Improving Thai Human Resource Skills for the Future of Work

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As the global value chain forces businesses and consumers around the world to scramble to keep pace with the fourth industrial revolution (4IR) by deploying deep technologies such as big data and analytics, AI and Industrial Internet of Things, Thailand is preparing its human resources to meet the rapidly changing needs of the business world with the new skills and global mindset that will help them take advantage of technological changes.

Thailand’s strategies to upskill its human resources have been driven by collaboration between the public and private sectors and academic institutes, with the transformation towards a targeted approach to meet business demand.

Leveraging the country’s strengths as a key investment destination in the region, the Thai government has adopted a multi-pronged strategy to ensure that the education system reduces the skills mismatch of local human resources. Key areas include improving the country’s primary education curriculum so that students have basic skills in science, technology, engineering and math (STEM), science, technology and innovation (STI) and data, as well as as the adaptation of curricula in universities and vocational schools to ensure graduates meet business demand in quantity and quality.

Along with promoting the deployment of 4IR technology to businesses, Thai government agencies, including the Thailand Board of Investment (BOI), have introduced incentive programs to promote private sector investment in training. of their human resources.

The Eastern Economic Corridor (EEC), Thailand’s pilot special economic zone for high-tech industries, located in the industrial zones of the eastern region, has cooperated with academic institutes and industries to implement resource development demand-driven, with incentives given to industries for their scholarship program in universities and vocational schools and spending on organizing short courses. The Thai government is considering relaxing the rules on long-stay visas to attract international talent and professionals to use Thailand as a job post.

Based on its survey of multinational companies in 15 industry sectors in 26 economies, the World Economic Forum concluded in “The Future of Jobs Report 2020” (1) that 4IR technologies, which have been widely deployed by companies as a productivity improvement strategy, are bringing sweeping changes to the labor market worldwide and at a faster pace than expected in light of the COVID-19 pandemic.

With the deployment of cloud computing and big data; with e-commerce progressing at a sustained pace; and with the accelerated adoption of encryption, non-humanoid robots and AI by companies, the global labor market will be transformed to such an extent that the time spent by humans and machines on current tasks will be equal d ‘by 2025. The report concluded by predicting that within that timeframe, data science, artificial intelligence, content creation and cloud computing will be the top emerging professions, while analytical thinking, creativity and flexibility will figure among the main skills needed.

Equipping the Thai workforce with Industry 4.0 skills

The Thai government has prioritized attracting tertiary students into STEM and STI in its human resource development plan, as these areas are seen as necessary to move the country forward in line with policies to develop 12 industries targeted as economic drivers.

A study (2) by the Organization for Economic Co-operation and Development (OECD) showed that the Thai labor force has seen a large increase in the cumulative number of young university graduates with degrees in the fields of engineering and manufacturing, ICT, health and natural sciences by 70%, 40%, 10% and 35% respectively between 2011 and 2018.

Official data from the Ministry of Higher Education, Science, Research and Innovation (MHESI) showed that Thailand produces about 350,000 graduates per year, graduates in the fields of biotechnology, mathematics, statistics, engineering, construction and ICT accounting for 20% of the total in 2018 increased slightly from 18% in 2012. Meanwhile, UNECE forecasts labor demand in 10 industries targeted (3) will amount to approximately 476,000 over the next five years, of which 54% are from vocational schools.

MHESI, the agency created in 2019 and tasked with revamping higher education in the country, uses the Cooperative and Work-Integrated Education (CWIE) program as a key framework in which the private sector will play an increasing role in upskilling and the requalification of local human resources. resources to cope with constant change, with incentives and collaboration from the public sector.

Under the CWIE, the BOI works with the EEC, MHESI, Ministry of Labor and Ministry of Education to ensure that the country supports investor demand for skills and advances Thailand’s economy focused on technology.

The MHESI will also adopt a new framework ensuring that students are equipped with the multi-skills and multi-career adaptability demanded by the global culture and holistic skills in communication, digital skills and learning.

The Thai government is also planning to launch more options that increase flexibility for vocational and university students to graduate if their skills and knowledge match demand and receive training or participate in vocational training courses, then transfer credits for these activities to the program. The MHESI, EEC and related agencies also create a database that links the demand and supply of human resources in each area.

The implementation of these policies has already led to an overall improvement in the Thai workforce in international rankings. In 2021, Thailand was ranked higher in the Global Competitiveness Rankings (4) of the Swiss-based Institute for Management Development at 28th out of 64 economies, up from 29th in 2020. improved in several factors, including those related to the labor market, such as workforce growth, continuing education opportunities for private sector employees, scientific infrastructure, increased scientific research publications, consumer confidence companies in collaboration between academia and the private sector and the protection of intellectual property rights.

Increase incentives for collaboration with the private sector

The development of the capacity to develop human resources plays a central role in the incentives for the promotional investment of the BOI. As part of its merit-based incentives, the BOI currently allows companies to add investments in training or internships to develop the skills, technology and innovation of their human resources in the calculation of eligibility. exemption from corporate income tax (CIT) with no minimum amount set. Eligible activities include training or internships to develop skills, technology and innovation for students studying in science and technology fields, such as work-integrated learning (WiL) projects, dual vocational education or cooperative education projects.

For more advanced skills, eligible projects must provide advanced technology training as approved by the BOI or targeted advanced technology training as approved by the MHESI or the Board of Directors of the Eastern Economic Corridor Steering Committee in cases where the entities are located in the CEE zone. Training can be either internal or organized by external parties. Companies are also allowed to submit two amounts of investment capital and professional training expenses when applying for additional CIT exemption, as approved by the BOI.

While these training grants will help address the current skills mismatch within the workforce, the BOI is also offering investment incentives of 5 years of corporate tax exemption and non-tax incentives to entities that establish education and training institutions to develop highly skilled professionals in STEM.

(1) https://www.weforum.org/reports/the-future-of-jobs-report-2020
(2) https://www.oecd.org/countries/thailand/thailand-s-education-system-and-skills-imbalances-assessment-and-policy-recommendations-b79addb6-en.htm
(3) https://www.eeco.or.th/en/business-opportunities
(4) https://worldcompetitiveness.imd.org/countryprofile/overview/TH

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