients, he said.
"Being fluent in English is a starting point to access wider knowledge and develop additional important skills, including digital skills," said Mr Sumate.
Mandarin and Russian language skills are also in high demand as they can help in accommodating visitors, he said.
Mr Sumate said to increase Thailand's competitiveness, the government should invest in restructuring the whole education system, as well as subsidising short courses for workers to update their knowledge on a regular basis.
Students check out job opportunities at a fair. Apichart Jinakul
INCENTIVES NEEDED
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said Thailand needs to elevate its digital innovation and leverage technology to enhance workforce efficiency.
"We propose the government upgrade the talent immigration policy to attract talented individuals from abroad to work and reside in Thailand. This, in turn, would contribute to job creation, technology transfer and the development of new skills," Mr Sanan said.
"The government should implement appropriate incentives, such as facilitating visa and work permit processes, tax-related measures and suitable residency arrangements."
He said the chamber has already taken steps in this direction by driving educational initiatives that meet global demands through the Harbour Space@UTCC programme.
The programme is the first curriculum in Asia that brings leading industry professionals to groom students with experiences from the real economy, laying the groundwork for entrepreneurs in the innovation era, said Mr Sanan.
He said the chamber has advocated for policies to develop the country's workforce, including adjusting daily minimum wage rates through a tripartite mechanism, addressing the labour shortage, tackling issues related to foreign labour, improving workforce productivity, and enhancing the skills of the workforce.
The chamber supports measures to cope with Thailand's shift to an aged society and promotes improving a high-quality Thai population by providing appropriate state welfare to ensure readiness to become quality global citizens, said Mr Sanan.
VOCATIONAL EDUCATION
Thailand needs greater efforts to reform education and increase the number of vocational school graduates if it wants to solve the ongoing shortage of skilled workers needed to drive the development of targeted S-curve industries, said the Federation of Thai Industries (FTI).
The country needs capable workers to serve S-curve industries driven by innovative technologies, as well as employees in labour-intensive jobs that require basic know-how in industries such as food, said the federation.
The former group of workers are crucial to the development of the Eastern Economic Corridor (EEC), which covers parts of Chon Buri, Rayong and Chachoengsao.
The government aims to make the EEC a high-tech industrial hub housing 12 targeted S-curve industries: next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; defence; and education development.
"We need to restructure national education to better support vocational schools, which provide students with more courses that meet demand in S-curve industries than those taught at high schools," said Kriengkrai Thiennukul, chairman of the FTI.
"Germany can serve as a role model for key industries because it encourages students to study vocational programmes."
Thai children must be adept at learning the sciences and mathematics in order to grow into highly skilled workers using digital technology, he said.
Many students are not equipped with knowledge that matches demand in the labour market. They also do not go to schools and universities to do what Mr Kriengkrai called "learn to earn".
"It seems many kids prefer to be singers rather than learn difficult subjects to earn money though skilled labour, which often leads to high earnings," he said.
Some companies forge collaboration with educational institutions to jointly develop and upskill workers, but this does not solve the problem at its root, said Mr Kriengkrai.
He said the government needs to have a serious discussion about educational reform, which has been hinted at for decades, but rarely translated into action.
The development of workers' skills through appropriate education is needed if Thailand wants to better compete with Vietnam, which has rapidly developed its industries, said Mr Kriengkrai.
Vietnam has a big advantage over Thailand in terms of a large working-age population, cheaper wages and more free trade agreements, allowing Vietnam to sell more products in a wider variety of markets, he said.
Thailand became an aged society last year, in part because of low birth rates, so the country should focus on technology-driven or S-curve industries, said Mr Kriengkrai.
Students at a school in Bang Khen district use Chromebooks. Varuth Hirunyatheb
DIGITAL SKILL SHORTAGE
The government is addressing the shortage of workers with digital skills through initiatives and partnerships with foreign technology giants.
The Digital Economy and Society (DES) Ministry launched the "Coding for Better Life" project to create a sustainable digital environment capable of supporting continuous coding skill development.
The project develops infrastructure for 1,500 schools nationwide to produce an average of 100,000 youth with digital skills annually.
DES Minister Prasert Jantararuangtong said Thailand requires around 100,000 digital employees annually, yet the education sector is only capable of producing around 25,000 such individuals each year.
The ministry outlined comprehensive short-term and long-term strategies to address the issue.
The short-term strategy involves offering a global digital talent visa and introducing a unique stamping category for temporary residents who have exceptional digital abilities. These proposals are being considered by the cabinet.
Under the long-term plan, the Digital Economy Promotion Agency will promote the development of digital knowledge and skills for all segments of the population.
Last week the DES Ministry signed a memorandum of understanding (MoU) with Huawei covering four areas, including training employees in the field of artificial intelligence (AI).
The pact aims to develop AI skills in the workforce, possibly creating 50,000 skilled workers within five years.
According to a Thailand national digital talent development white paper commissioned by Huawei, the country plans to train its people on digital skills, aiming to raise Thailand's Human Development Index from 0.722 to 0.8 within 10 years.
Following the pandemic, Thailand recorded rapid demand for fundamental digital skills, noted the paper.
However, in the next five years, digital talent demand will shift towards intermediate and advanced digital skills, according to the Huawei paper.
A significant digital talent supply and demand gap is yet to be bridged, with demand outstripping supply, noted the paper.
By 2027, the digital talent gap in Thailand will reach 600,000 people, with 500,000 of that figure advanced digital skills, according to the Huawei paper.
In November, the Thai government and Google announced a strategic collaboration to boost Thailand's digital competitiveness.
In partnership with the DES Ministry and the Thai Board of Investment, Google is offering 12,000 additional Google Career Certificate scholarships under its Samart Skills programme.
First launched in October 2022, this brings Google's total commitment to 34,000 scholarships.
According to Google, the free initiative will help more Thais to develop skills and earn professional certifications for entry-level jobs in high-demand fields.
In November, the government and Microsoft signed a MoU for a collaboration to pursue a digital-first, AI-powered Thailand.
As part of the partnership, Microsoft will continue its mission to develop future-ready skills for 10 million Thais by working alongside the DES Ministry and other stakeholders to equip Thais with crucial skills.
